Cash and Commercial Negotiated Prices of Physician-Administered Drugs in US Hospitals

ABSTRACT

Using nationally representative data, we found that for common physician-administered drugs, hospitals’ cash prices are frequently lower than their median—and sometimes even their lowest—commercial negotiated prices. This finding is important for uninsured patients and patients enrolled in high-deductible health plans, the number of whom is expected to grow due to recent and prospective policy changes in Medicaid and the individual markets. Assembling patient-friendly databases and applications that incorporate cash prices, the lowest negotiated prices, and Medicare rates could facilitate patients’ comparison shopping and enhance patient access.

Am J Manag Care. 2026;32(3):143-145. https://doi.org/10.37765/ajmc.2026.89892

Takeaway Points

• Hospitals’ cash prices are frequently lower than their commercial negotiated prices for common physician-administered drugs.
• Patient-friendly databases and applications could promote price competition, improve affordability, and enhance patient access.

The 2021 federal hospital price transparency rule requires hospitals to publicly disclose both their cash and commercial negotiated prices for hospital services. Prior research based on the disclosed data has found that cash prices are often lower than negotiated prices.^1-3 However, little is known about this relationship for physician-administered drugs. Understanding this relationship has important implications for uninsured patients and patients enrolled in high-deductible health plans, the number of whom is expected to grow due to recent and prospective policy changes in Medicaid and the individual markets.^4,5 In this study, we used a large national data set to compare cash and negotiated prices for common physician-administered drugs within the same hospital.

METHODS

We used the CMS Part B Spending Dashboard to identify the 20 highest-spending physician-administered drugs in traditional Medicare.⁶ We then used May 2024 publicly disclosed pricing information compiled by Turquoise Health, whose data has been used in prior academic research.^1-3 Hospitals that reported prices for fewer than 3 drugs or could not be matched to the American Hospital Association database by Medicare identifier were excluded.

Because each commercial plan negotiates its own price, we calculated the within-hospital lowest, median, and highest negotiated prices for each drug and compared them to the hospital’s cash price to determine the percentage of hospitals where the cash price was lower than the lowest, median, and highest negotiated prices. Within-hospital comparisons avoided price measurement noise stemming from inconsistently reported drug units and dosing across hospitals, which posed challenges for between-hospital comparisons. Finally, we compared hospital characteristics between those with cash prices lower than median commercial prices for the 3 most common drugs (ie, denosumab, infliximab, and octreotide) and other hospitals with available data.

RESULTS

The 20 highest-spending physician-administered drugs in traditional Medicare are listed in Table 1. A total of 2137 unique hospitals disclosed both cash and commercial negotiated prices for at least 3 of these drugs (eAppendix [available at ajmc.com]). The number of hospitals reporting both cash and negotiated prices for a given drug ranged from 151 for pemetrexed to 1966 for denosumab (Table 1). The median number of commercial plans per hospital negotiating for a given drug ranged from 9 to 21.

The share of hospitals where the cash price was lower than the lowest commercial negotiated price ranged from 7% for ranibizumab to 20% for pembrolizumab. Compared with the median negotiated price, the cash price was lower in 29% of hospitals for pemetrexed and 50% for rituximab plus hyaluronidase. Relative to the highest negotiated price, the cash price was lower in 58% of hospitals for pemetrexed and 81% for aflibercept.

Hospitals with cash prices lower than their median negotiated prices for the 3 most common drugs were more likely to be nonprofit, small, and located in rural areas (Table 2).

DISCUSSION

Using nationally representative data, we found that for common physician-administered drugs, hospitals’ cash prices are frequently lower than their median—and sometimes even their lowest—commercial negotiated prices. Some hospitals may set competitive cash prices to attract price-sensitive uninsured and underinsured patients for direct transactions, thereby avoiding the administrative complexities and payment delays associated with insurance.

Our analysis extends prior literature examining the relationship between hospital cash prices and commercial negotiated prices,^1-3 as well as commercial pricing for physician-administered drugs.⁷ Due to its descriptive nature, this study is unable to identify factors influencing this relationship (eg, the 340B Drug Pricing Program), which presents a promising area for future research. The results, based on hospitals that disclosed pricing information, may not be generalizable to all hospitals or to specific subsets characterized by particular ownership, teaching status, specialty, or other factors.

Hospitals’ self-disclosed pricing information, due to the size, technicality, and storage format, is typically inaccessible to average patients. Private companies and government agencies at the federal and state levels could consider assembling patient-friendly databases and applications that incorporate cash prices, the lowest negotiated prices, and Medicare rates to facilitate patients’ comparison shopping for drugs and hospital services. These efforts could promote price competition, improve affordability, and enhance patient access.

Acknowledgments

The authors thank Xu Wang, MS, for assistance with data management. Ms Wang was not compensated for her role in this work.

Author Affiliations: Department of Health Policy and Management (AL, YW, GFA, GB) and Department of Epidemiology (GCA), Johns Hopkins Bloomberg School of Public Health, Baltimore, MD; Division of General Internal Medicine, Johns Hopkins Medicine (GCA, GFA), Baltimore, MD; Johns Hopkins Carey Business School (GB), Baltimore, MD.

Source of Funding: This research was funded by Arnold Ventures. The content is solely the responsibility of the authors and does not necessarily represent the official views of Arnold Ventures.

Author Disclosures: Dr Liu receives payment from Robbins Geller Rudman and Dowd LLP for unrelated work. Dr Wang receives research grants from Arnold Ventures and Peterson Center on Healthcare. Dr Alexander is past chair of the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee and is a cofounding principal and equity holder in Stage Analytics. These arrangements have been reviewed and approved by Johns Hopkins University in accordance with its conflict of interest policies. Dr Bai receives support from the Peterson Center on Healthcare and PatientRightsAdvocate.org. Dr Anderson reports no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (AL, YW, GCA, GFA, GB); acquisition of data (YW); analysis and interpretation of data (AL, YW, GCA); drafting of the manuscript (AL, GB); critical revision of the manuscript for important intellectual content (AL, GCA); statistical analysis (AL, YW); obtaining funding (GFA); administrative, technical, or logistic support (AL); and supervision (GFA, GB).

Address Correspondence to: Ge Bai, PhD, CPA, Johns Hopkins Carey Business School and Johns Hopkins Bloomberg School of Public Health, 100 International Dr, Baltimore, MD 21202. Email: gbai@jhu.edu.

REFERENCES

1. Wang Y, Meiselbach MK, Cox JS, Anderson GF, Bai G. The relationships among cash prices, negotiated rates, and chargemaster prices for shoppable hospital services. Health Aff (Millwood). 2023;42(4):516-525. doi:10.1377/hlthaff.2022.00977

2. Wang Y, Liu V, Wang Y, Bai G, Hsia RY. Emergency department trauma activation fees by payer type. JAMA Surg. 2024;159(6):718-720. doi:10.1001/jamasurg.2024.0012

3. Jiang JX, Makary MA, Bai G. Comparison of US hospital cash prices and commercial negotiated prices for 70 services. JAMA Netw Open. 2021;4(12):e2140526. doi:10.1001/jamanetworkopen.2021.40526

4. Medicare Part B spending by drug. CMS. Accessed January 10, 2025. https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-b-spending-by-drug

5. Inflation Reduction Act of 2022, HR 5376, 117th Cong, 2nd Sess (2022). Accessed October 10, 2025. https://www.congress.gov/bill/117th-congress/house-bill/5376

6. One Big Beautiful Bill Act, HR 1, 119th Cong, 1st Sess (2025). Accessed October 10, 2025. https://www.congress.gov/bill/119th-congress/house-bill/1

7. Xiao R, Ross JS, Gross CP, et al. Hospital-administered cancer therapy prices for patients with private health insurance. JAMA Intern Med. 2022;182(6):603-611. doi:10.1001/jamainternmed.2022.1022