Better Solutions for Healthcare

Healthcare Finance: About 1 in 5 hospitals mark up drug prices at least 700 percent, study finds

By Jeff Lagasse

September 5, 2018

The analysis, done for PhRMA, found that 320 hospitals marked up some medicine prices more than 1,000 percent.

Nearly one in five hospitals mark up medicine prices 700 percent or more, according to a new analysis from The Moran Company, prepared for The Pharmaceutical Research and Manufacturers of America.

This means that if a hospital purchased a medicine for $150, a 700 percent markup could result in patients being billed $1,050, according to the study. And the analysis also found that 320 hospitals – eight percent of those included in the study – marked up some medicine prices more than 1,000 percent.

The analysis used Centers for Medicare and Medicaid Services data that included total costs and charges for all medicines from 3,792 hospitals. On average, those hospitals marked up the price of medicines nearly 500 percent, consistent with an analysis of 20 medicines previously conducted by Moran.

“Hospitals receive billions of dollars every year in negotiated and mandatory discounts from biopharmaceutical companies while simultaneously increasing the price of these medicines to insurers and patients,” said Stephen J. Ubl, president and chief executive officer of PhRMA. “In order to make medicines more affordable for patients, we must address the role hospital markups play in driving up medicine costs.”