Medicare proposes 33% cut to 340B drug payments for hospitals

Medicare has released a proposal to cut payments to hospitals for drugs bought through the 340B discount program by more than a third. Under the plan, Medicare would reimburse hospitals at the average sales price minus 33.4%, compared with the current formula of the price plus 6%.

The agency says its surveys showed some patients were paying more for 340B drugs than the hospitals themselves, prompting the change.

Hospital groups representing nonprofit and academic institutions quickly condemned the proposal, warning that it would shift funds away from safety‑net hospitals toward for‑profit systems.

The payment reduction is part of a broader rule on hospital outpatient services and adds to the ongoing debate over the 340B program’s role in the health‑care system.