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Schumer says new law could stop Rx gouging

Thu, Dec 8th 2011 12:00 am

By LINDA A. JOHNSON
AP Business Writer

TRENTON, N.J. — Price gouging on prescription drugs already in short supply would become a federal crime under legislation about to be introduced.

Sen. Charles Schumer, D-N.Y., said he's proposing a bill that that would give the U.S. Department of Justice authority to crack down on "unscrupulous drug distributors" that sell hospitals life-saving prescription medicines in short supply at huge markups.

The problem has been growing this year, as shortages have dramatically worsened for normally cheap generic injected medicines that are the lifeblood of hospitals: drugs for cancer, pain, infections, even liquid nutrition and anesthesia for surgery.

The shortages are disrupting care of patients and even clinical trials of experimental drugs that must be tested against older, standard treatments.

In September, the Associated Press reported that at least patient 15 deaths since mid-2010 have been blamed on the shortages. In one case in Alabama, nine hospital patients died after getting inadvertently contaminated liquid nutrition that had to be hand-mixed from a powder because the usual liquid version wasn't available.

Schumer's bill is to be introduced next week, an aide told the AP. It would allow penalties of up to $500 million for each case of price gouging.

A Schumer spokesman said Monday that the senator is working on lining up co-sponsors to the bill. Earlier in October, he requested an investigation by the Federal Trade Commission into possible price gouging by some distributors.

In a typical year, there are always some prescription drugs shortages. But the number of new shortages reported each year has tripled since 2006. As of Nov. 30, there had been 251 different new drug shortages this year.