CERGAS Seminar "Hospital Price Markups for Infused Cancer Drugs in the United States"

Context: Drug pricing policy seeks a balance between the virtues of high prices, needed by drug producers investing in R&D, and low prices, needed by payers and patients to assure affordability and access. However, supply chain intermediaries such as hospitals siphon off a share, sometimes a very high share, thereby increasing payer payments while reducing manufacturer revenues. This study examined the extent to which hospitals increased expenditures by private payers on infused cancer drugs by raising reimbursement prices above the acquisition prices they pay to drug manufacturers.

Data. The study is based on 2019 data on 1,633,905 infusion visits by 153,155 patients using any of 38 cancer drugs. Patients were aged 18-64 and enrolled in private BlueCross BlueShield insurance plans across all 50 states in the USA.

Results: The median hospitals price markup over reimbursement cost ranged from a minimum of 59% to a maximum of 95% across the 12 biologics studied, with a median of 72%. Markups are even higher for chemotherapies, ranging from 69% to 500% with a median of 249%. Median markups were 90% and 88% for hormonal drugs and ancillary cancer drugs, respectively. Non-hospital, physician-owned infusion clinics charged comparatively lower price markups over average acquisition costs.

Discussion. The presentation discusses the implications of price markups for payers, patients, and drug manufacturers in the US. It then considers potential implications for reimbursement strategies in Europe for drugs distributed through hospital pharmacies, where hospitals tender acquisition prices from manufacturers at levels substantially lower than the reimbursement prices they obtain from national insurance payers.

Speaker: James Robinson, University of California, Berkeley

James Robinson è Leonard D. Schaeffer Professore di Economia Sanitaria presso l’Università della California a Berkeley. Fa parte di molti consigli e commissioni professionali ed è invitato a fare interventi da società farmaceutiche e tecnologiche, assicurazioni sanitarie, ospedali, associazioni di medici, università ed enti pubblici.

A Berkeley, la ricerca del Professor Robinson si focalizza sui settori della biotecnologia, dei dispositivi medici, delle assicurazioni e del sistema sanitario. Svolge studi comparativi tra i sistemi europei e statunitensi. Ha pubblicato tre libri e 150 articoli in riviste specializzate. Tiene corsi universitari di politica sanitaria, di economia del sistema sanitario e di innovazione farmaceutica.

Robinson JC. Funding of Pharmaceutical Innovation after the COVID-19 Pandemic. JAMA 2021; 325(9):825-826.

Robinson JC. Lower Prices and Greater Patient Access – Lessons from Germany’s Drug-Purchasing Structure. New England Journal of Medicine 2020; 382:2179-2181.

Robinson JC, Whaley C, Brown TT. Association of Reference Pricing with Drug Selection and Spending. New England Journal of Medicine 2017; 377:658-675.Robinson JC, Megerlin F. Value-based Payment for Oncology Services in the United States and France. Journal of Cancer Policy 2016; http://dx.doi.org/10.1016/j.jcpo.2016.09.001.

Robinson JC. Purchasing Medical Innovation: The Right Technology, for the Right Patient, at the Right Price. Oakland, CA: University of California Press, 2015.

Link Zoom: https://unibocconi-it.zoom.us/j/94183104221?pwd=alM3K1RKeU9EbzBwY1k4N29kS290Zz09

Meeting ID: 941 8310 4221

Passcode: 805483

For those willing to participate in person, please write to cergas@unibocconi.it before Wednesday, May 11th.