Analysis Tallies Premium Impact of Provider Markups on Specialty Drugs

If providers charged the same price as specialty pharmacies for specialty medications, $13.1 billion in spending on health insurance premiums and premium equivalents could have been avoided in 2024, according to a new analysis from the consulting firm Oliver Wyman, commissioned by AHIP.

Provider-administered drugs can be delivered directly to clinicians from specialty pharmacies — known as white bagging — or providers can purchase the drugs directly and store the drugs until they are needed for patient care, which is called “buy and bill.” When the “buy and bill” method is utilized, the providers can charge a markup for the drug that is passed through to the patient’s bill.