Report: Hospitals Mark Up Medication Prices by 500%

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Analysis requested by PhRMA indicates that these facilities charge anywhere from two to seven times what they originally paid.

Image Credit: PhRMA

Image Credit: PhRMA

Hospitals are charging 500% of what they paid for medicines, on average, according to a new analysis from The Moran Company. For the 20 medicines that were analyzed, hospitals charged a range of more than two to more than seven times what they paid, which confirms a trend originally identified in 2018.

The analysis also looked at the amount hospitals receive after negotiations with commercial payers and found that, on average, hospitals are reimbursed almost 200% what they paid to acquire the medicine. Because patient cost sharing is often based on these markups, this practice is resulting in increased costs for patients.

About 30% of every dollar spent on health care in the US can be attributed to hospitals. Almost four times more is spent on hospitals than on retail prescription medicines annually, and this trend is predicted to continue for the foreseeable future.

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