Out-of-pocket cancer drug prices: hospital pricing variation and the institutional case for patient access

Author: Evie Wang, COO, PatientsForce
 

The study sampled 90 hospitals across Taiwan, analyzing two oral targeted therapies already covered by the NHI against their NHI-approved prices as the benchmark. The results show that hospital prices for lung cancer targeted drugs exceeded the NHI-approved price by 0% to 30%, with a median of about 20%; breast cancer targeted drugs ranged from 0% to 37%, with a median of about 15%. Further analysis found statistically significant associations between markup levels and hospital system, religious affiliation, and regional market structure. For example, public university-affiliated hospitals and some religiously affiliated hospitals were relatively more likely to apply high markups, and clear differences also emerged across NHI administrative regions.

The study notes that variation in hospitals' out-of-pocket pricing also reflects, to some degree, gaps in regional healthcare resources and competitive market conditions across Taiwan. In regions where medical resources are more concentrated, market competition and pricing strategy relate to each other differently, and in the breast cancer drug market — where competing products exist — county-level market concentration (HHI) remained significantly correlated with pricing markups.

For pharmaceutical industry professionals, the study also reveals an often-overlooked phenomenon: while the industry keeps debating the "drug price black hole," even after a drug has been through NHI price negotiations and supply chain price adjustments, patients still face price differences at the hospital level when they ultimately obtain it. In other words, access to medicine depends not only on whether a drug is reimbursed, but also, closely, on hospital pricing strategy.

Against this backdrop, the study raises another issue that deserves industry and policy discussion: when patients must pay for drugs themselves, it would better serve their interests for hospitals to release prescriptions and let community pharmacies or market channels supply self-paid drugs. Some healthcare systems internationally divide the work between hospitals and community pharmacies, allowing patients to fill prescriptions through different channels at prices with more market flexibility. For Taiwan, this institutional discussion involves not only drug price governance but also hospital governance models, drug distribution management, and equitable patient access to treatment. As new cancer drugs keep arriving and treatment costs rise year after year, striking a balance between quality of care and market mechanisms may become a major shared concern for health policy and the industry.

Meanwhile, in recent years pharmaceutical companies have used Patient Assistance Programs (PAPs) to help ease patients' medication burden to some extent — for example through medication education, treatment support, or partial cost assistance. Yet with new cancer drugs routinely costing tens of thousands, even well over a hundred thousand, NT dollars per month, self-paid treatment remains a heavy burden for patients who do not qualify for NHI reimbursement. When price gaps between hospitals can reach 30%, a patient on a one-year course of certain oral targeted therapies could end up paying nearly NT$300,000 more.

In this context, even where a PAP provides a degree of support, it can hardly offset the full impact of these price differences. If future policy design could appropriately introduce a more transparent free-market mechanism — for example, having hospitals release prescriptions in a compliant manner so that patients can obtain drugs through different pharmacy channels — prices might move closer to competitive market levels while maintaining quality of care and medication safety, further improving access to cancer treatment.