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Researchers found that less than half of 61 cancer centers studied were complying with federal regulations on price disclosures. Some cancer centers also had substantial markups.
Many cancer centers aren’t releasing the prices for commonly used cancer therapies despite federal regulations requiring such disclosures, a recent study found.
Researchers from Brigham and Women’s Hospital examined 61 National Cancer Institute-designated cancer centers. Of the 61 cancer centers, 27 (44%) disclosed private-payer specific prices for at least one top-selling cancer drug as required by federal regulations. The study was published April 18 in JAMA Internal Medicine.
Roy Xiao, the lead author of the study, told Chief Healthcare Executive he hopes the work leads to a greater discussion about the need to disclose prices.
“We had one primary take home message: A minority of cancer centers were disclosing their negotiated prices,” Xiao said in a phone interview.
The facilities that did reveal their prices indicated they were marking up prices substantially above their acquisition costs for those with private insurance. Those prices varied widely.
The median price markups across all centers and payers ranged between 118.4% for sipuleucel-T, a vaccine used to treat prostate cancer, and 633.6% for leuprolide, a drug used to treat advanced prostate cancer. “The numbers, when you look at them, they certainly pop,” Xiao said.
Cancer drug prices varied widely between payers at the same hospital, the researchers found.
Price disparities couldn’t be explained by differences in costs at different facilities, different markets or labor costs. The authors said hospitals could have more success in negotiating prices based on their strength in a given market.
Cancer centers could use the profits from certain cancer therapies to help finance other services, the authors noted.
Still, policymakers should consider measures “to discourage or prevent excessive hospital price markups” of cancer therapies, the authors wrote.
The study comes as cancer spending in America has spiked in recent years. U.S. cancer spending rose from $39.1 billion in 2015 to $67.5 billion in 2019, a 72.6% increase. Many Americans battling cancer end up in debt and serious financial distress, as some novel therapies cost more than $100,000.
The rising cost of cancer therapies underscores the need for transparency in pricing, the authors wrote.
In January 2021, the Centers for Medicare & Medicaid Services instituted the Hospital Price Transparency rule, which compels hospitals to publicly disclose the payer-specific prices for drugs and other services. The researchers conducted the study from April 1 to Oct. 15, 2021.
In January 2022, CMS announced plans to raise the penalties for healthcare providers that aren’t complying with price disclosure requirements. Initially the fee was $300 per day for all hospitals, but CMS has raised the penalty to a maximum of $5,500 per day. Over the course of a year, hospitals could be fined up to $2 million.
“I think the increased penalty will lead to greater compliance,” Xiao said. “Hopefully we get to the point where the vast majority of hospitals are complying.”
With more transparency in the pricing, Xiao said there would be more market-based competition, and patients could more easily shop around for better prices.
So far, CMS hasn’t issued any fines to hospitals for noncompliance in price disclosures. Through December 2021, the agency sent warning letters to 335 hospitals and asked 98 hospitals to submit corrective action plans, the authors noted.
The researchers examined the top 25 injectable or infusible cancer drugs by Medicare Part B spending in 2019. The authors said they focused on injectable and infusible drugs because they are typically administered in a clinical setting and subject to hospital pricing.
The authors said they focused on prices from plans run by private insurers and did not include prices listed for public payers, such as Medicare.
Xiao said he was disappointed but not terribly surprised by the fact that some facilities didn’t disclose their prices, saying earlier studies had similar findings. Another recent study looked at 20 hospitals and found nearly half didn’t disclose negotiated drug prices.
A resident in the Harvard Medical School/Mass Eye and Ear/Mass General Brigham Residency Program in Otolaryngology, Xiao said he has been pleased with the feedback to the study.
“Everyone recognizes this as an important step forward in helping patients be more informed in their decision making and having ownership over their care," Xiao said.
There are 71 NCI-designated cancer centers, but 10 were excluded from the study because they were either laboratory research sites, exclusively pediatric hospitals, or were based in Maryland, which regulates prices for hospital services.
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