Investigating allegations that several drug distributors are buying scarce drugs and reselling them at massive profit to hospitals, a member of the House Oversight and Government Reform Committee has started an investigation. The congressman has requested documentation of what the distributors paid for the drugs and the amounts at which they’re reselling them.

The Wall Street Journal reports the drugs in question are for cancer and other critical-care conditions. Some of the drugs are in such short supply that hospitals have had to ration them, and some hospitals have resorted to replenishing their stock through “gray market” resellers.

The congressman said he found a Miami company offering a $12 leukemia drug for $990 a vial, and a Maryland outfit offering a cancer drug for $270 a vial — 50 times its market rate.

The secondary-market drug distributors aren’t necessarily causing the shortages, says the president of the American Hospital Association, but they are making matters worse by buying up supplies before healthcare providers can get them.

Congressman Investigates High Drug Markups [The Wall Street Journal]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.