The price for the same prescription drug in different hospitals nationwide could have more than a $10,000 difference, according to a new report.
A report from 3 Axis Advisors used publicly available hospital data to analyze the cost differential between the same generic prescription drugs in hospitals across the country. It found a 2,347x differential between the minimum and maximum prescription drug prices in some cases. This means one insurance company could pay $1 for a prescription drug while another could pay $2,347 for the same drug purchased at a different hospital.
The report bears this out when it looks at prescription drugs across various hospitals. The report found 200 milligrams of Keytruda, a drug to treat cancer, ranged from $12,000 to $43,000. It also found 480 milligrams of Opdivo, another drug to treat cancer, ranged from $17,000 to $67,000.
The report found that, in some cases, uninsured patients could be receiving a better price for prescription drugs than insured patients. It pointed to various billing methods, inconsistent unit usage, and unclear contracts for the vastly different prescription drug prices.
In 2021, the Centers for Medicare & Medicaid Services implemented the Hospital Price Transparency Rule, a requirement for hospitals to publicly disclose detailed “standard charges” in prescription drug prices. However, the report’s analysis found this has done little to address vastly different prices across the country.
“While there is often consistency in list prices presented to payers and patients, the majority of a hospital’s patients – those with insurance – face a confusing array of potential prices,” the report reads.
The report also found other popular prescription drugs including Ocrevus, to treat multiple sclerosis, ranged from $16,000 to $65,000; Tysabri ranged from $6,500 to $27,000.
“These pricing disparities are significantly large enough to theoretically fund travel expenses between the hospitals while still resulting in significant savings,” the report reads.
Indeed, the report estimated a patient could obtain Keytruda through United Healthcare in Colorado for $12,059, but would likely pay $43,099 in Massachusetts. Similarly, the cost for Darzalez Faspro, a treatment for myeloma, cost $9,311 in North Carolina compared to $36,300 in Wisconsin.
Additionally, Tysarbi, a medication for multiple sclerosis and Crohn’s disease, cost $6,477 through Cigna in Tennessee and $26,451 in New Jersey.
“While transparency requirements have unveiled price variations, they have yet to achieve meaningful price standardization, consumer usability, or systemic affordability,” the report reads.
The report called for greater transparency and structural reforms to insurance and hospital pricing metrics. It called for standardized billing based on the number of units sold in a drug.
The report also called for hospitals to provide consumer-friendly search functions to negotiate and compare drug prices. Additionally, the report called on the Centers for Medicare and Medicaid Services to implement greater enforcement and oversight of its protocols.
“Hospital data revealed a new level of dysfunction that surprised even us drug pricing cynics,” said Antonio Ciaccia, president of 3 Axis Advisors. “What we found wasn’t just complexity – it was systemic chaos that makes it nearly impossible for payers and patients to understand or predict what they’ll pay at the hospital.”
The report comes as the Trump administration has sought to increase price transparency and lower insurance costs for millions across the country. Trump launched TrumpRx, a prescription drug tool for Americans to find prices on different products across the country.
He has also sought to reduce prices for common prescription drugs to similar levels as European countries. Most-favored-nation pricing means the U.S. would pay no more than the lowest price paid by peer countries. Trump has thus far managed to get 17 of the largest drug manufacturers across the country to agree on most-favored-nations prices.
“This represents the greatest victory for patient affordability in the history of American health care, by far, and every single American will benefit,” Trump said.
Advocates for reform have celebrated the administration’s moves to reduce prices but have called for greater price transparency within the country as well.
“Maximum price transparency with stronger standardization and enforcement will allow patients to shop, make informed choices, and be protected from overcharges,” said Cynthia Fisher, founder of Patient Rights Advocate.
