Markup Malaise: Research Highlights Site-of-Care Cost Differences for Biologics

July 27

The large markups that hospital outpatient departments (HOPDs) place on biologic medicines are both causing plan sponsors’ costs to soar and muting the potential savings that could come from biosimilars, according to a new report from the Employee Benefit Research Institute (EBRI). One of the report’s coauthors says that health care provider consolidation is largely the culprit — and it’s an issue that plan sponsors may struggle to combat.

While physician practices also mark up the prices of provider-administered drugs, HOPDs generally raise them even more, explains Paul Fronstin, Ph.D., director of health benefits research at EBRI. “And that’s because they’ve got purchasing power, and the purchasing power is increasing as they acquire more and more physician practices,” he adds.

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Radar on Drug Benefits

Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.