Skip to Content

Pricing of Specialty Drugs


Analysis of the impact on premiums of provider markups on specialty drugs

Document Info

Published on Apr 18, 2024

Download and read the full Resource.

Related Issues
High-Price Drugs

Resource Details

Executive Summary

Oliver Wyman was commissioned by AHIP to analyze medical and pharmacy data to assess the impact on the cost of health insurance of specialty drugs that are purchased by providers directly and are marked up before being billed to patients when they could alternatively be supplied by a specialty pharmacy at a lower cost to the patient. Our key findings include the following:

  • The cost of specialty drugs that are supplied through a specialty pharmacy are less expensive to consumers than the same drugs when bought and billed by a provider.
  • The cost of markups charged by providers on specialty drugs represents about 0.7% of total health expenditures.
  • Consumers and employers will pay on average $50 more for single coverage and $175 more for family coverage in premiums in 2024 due to the markups charged by providers to supply specialty drugs that could have been supplied by a specialty pharmacy.
  • The total value of health insurance premiums and premium equivalents that could have been saved if providers charged the same price for specialty drugs as those available from specialty pharmacies would be as much as $13.1 billion in 2024.