Sep 5, 2018

Report: Hospitals mark up drugs by 500%

Photo: BSIP/UIG Via Getty Images

PhRMA, the drug industry’s main lobbying group, is out with a new report today that says hospitals mark up prescription drugs by an average of almost 500%. One in six hospitals set prices that are at least seven times more than what the hospital paid.

The details: Consultants at the Moran Company analyzed 2016 federal cost reports for roughly 3,800 hospitals, comparing hospitals’ purchase price for certain drugs to the maximum amounts they would charge for those drugs.

Yes, but: The report is focusing on the sticker prices hospitals charge. The prices insurers actually pay are lower — a point pharma is quick to emphasize in debates about its own sticker prices.

  • “We intend to continue to broaden the debate to demonstrate that these markups extend beyond charges into the amount commercial insurers pay for medicines in the hospital outpatient setting,” a PhRMA spokesperson said.

The other side: “This is typical finger-pointing by drug companies to try to divert attention away from their own skyrocketing prices,” the American Hospital Association said in a statement.

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