Exposing the Hidden Costs: Hospitals Charging 500% More for Medicines

By Staff Writer

August 8, 2023

A recent analysis by The Moran Company has shed light on an alarming trend in the healthcare industry. On average, hospitals are charging a staggering 500% of what they paid for medicines. This practice is not only driving up costs for patients, but it’s also padding the profits of hospitals, insurers, and PBMs at the patient’s expense.

The study analysed 20 medicines and found that hospitals charged between two to seven times more than what they paid for them. This trend was initially identified in 2018 and has continued ever since. Even after negotiations with commercial payers, hospitals are still reimbursed almost 200% of what they paid to acquire the medicine.

Stephen J. Ubl, president and CEO of PhRMA, stated, “Hospital markups are driving up patients’ out-of-pocket costs, which particularly hurts patients living paycheck-to-paycheck and those in need of extensive medical care.”

Interestingly, despite a strong focus on drug spending, nearly 30% of every healthcare dollar in the United States is attributed to hospitals. Almost four times more is spent on hospitals than on retail prescription medicines annually, a trend predicted to continue indefinitely.

The study also pointed out that nearly 60% of all U.S. hospitals participate in the 340B drug pricing program, where medicines are purchased at substantial discounts. However, it’s estimated that these hospitals are reimbursed almost three times the discounted 340B price of a medicine.

As discussions continue on healthcare costs and affordability, policymakers must consider the increasing role hospitals play in driving costs for patients and the broader healthcare system.

Reference url

Recent Posts

Novo Nordisk performance
      

Business Dynamics: How Novo Nordisk Lost GLP-1 Market Share

🚀 Understand the market dynamics of Novo Nordisk’s GLP-1 Market Share Decline.

A case of demand underestimation, supply chain strain, and competitor agility. Using systems thinking, we unpack the dynamic forces behind Eli Lilly’s surge—and what strategic levers pharma leaders must pull to stay ahead.

#SyenzaNews #PharmaStrategy #MarketDynamics #NovoNordisk #EliLilly #GLP1

Tolebrutinib MS analysis
          

Tolebrutinib MS Analysis: Evaluating Economic Impact in SPMS

💡 Can tolebrutinib reshape the treatment landscape for progressive multiple sclerosis?

A recent report from the Institute for Clinical and Economic Review reveals promising insights on tolebrutinib, demonstrating a 31% reduction in disability progression for patients with non-relapsing secondary progressive MS. Yet, mixed outcomes and potential safety concerns raise critical questions about its long-term efficacy and market access.

Explore the nuances of this groundbreaking therapy and its implications for healthcare economics.

#SyenzaNews #HealthEconomics #MarketAccess

allopurinol Marfan syndrome orphan
       

Allopurinol Designated an Orphan Drug for Marfan Syndrome

🌟 What does the EMA’s orphan drug designation for allopurinol mean for those impacted by Marfan syndrome?

This groundbreaking move highlights a significant step forward in tackling rare diseases, offering hope to patients with limited treatment options. Allopurinol, traditionally used for gout, shows promise in addressing life-threatening aortic complications associated with Marfan syndrome, thanks to its antioxidant properties.

Dive into the implications of this development for healthcare innovation, patient access, and the future of rare disease treatment!

#SyenzaNews #HealthEconomics #Innovation #MarketAccess

When you partner with Syenza, it’s like a Nuclear Fusion.

Our expertise are combined with yours, and we contribute clinical expertise and advanced degrees in health policy, health economics, systems analysis, public finance, business, and project management. You’ll also feel our high-impact global and local perspectives with cultural intelligence.

SPEAK WITH US

CORRESPONDENCE ADDRESS

1950 W. Corporate Way, Suite 95478
Anaheim, CA 92801, USA

© 2025 Syenza™. All rights reserved.