Medicare Patients Could Save $1.1 Billion Under Proposed Drug Pricing Rule

The proposed rule would limit hospital markups on discounted outpatient drugs purchased through Medicare’s 340B program.

By yourNEWS Media Newsroom

Medicare patients could save an estimated $1.1 billion on prescription drugs under a proposed rule aimed at limiting how much hospitals can charge for discounted medications.

The rule would apply to hospitals participating in Medicare’s 340B program, which allows certain hospitals serving low-income patients to buy outpatient prescription drugs at reduced prices. The proposal would prevent hospitals from charging markups on those discounted drugs, according to the Associated Press.

Under the current structure, hospitals can purchase eligible drugs at steep discounts through the 340B program but often bill insurers at higher reimbursement rates. Hospitals are then able to keep the difference between the discounted acquisition cost and the billed amount.

The proposed rule from the Centers for Medicare & Medicaid Services would create a reimbursement formula for hospitals participating in the program. That formula would reduce how much hospitals can collect for the drugs, lowering costs for Medicare patients.

The change is intended to reduce out-of-pocket expenses for beneficiaries while limiting hospital profits from discounted drug purchases.

If finalized, the rule would mark a significant shift in how Medicare handles reimbursement for 340B drugs and could produce more than $1 billion in savings for patients.