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Hospital Charges and Reimbursement for Drugs: Analysis of Markups Relative to Acquisition Cost

Analyses of prescription drug spending trends may not always include the role various parts of the pharmaceutical supply chain play in those trends. This analysis examines hospital charges and reimbursement for 20 drugs for which hospital reimbursement data is provided in the Magellan Rx Management Medical Pharmacy Trend Report™: 2016 Seventh Edition (the Magellan report). Charges were calculated from claims data, as described in the methodology at the end of this report. Magellan reports that prescriptions in the hospital outpatient setting account for 52% of spending on medical-benefit drugs (drugs, typically physician-administered, that are reimbursed under health plans’ medical benefit rather than the pharmacy benefit) for commercial payers.


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