The new 2016 Medical Pharmacy Trend Report (free download), from Magellan Rx Management, was released yesterday. As always, the report includes a boatload of useful data on medical benefit spending and claims. Click here to read the press release.
Unfortunately, the latest edition also shows how hospitals continue to earn outrageous profits on specialty drugs. Commercial payers still use reimbursement approaches that permit hospitals to inflate specialty drug costs by thousands of dollars per claim.
These hospital mark-ups translate directly into higher drug spending—regardless of how manufacturers set list prices. Using some fairly conservative assumptions about Remicade, I show below how hospitals are earning thousands of dollars more than the drug’s manufacturer does.
Meanwhile, health plans are struggling to shift patients from hospital outpatient settings to physician offices—where costs are lower, at least until those sites are acquired by hospitals.
I suppose that the charts below should be troubling to hospital-based physicians, who can barely control their righteous indignation over drug prices. Alas, it’s always easier to blame pharma companies than to admit that their own hospital employers are driving up healthcare costs.
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