Trump administration proposes rule to limit hospital drug markups for Medicare patients

The Trump administration proposed a new rule in July 2026 that would stop hospitals from charging high prices for certain discounted medicines given to Medicare patients. The rule targets the 340B programme, which lets hospitals buy prescription drugs at reduced rates. Critics say hospitals have been reselling these drugs at much higher prices and keeping the profit.

Under the proposed changes, hospital reimbursement rates for these drugs would fall by around 40 percent. The government estimates this would save Medicare patients roughly $1.1 billion each year, with the average patient saving about $800 annually in co-payments. One example given was a prostate cancer drug that hospitals buy for approximately $700 but currently claim around $5,000 in combined reimbursement and patient payments. The rule would take effect in early 2027 if approved.