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Hospital upcharges for prescription drugs provides further justification for federal government drug price negotiation

Written by Diane Archer

A new report by Pharma, the trade association for drug manufacturers, looks at hospital upcharges for prescription drugs and provides further justification for federal government drug price regulation. The report suggests that hospitals are making a bundle off of prescription drugs.

According to Pharma, which analyzed the prices hospitals charge for all hospital-administered drugs, on average, hospitals charge almost five times (479 percent) the price they pay for these drugs.  Just over half of hospitals (53 percent) charge between two and five times the cost of these drugs. One in six hospitals, 17 percent, are charging at least seven times their cost.  And one in twelve hospitals (8 percent) are charging more than ten times the price they pay for them.

Uninsured patients may get hit with these exorbitant drug charges in full. Insurers generally pay a negotiated rate for the drugs their enrollees receive in hospital. That negotiated rate is typically more than twice the price that hospitals pay for the drugs, and less than what hospitals charge the uninsured. It’s no wonder the public wants Congress to address health care costs.

These excessive hospital charges mean ever higher health insurance premiums for Americans.  They also drive people into medical bankruptcy or force them to forego necessary medicines.

Congress should not permit hospitals to hike up the price of drugs beyond a small administrative fee.  And, health insurers, along with Pharma and the general public, should be calling on Congress to pass legislation that forbids this behavior.

Unfortunately, our commercial health care system permits pharmaceutical companies, Pharmacy Benefit Managers (PBMs) and the insurance industry, in addition to hospitals, to make out like bandits when it comes to what they charge for drugs. Pharmaceutical companies like to shift blame to hospitals and PBMs for their markups. And, insurers and PBMs tend to keep quiet about the high price of prescription drugs, enjoying the riches they reap from the failure of Congress to negotiate one fair price for everyone.

It’s time Congress stepped in to negotiate fair drug prices for everyone in this country. If Germany and Japan can do it, so can the US.

If you want Congress to rein in drug prices, please sign this petition.

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1 Comment

  • Not only are hospitals upcharging medications, they will not allow patients to bring their personal medications to take while hospitalized. The last time I was hospitalized the hospital didn’t even have some of the medications I was prescribed by my doctor. And those that they had were outrageously priced, such as my insulins.
    Hospitals are not the only organizations which upcharge medications. I spent three days in a care facility to recuperate from major surgery. The charge for the medications they dispensed? Over $4,000!!!!!
    I called my insurance company and they denied all but a few dollars in payment for medications to the care facility. My insurance company said that if the care facility tried to collect the difference from me I was to call the insurance company for them to act as my advocate. I was NOT to pay the care facility for anything.
    I could go on about the lack of care I received while in the care facility, but that’s another story.

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