Alas, that’s not what the latest data reveal.
DCI’s analysis of four national commercial insurers—Aetna, Anthem, Cigna, and UnitedHealthcare—and 26 hospitals found that:
- Hospitals still earn significant markups over average sale price (ASP). 340B hospitals earn even more.
- Insurers pay wildly varying amounts for the same drug.
- Some hospitals get paid significantly more than others for the same drug.
- Insurers can pay more for a lower-cost biosimilar than for the higher-cost reference product.
Transparency was supposed to clean things up—but someone forgot to bring the mop.
HERE COMES THE SUN
Turquoise Health graciously provided DCI with a sample from its Drug Primary Rates data, which combine negotiated rates reported by hospitals and by payers.
Turquoise Health draws in part on data from CMS’s Hospital Price Transparency rule, which requires hospitals to report previously non-public details about their third-party contracts with commercial health plans. The data also rely on the Transparency in Coverage rule, which requires payers to report in-network rates for covered items and services. Turquoise Health’s full dataset includes over 6,000 hospitals and health systems. To learn more about accessing these data, visit turquoise.health.
We focused our analysis on Avastin (bevacizumab) and its two largest biosimilar competitors. Avastin was among the drugs with the highest pre-rebate share of commercial medical benefit drug spending in 2019 (prior to the launch of biosimilars). Avastin now faces five biosimilar competitors. Two of these products—Mvasi and Zirabev—now account for the majority of the unit market share in the bevacizumab market. During 2024 and early 2025, Pfizer had Zirabev on shortage due to manufacturing delays, but the product is now available.
Our sample included the March 2025 payment amounts negotiated between the top 26 non-profit or government-owned cancer hospitals and four national commercial insurers—Aetna, Anthem, Cigna, and UnitedHealthcare. Not all hospitals had published rates for each payer for each product. Information about the computation of the negotiated rates is not publicly available.
Commercial payment rates exclude the value of any rebates that manufacturers paid to the plans. For 2024, 35% of employers and 76% of commercial health plans reported receiving rebates for provider-administered injectable and infused drugs billed under the medical benefit. (source) The prevalence and value of medical benefit rebates have grown as innovator products have begun competing with biosimilar products.
The wholesale acquisition cost (WAC) list price for the three products were comparable. Avastin’s WAC was $3,188. The biosimilars’ list prices were discounted: Mvasi was $2,791 (−12% less than Avastin), and Zirabev was $2,454 (−23% less than Avastin).
Turquoise Health data also includes each product’s ASP payment limit under the Medicare Part B program. The ASP equals a drug’s list price minus all price concessions to U.S. purchasers (excluding sales that are exempt from Medicaid “best price” calculations and sales to other federal purchasers). ASP approximates the commercial pricing of a provider-administered drug, so this measure includes the effect of commercial rebates. A drug's ASP will be higher than the net price received by the manufacturer.
For more details on the distribution and reimbursement of provider-administered drugs, see Chapter 3 of DCI’s Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.
MARKUP MADNESS
The chart below summarizes the results of our analysis.
[Click to Enlarge]
While some conclusions mirror our 2024 analysis, there are several new findings worth highlighting:
- Hospitals earn significant markups over ASP. 340B hospitals earn even more. The dashed red line shows the ASP for each product. Across the Big Four payers, hospitals, on average, received 190% of Avastin’s ASP, 203% of Mvasi’s ASP, and 173% of Zirabev’s ASP.
The dollar value of markups were significant, especially for 340B hospitals. In 2023, MedPAC reports that 340B hospitals acquired single-source drugs, biologics, or biosimilars at an average discount of ASP – 27%. (source). Consequently, the average dollar spreads and gross margins for the three products were:- Avastin = $3,218 (39%)
- Mvasi = $1,406 (36%)
- Zirabev = $865 (42%)
- Insurers pay wildly varying amounts for the same drug. The table below shows the average, minimum, and maximum reimbursement by the payers for each of the three products. For comparable quantities, hospitals were paid from $830 (United) to $6,012 (Aetna) for Zirabev, from $1,025 (Cigna) to $6,756 (Aetna) for Mvasi, and from $2,396 (Aetna) to $10,878 (Cigna) for Avastin.
[Click to Enlarge]
For Avastin and its two primary biosimilar competitors, Aetna paid higher rates than the other three payers. However, Aetna’s rates are now closer to the other payers than they were in 2024.
- Some hospitals get paid significantly more than others for the same drug. Reimbursement rate also varied across the 26 hospitals for the same payer.
The chart below illustrates Aetna’s payments to 22 of the hospitals in our sample. (Complete reimbursement information wasn’t available for the other four hospitals.)
[Click to Enlarge]
Aetna’s payments to the 22 hospitals for Avastin ranged from $2,396 (UPMC Shadyside) to $10,112 (Ronald Reagan UCLA Medical Center).
- Insurers can pay more for a lower-cost biosimilar than for the higher-cost reference product. In general, reimbursement rates for the biosimilars were below the reference product. However, there were some notable exceptions.
For instance, reimbursement rates for Mvasi at five hospitals—Duke University Hospital, Fox Chase Cancer Center, UNC Medical Center, Emory University Hospital, and Ronald Reagan UCLA Medical Center—exceeded Mvasi’s ASP by 400% or more.
In about one out of ten cases, total hospital reimbursement for Mvasi or Zirabev was even greater than the brand-name drug's list price.
Adoption of provider-administered biosimilars is growing, prices are dropping, and formulary barriers continue to fall. Yet despite this progress and the extensive regulatory efforts to bring transparency to the buy-and-bill market, substantial inefficiencies remain.
We still lack the data to fully explain why reimbursement rates vary so widely, why markups remain excessive, and why lower-cost biosimilars are sometimes reimbursed more generously than their brand-name counterparts.
It's no secret that hospitals with dominant market positions can demand higher payments and face little pressure to reduce prices. (Too many sources to list, but check out this RAND study or a recent Health Affairs paper.)
So, even with greater transparency, the buy-and-bill system remains frustratingly opaque. Insurers continue to tolerate wide pricing disparities and hefty hospital markups—inefficiencies that ultimately hit plan sponsors and patients hardest.
The namesake of my alma mater once said: “Sunlight is said to be the best of disinfectants.” We keep flooding the drug channel with light. So, why does the water still look murky?
This article was coauthored by Adam J. Fein, Ph.D., Carol Tao, and Greis Kapexhiu.
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