Expensive pills on the bill? PhRMA takes aim at hospitals in drug pricing campaign

Drugs and money sign
Pharma industry trade group PhRMA has a new ad in its drug pricing campaign, going after hospital medicine markups. (Getty/ADragan)

PhRMA is taking on hospitals again in a new iteration of its ad campaign around drug costs. Its charge? Hospitals mark up medicines as much as 700%.

The latest ad in the powerful trade group's "Let's Talk About Costs" campaign is based on PhRMA-funded research from The Moran Company, which used CMS data to examine costs and charges for all medicines from nearly 3,800 hospitals across the U.S. The research (PDF) found that 1 in 6 hospitals, or 17%, marked up 700% or more, while on average the hospitals increased med costs by 479%. Most hospitals (83%) marked up drugs 200% or more.

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One of PhRMA's new print ads reads: “Medicines don’t perform 700% better at a hospital. So why do some hospitals mark them up 700%?”

The new analysis builds on similar Moran Company research from last October that analyzed just 20 drugs but still found a similar average markup (487%). Neither analysis took into account government 340B drug discounts to hospitals.

“In order to truly have a discussion about making medicines more affordable for patients, we must address the role hospitals play in driving up medicine costs,” said Holly Campbell, deputy vice president of public affairs at PhRMA, in an email interview.

The American Hospital Association, which has been outspoken in highlighting pharma’s role in inflated drug pricing, did not respond to PhRMA’s new ads but did post a blog article in September when PhRMA released the first Moran report and print ad. It accused PhRMA then of an “obvious attempt to divert attention away from a problem of their own making.”

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PhRMA began the “Let Talk About Costs” print and digital ad campaign in the summer of 2017 to address drug costs and raise awareness about pricing effects outside the pharma industry's control. The effort addressed pharmacy benefit managers, hospitals and other middlemen, and it started a tit-for-tat war with health insurers. In January, PhRMA launched a consumer-facing website to continue highlighting the industry's perspective.

The new ads are running in print and on radio, along with digital and social channels in Washington, D.C.—to reach PhRMA's chief audience of lawmakers—and in select states.