ICHP Position Statement - Pharmaceutical Gray Market

ICHP discourages the use of the gray market to purchase medications.  Consistent with the Health Industry Group Purchasing Association’s suggestions, ICHP recommends that the following processes be followed when a product must be obtained from a source that is not the manufacturer or the product’s authorized distributor of record:

  • Prior to utilizing an alternative source for medication, the pharmacy will establish the integrity of the source and require that the alternative source provide the following as a minimum:
    • Provide a pedigree back to the previous source, and authenticate and track each transaction back to the manufacturer’s authorized distributors of record.
    • Certify that it is not a diverted product.
    • Certify that actions by the alternative source will not alter any original manufacturer warranties or guarantees.
    • Certify that the product has been stored and handled consistent with product labeling requirements.”1
  • Obtain documentation that the wholesaler is a “Verified Accredited Wholesaler Distributor” by the National Association of Boards of Pharmacy.


  1. The Joint Commission on Accreditation of Healthcare Organization standards require that the healthcare system establish procedures to manage drug shortages.  If an organization’s process includes obtaining medications from secondary wholesalers, specific criteria must be established on when such sources will be used.
  2. “The American Society of Health System Pharmacists recommends that health systems verify that a wholesaler is registered to distribute products in their state prior to purchasing drug products from non-contracted wholesalers.”2   Registration is also required by Illinois law.  Never purchase prescription drugs from any source other than a registered prescription drug wholesaler or a pharmacy that is exempt from registration.
  3. Many secondary wholesalers are registered and regulated under state law even though they purchase medications from sources other than the manufacturer.  The concern is that some of these medications may be stolen, adulterated, counterfeited, or damaged during inappropriate storage and handling.  Diligence beyond verifying registration is required whenever you are unfamiliar with the wholesaler.
  4. In the United States, there is no national pedigree law that limits distribution of pharmaceutical products to authorized distributors of record.  Secondary wholesalers should, however, be able to provide information concerning the source of their products.
  5. Illinois law permits pharmacies to engage in limited sales of prescription drugs to practitioners for office use or to other pharmacies.  Purchases from licensed pharmacies should be subjected to the same diligence that is undertaken when a drug is purchased from a secondary wholesaler.


  1. Health Industry Group Purchasing Association. Integrity of the pharmaceutical supply chain:  product sourcing for patient safety.  Am J Health-Syst Pharm 2004;61:1889-1894.
  2. ASHP guidance for purchasing drug products in short supply (revised 7/2012). http://ashp.org, last accessed 12/28/2012.
  3. Anon.  Provisional observations on drug product shortages:  effects, causes, and potential solutions.  Am J. Health-Syst Pharm 2002:59:2173-2182.
  4. ASHP guidelines on managing drug product shortages in hospitals and health systems. http://ashp.org, last accessed 12/28/2012.

Approved 09/2013

Revised 01/2018