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

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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