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A 'Valuable Service' or an Exorbitant Mark-Up?

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US Congressman Elijah Cummings, a Maryland Democrat and ranking member of the US House Oversight and Government Reform Committee, has launched an investigation into the pricing policies of companies that buy cancer drugs on a secondary market and then resell them to hospitals, reports Bloomberg's Drew Armstrong and Tom Randall. Cummings says the companies are adding a "steep mark-up" to the price of the drug, while the companies claim they provide a "valuable service" to hospitals, Armstrong and Randall write. According to a survey by the Premier Healthcare Alliance, the prices these companies sell the drugs for are, on average, seven times more expensive than typical prices. Cummings, who said the companies engage in "price gouging" in a statement emailed to Bloomberg, added that found one reseller who charged a hospital 80 times the typical price for the pediatric cancer drug cytarabine. He plans to investigate where the companies are getting their supplies, and how much their profits are, Armstrong and Randall say. The resellers say the mark-ups reflect their costs and the shortage of cancer drugs currently plaguing the US. Three of the five major resellers who received a letter from Cummings say they plan to cooperate, Bloomberg adds.

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