Obama Issues Executive Orders To Shut Down Prescription Drug Price Gougers

health care

President Obama issued an Executive Order yesterday, urging the Federal Drug Administration and Department of Justice to take action to reduce and prevent critical prescription drug shortages, help consumers, and end price gouging.

The President’s Executive Order directs the Department of Justice to work with the FDA to scrutinize secondary drug wholesalers who illegally hoard medications, particularly in a shortage, and hike up prices to gouge consumers.

“At the extreme, a drug used to treat high blood pressure that was normally priced at $25.90 was being sold at $1,200 due to a shortage,” the White House reported. “grey market” vendors are said to raise prices on average by 650 per cent, according to a Premier health care alliance report.

Prescription drug shortages are certainly at the heart of the matter, with the number of shortages tripling between 2005 and 2010, from 61 to 178. Obama will ask the FDA to “broaden its reporting” of potential shortages of critical drugs, while stepping up its analysis of new manufacturing sites, suppliers, and processes to nip shortages in the bud.

New legislation sponsored by Senator Amy Klobuchar (S. 296) and Congresswoman Diana DeGette (D-CO) (H.R. 2245) has been backed by Obama and would require that all shortages be legally disclosed. For now, the FDA encourages manufacturers to disclose “potential shortgages” voluntarily, says the White House.

For more on the President’s Executive Order and what the Obama Administration is requesting, visit the White House’s website.

See 7 ways the recession has made Americans healthier >

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.