Nov 9, 2021 - Health

Private insurers pay steep markups for hospital drugs

A man in the foreground sits in a chair receiving an IV infusion, and a woman in the background looks at the man's IV pole.
A man receives a Keytruda infusion. Photo: John Moore/Getty Images

Hospitals are charging private health insurers "considerable markups" on highly used outpatient drugs like Remicade, Neulasta and Keytruda, according to a new study in JAMA Internal Medicine.

Why it matters: Depending on the drug, insurers are paying hospitals several times what Medicare pays, and that ultimately flows through to workers' insurance premiums.

By the numbers: The largest variation came from Remicade, an IV drug that treats a range of autoimmune conditions, according to the study's sample of 20 major hospitals.

  • The median rate paid by commercial insurers at Mayo Clinic's hospital in Phoenix was more than 800% of what Medicare would've paid.

Go deeper: Hospitals are making a lot of money on outpatient drugs

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