July 8, 2009
Analyses of prescription drug spending trends may not always include the role various parts of the pharmaceutical supply chain play in those trends. We estimate, based on publicly available data, how much hospitals paid, on average, to acquire a drug from its manufacturer. We then calculate the amount by which hospital charges and commercial insurers’ payment to hospitals for those drugs exceeded their acquisition cost. The tables that follow analyze hospital mark-ups and margins by site of service for 20 individual drugs for commercial payers.