Most of us may have asked ourselves this question: Why does getting sick has to be so expensive? Getting sick is too annoying, not only because of the symptoms and ailments the disease may cause you, but also for the exuberant amount of money we have to spend whenever it attacks us.
The reason is simple, hospitals mark up medicine prices, on average, nearly 500 percent, according to a new analysis from the Moran Company that was commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA). The analysis of 20 medicines also found the amount hospitals receive after negotiations with commercial payers is, on average, more than 250 percent what they paid to acquire the medicine. This means a hospital is paid two and a half times what the biopharmaceutical company, who brought the medicine to market, receives. This hidden threat to affordability is a driver of higher cost sharing and premiums for patients across the country.
Insurers pay for medicines administered in hospital outpatient settings differently than when they are purchased at a pharmacy. For example, many cancer treatments are provided in a hospital facility where the hospital purchases the medicine directly and is then reimbursed by the patient’s insurer – often with a steep markup. How much a hospital can charge for a medicine and what they get paid varies widely based on local hospital and insurer market dynamics. When hospitals gain market power through consolidation, they are able to demand higher reimbursement from commercial payers.
The Moran analysis evaluated 20 different physician-administered medicines across a range of therapeutic areas, such as cancer, autoimmune disorders and arthritis, and found that hospitals are significantly marking up the prices of these medicines. Even after negotiations with commercial payers, hospitals are often paid tens of thousands of dollars more than the amount the hospital paid to buy the medicine.
While hospital markups lead to higher costs for patients, employers and payers, these markups are making almost impossible for some people to treat their diseases, there are so many people that cannot afford to be sick because it is practically a condemnation to death.
Fortunately, there are other good options for this people who can’t pay big amounts of money for medicines, such as clinical trials, that seek overall for the wellness of the patient, giving them hope and specialized care. Don’t be scared when you listen the words: “experimental”, “trial”, “research”, etc. At Althian, many people have beneficiated with these trials, especially in the area of cancer.
For more information about our clinical trials, don’t hesitate to contact us and we will be pleased to help you.