August 14, 2023

Hospitals mark up medicine prices 500%

Despite a myopic focus on drug spending, roughly 30% of every dollar spent on health care in the United States can be attributed to hospitals. Almost 4 times more is spent on hospitals than on retail prescription medicines annually, and this trend is predicted to continue for the foreseeable future. A new report shows how hospitals are driving up costs.

Finding one: Hospitals are charging 500% of what they paid for medicines, on average. For the 20 medicines that were analyzed, hospitals charged a range of more than 200% to more than 700% what they paid, confirming a trend identified in 2018. 

Finding two: Commercial payers reimbursed hospitals almost 200% what the hospital paid to acquire the medicine. Because patient cost sharing is often based on these markups, this practice is driving up costs for patients.

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