Trump administration proposes rule to cut Medicare drug prices by $1.1 billion

The Trump administration is proposing a new rule on Thursday to keep hospitals from charging markups on discounted drugs for Medicare patients and says that could save consumers $1.1 billion next year, according to estimates obtained by The Associated Press. The rule would apply to hospitals that serve low-income patients under what is known as the 340B program, which lets hospitals buy outpatient prescription drugs at discounted prices. But in many cases, hospitals can bill insurers at rates that exceed those costs, allowing hospitals to keep the difference and resulting in higher costs to patients. Under the proposed rule, the Centers for Medicare & Medicaid Services would change the formula for what hospitals participating in the program can get reimbursed, in an effort to cut costs for patients. The Republican administration has sought to show during an election year that it is tackling the challenges of affordability for U.S. families at a time when rising healthcare costs are driving financial strains for households and the government alike. While the administration has taken several steps it says will save money on medical treatment, it is unclear how much savings might ultimately materialize based on the complexity of the country’s healthcare system. The American Hospital Association said the proposed rule would compound the financial pressures its members face. “These proposals will undermine the ability of hospitals to maintain essential services and protect affordable access to care for those who depend on the 340B program,” said Ashley Thompson, the group’s senior vice president for public policy analysis and development. There is the risk that hospital systems could see their revenues decrease, which could have consequences in the communities they serve. The 340B program was initially designed as a way for healthcare providers to stretch scarce federal resources to better serve more patients. But it has long been at the center of a lobbying