How Specialty Pharmacies Compare to Provider, Hospital on Drug Pricing

AHIP released updated data on drug pricing increases, comparing hospital costs and the prices that physician offices pay compared to specialty pharmacies.

The payer organization analyzed price increases for the ten drugs that are frequently delivered through specialty pharmacies. Data for these 10 drugs came from the Merative MarketScan Commercial Database. The data reflect hospital, physician office, and specialty pharmacy prices from the start of January 2019 through the end of December 2021.

The ten drugs that the payer organization assessed were darzalex, keytruda, lucentis, ocrevus, opdivo, orencia, prolia, remicade, rituxan, and tecentriq.

The study found that drugs were less costly for patients when payers leveraged a specialty pharmacy. On average, physician offices marked up drug prices by $1,559 and hospitals applied a markup of $8,278.

“Specialty pharmacies lower a patient’s health care costs by preventing hospitals and physicians from charging exorbitant fees to buy and store specialty medicines themselves,” the study explained. “Secure, direct delivery is more efficient and effective and reduces health care costs.”

In a hospital setting, the cost of drugs was, on average, around $8,200 higher than it would be if the drugs were obtained through a specialty pharmacy. Hospitals charged 118 percent more than specialty pharmacies for the same drugs.

The difference in physician offices was not as stark, but remained significant. In physician offices, the same drug could cost $1,500 more than it would through a specialty pharmacy. Drug prices in physician offices were 23 percent more than specialty pharmacies’ prices.

Prolia, a treatment for osteoporosis, saw the most dramatic price difference when comparing physician office and hospital drug prices to specialty pharmacy drug prices. In the hospital setting, the price of prolia was 212 percent of the cost through a specialty pharmacy or $2,795 more. The drug price was 49 percent higher than specialty pharmacies in the physician office setting or $651 more.

The hospital price was closest to the specialty pharmacy price for the drug ocrevus, a therapy for multiple sclerosis. But even in this case, the hospital price was 65 percent higher than the specialty pharmacy alternative and the mark up was worth $22,078, which is more than any of the other markups.

Among physician offices, the price difference was smallest for remicade, which treats Crohn’s Disease and psoriasis, and rituxan, which treats rheumatoid arthritis. Physician offices priced these drugs six percent higher than specialty pharmacies. Nevertheless, the small markups were still worth hundreds of dollars. Physician offices marked up remicade by $277 on average and rituxan by $579.

“Specialty pharmacies improve health care affordability while protecting patient safety. AHIP encourages lawmakers to support the use of specialty pharmacies, and to reject policies that take away lower-cost choices from patients,” the study concluded.

Payers have turned increasingly to specialty pharmacies to control rising drug costs. In November 2022, Elevance Health announced plans to acquire a specialty pharmacy that would focus on chronic disease management.

Employer groups have recommended that employers leverage specialty pharmacies to break into biosimilar adoption. At the beginning of 2023, experts anticipated that this strategy would take root.