Hospitals significantly marking up cost of cancer treatments
Hospitals often fail to disclose cancer therapy costs while substantially marking up prices for private insurance.
The cost of cancer care is a major concern for patients, payers and policymakers – and it continues to grow.
U.S. spending on all cancer therapies increased from $39.1 billion in 2015 to $67.5 billion in 2019. Some novel anticancer therapies are priced at more than $100,000 per year. As a result, some patients incur debt, reduce spending on other necessities or forgo recommended treatments altogether.
Related: Cancer costs are still rising—and so are million-dollar-plus medical claims
The federal Hospital Price Transparency final rule, which became effective in 2021, requires hospitals to publicly disclose payer-specific prices for drugs. However, little is known about hospital markup prices for parenteral therapies (administered somewhere other than the mouth and alimentary canal). Although exact numbers have been difficult to obtain, it is estimated that hospitals mark up the prices of drugs for patients with private insurance by an average of 140% to 280%.
In a study reported in JAMA Internal Medicine, researchers working with National Cancer Institute data sought answers to three questions:
- Are leading cancer centers disclosing negotiated prices for cancer therapies as required by federal regulation?
- How much do these centers mark up cancer drug prices above acquisition costs?
- What is the variation of negotiated prices for cancer therapy across centers and between payers?
The study examined private payer-specific prices for 25 commonly used parenteral cancer therapies at 61 NCI–designated cancer centers.
“The primary outcome was hospital price markup for each cancer therapy in excess of estimated acquisition costs,” according to the research report. “Secondary outcomes were the extent of across-center price ratios (the ratio between the 90th percentile and 10th percentile median prices across treatment centers) and within-center price ratios (the ratio between the 90th percentile and 10th percentile prices among payers at each center).”
Of 61 NCI-designated cancer centers:
Twenty-seven disclosed private payer-specific prices for at least one top-selling cancer therapy as required by federal regulations.
Median drug price markups across all centers and payers ranged between 118% and 633%. Across-center price ratios ranged between 2.2 and 15.8.
Negotiated prices also varied considerably between payers at the same center; median within-center price ratios for cancer therapies ranged from 1.8 to 2.5
“This cross-sectional study found that fewer than half of NCI-designated cancer centers publicly disclose payer-specific prices for at least one top-selling cancer therapy drug, and many substantially mark up the prices of parenteral cancer therapies administered to patients with private insurance,” the study concluded. “Negotiated prices varied widely across cancer centers and within centers between payers. These findings suggest that, to reduce the financial burden of cancer treatment for patients, public policies may be instituted to discourage or prevent excessive hospital price markups on parenteral chemotherapeutics.”
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