Why Is Medicine Marked Up So Much?

Surcharges on drug prices often result in higher reimbursement through health insurance companies. More than half of the commercial payers reimburse hospital ambulances as a percentage of the fees charged. Hospitals have incentives to increase markups because higher fees are linked to higher profitability. If you have already received an invoice with these surcharges, discuss a lower price with your doctor.

Hospitals get drugs from the pharmaceutical companies at a significant discount compared to what you would pay at the pharmacy, making these extreme surcharges all the more outrageous. Some higher prices, such as those for specialty and generic drugs, seem to be due to the entry of new drugs on the market, the researchers noted. Improve the transparency of surcharges by requiring hospitals to provide a reference rate for all medical bills, such as the one Medicare would pay for the same services so patients can compare amounts, and that hospitals pay the total fees as a separate line for their Annual income must specify statements. You certainly don’t expect your hospital medication to be cheap, but a 700% premium seems outrageous, and rightly so.

As shocking as this may be, these exorbitant drug surcharges are a recognized practice in the medical industry and are considered one of the factors contributing to the high cost of medical care in the United States. Price surcharges for medicines are widespread and contribute to the rising cost of medical treatment here in the United States. A new analysis by The Moran Company found that almost one in five hospitals increases drug prices by 700 percent or more. From access to medicines to intellectual property and drug safety, PhRMA is committed to driving public action that supports innovative medical research, improves treatments, and delivers real results.

This blog does not provide medical advice. It is intended for informational purposes only. Do not use it as a
substitute for professional medical advice, diagnosis, treatment, or disease prevention. Always seek the
advice of your physician or qualified healthcare providers for any questions you have regarding a medical
The views and opinions expressed on this blog are solely those of the original authors and other
contributors. These views and opinions do not necessarily represent those of Gabriel Nieves, LAC
Healthcare Solutions, LAC.us Staff, and/or any/all contributors to this blog/site.


Gabriel Nieves

After experiencing a variety of shortages, crises, and inefficiencies in the status quo of the procurement and distribution industry, I undertook the responsibility of building an interface for large organizations to abstract away uncertainty throughout their supply chain under most conditions.

We are focused on building a framework from which our teams of professionals on the ground can provide a new generation of procurement support and professional services for supply chain critical organizations around the nation.

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