Study Claims Hospitals Charge Double for Specialty Drugs Compared to Pharmacies

Article Summary: A new study conducted by AHIP shows hospitals and doctors’
offices charge patients more for specialty drugs compared to specialty pharmacies.

By Robert King, Fierce Healthcare, Feb 17, 2022.

Hospitals on average charge double the price for the same drugs compared to those
offered by specialty pharmacies, according to a new insurer-funded study released as
federal regulators ponder a probe into the pharmacy benefit management industry.

The study (PDF), released Wednesday by insurance lobbying group AHIP, comes as
specialty pharmacies have grown in use among PBMs and payers to dispense
specialty products. The study was released a day before a scheduled meeting
Thursday of the Federal Trade Commission on whether to probe the competitive
impact of PBM contracts and how they could disadvantage independent and
specialty pharmacies.

“The data are clear, specialty pharmacies lower patient costs by preventing hospitals
and physicians from charging patients, families, and employers excessively high
prices to buy and store specialty medicines themselves,” said Matt Eyles, president
and CEO of AHIP, in a statement.

Researchers looked at medical and pharmacy claims data from 2018 through 2020
and calculated the drugs commonly delivered via specialty pharmacies. It then
calculated the three-year average cost for a single treatment of a drug delivered via a
specialty pharmacy, physician office and hospital.

It found that hospitals on average charged 108% the price for the same drugs
compared to a pharmacy, and a doctor’s office charged 22% more. AHIP said that
specialty pharmacies can offer more efficient delivery to cut down on costs.

“These solutions help reduce Americans’ out-of-pocket costs and what they pay in
premiums—making healthcare more affordable and accessible for everyone,” the
study said.

It added that there were higher markups for certain drugs in hospitals and doctor
offices. For example, cancer treatment Herceptin had a 131% price markup
compared to pharmacies and 40% markup from doctors' offices.

Hospitals have additional charges for administering specialty drugs such as storage
and handling.

Insurers have increasingly pivoted to specialty pharmacies as the prices for specialty
drugs to treat conditions such as cancer, arthritis and multiple sclerosis are

CVS, for instance, announced in May 2021 that spending on specialty drugs
accounted for 52% of its total pharmacy spending.

The shift has also caused providers to respond. A new group of seven health systems
created its own trade association to promote best practices on integrated pharmacies
in hospitals.

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