By Blessing Nweke
The Trump administration has proposed a new rule designed to reduce prescription drug costs for Medicare patients by preventing hospitals from charging large markups on discounted medicines purchased through a federal program. Officials estimate the proposal could save consumers about $1.1 billion during its first year if implemented.
The proposal targets hospitals participating in the 340B Drug Pricing Program, which allows facilities serving low-income communities to buy outpatient prescription drugs at significantly reduced prices. Under current rules, many hospitals can bill Medicare and insurers at rates higher than the discounted purchase price, keeping the difference. The administration argues this practice increases costs for patients and taxpayers.
Under the draft regulation, the Centers for Medicare & Medicaid Services would revise reimbursement rates for participating hospitals to better reflect the discounted prices they pay for medications. Administration officials say the change could reduce out-of-pocket costs for Medicare beneficiaries who rely on expensive outpatient treatments.
Hospital groups have criticized the proposal, warning that it could significantly reduce revenue used to support services for underserved communities. The American Hospital Association said the rule would place additional financial pressure on hospitals already facing rising operating costs and could affect access to care for vulnerable patients.
The proposal revives a similar effort pursued during Trump’s first term that was ultimately blocked after legal challenges. The administration says it has developed a revised approach based on new data and authority.
The rule will undergo a public comment period before any final decision is made. If approved, the administration expects the changes to take effect next year, potentially reshaping how Medicare reimburses hospitals for outpatient prescription drugs while lowering costs for millions of beneficiaries.
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