Trump rule aims to cut Medicare drug costs by $1.1 billion

The Trump administration has proposed a rule it says would lower out-of-pocket drug costs for Medicare beneficiaries by preventing hospitals from charging markups on discounted medications. Officials estimate the change could save patients $1.1 billion next year.

The proposed rule, released by the Centers for Medicare and Medicaid Services (CMS) on Thursday, targets the federal 340B drug discount program. The program allows eligible hospitals serving low-income and uninsured patients to purchase outpatient drugs at a discount. Under current policy, these hospitals can bill Medicare at higher rates, keeping the difference. The new rule would cap Medicare reimbursement for these drugs closer to the hospitals' actual acquisition cost.

CMS Administrator Dr. Mehmet Oz stated the proposal focuses on patient affordability by aligning drug payments with costs and removing payment disparities. The agency said reducing payments for 340B drugs would directly lower beneficiary cost-sharing tied to those medications. A White House official, speaking anonymously, projected the average Medicare Part B beneficiary receiving one of these drugs could save about $800 annually in copayments, with...