Trump Rule Aims at Medicare drug price cuts, Projects $1.1 Billion Savings

Medicare drug price cuts: rule targets 340B hospitals

The administration’s draft, set to roll out next year, would force hospitals that buy discounted outpatient drugs under the 340B program to accept lower Medicare reimbursements, potentially saving ↑ $1.1 billion annually for beneficiaries. Average Medicare Part B enrollees could see co‑pay reductions of roughly $800 per year, according to a Reuters analysis. The Centers for Medicare & Medicaid Services plan to trim reimbursement by about ↓ 40%, using a formula that ties payments to average sales price less 33.4%. Hospital groups, represented by the American Hospital Association, warn the move could erode margins and jeopardize services in low‑income areas. A similar effort in 2018 was struck down by the Supreme Court, but the White House argues the new approach is grounded in a 2025 executive order that surveyed drug‑purchase costs. Critics argue the rule may shift financial risk to providers while offering limited relief to patients.

“These proposals will undermine the ability of hospitals to maintain essential services,” said Ashley Thompson, AHA senior vice president for public policy.

The administration estimates a decade‑long impact of $20 billion in national savings, though the exact figure remains contested. For further context, see Bloomberg coverage.

Words by: Dr. Silas Mercer

Biotech & Longevity Editor