WASHINGTON (AP) — 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.
There is the risk that hospital systems could see their revenues decrease, which could have consequences in the communities they serve in terms of the services they offer and jobs they provide. 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 battle between hospitals and pharmaceutical companies, with each side attempting to enlist lawmakers in maintaining or changing the benefit.
The agency estimates that the average older adult with Medicare Part B coverage who is administered one of these drugs would save $800 a year in co-payments. That would work out to a total savings of $1.1 billion for everyone with that coverage.
The savings over 10 years could total about $20 billion, according to a White House official who requested anonymity to discuss the rule before the official announcement. The official said the proposed rule was not previewed for hospital groups before the release.
In a policy draft of the rule, the administration gave a specific example of how the current system works for the prostate cancer drug Lupron Depot. Hospitals under the 340B program can acquire a dose for roughly $700, but they can receive about $4,000 in Medicare reimbursement for administering it and an additional $1,000 from the patient co-payment.
The proposed rule would cut by roughly 40% that amount that hospitals in the discounted drug program could be paid through Medicare programs. If approved, the rule would go into effect at the start of next year.
In 2018 during President Donald Trump's first term, his administration tried to enact this same type of rule to reduce Medicare payments to hospitals. But the Supreme Court ruled in 2022 that the government could not provide a separate reimbursement plan for 340B hospitals.
The president signed an executive order in April 2025 to survey how much hospitals spend to buy drugs. The result of that survey led to the proposed rule, which would cap Medicare reimbursement for participating hospitals at the average sales prices, minus 33.4%. The reason why the average reimbursement rate would be cut is because the hospitals acquired the drugs at discounted prices.
Associated Press writer Ali Swenson in New York contributed to this report.
Bottles of medications sit on shelves at the Stormont Vail Retail Pharmacy in Topeka, Kan., Tuesday, June 2, 2026. (AP Photo/John Hanna)
KYIV, Ukraine (AP) — Russia hammered Kyiv in an 11-hour drone and missile attack overnight into Thursday morning, killing at least 20 civilians in the city and injuring scores more in what Moscow said was retaliation for Ukrainian strikes on Russian oil facilities.
Loud explosions shook the Ukrainian capital for hours during the night, with many people sheltering in subway stations after authorities issued air raid warnings. Emergency crews were still digging through the rubble of collapsed and charred apartment buildings in search of victims as dawn broke.
Russia’s Defense Ministry said in a statement that the deadly bombardment was in response to Ukraine’s long-range strikes that have caused severe fuel shortages and put pressure on President Vladimir Putin.
Ukraine's increasingly frequent and large-scale attacks — described by Zelenskyy as a 40-day blitz — have especially targeted oil refineries, causing a fuel crisis that has frustrated Russians, more than four years after Moscow's full-scale invasion of its neighbor.
Ukrainian officials say they are trying to force Putin to the negotiating table, but so far Moscow's response has been to hit back.
Diplomatic efforts to end the war, most recently by the Trump administration, haven’t produced results. Putin thinks that time is on his side, that Western support will peter out and that Ukraine’s resistance will eventually collapse under pressure from strategic bombing, Western analysts say.
The attack killed 20 people in Kyiv, according to Kyiv city administration head Tymur Tkachenko. More than 90 others were injured, according to Kyiv Mayor Vitali Klitschko.
Foreign Minister Andrii Sybiha said it was a “night of horror” in the capital.
Damage was recorded in 30 locations across the city, mainly residential buildings and civilian infrastructure, according to Tymur Tkachenko, head of the Kyiv City Military Administration. Some 20 residential buildings were damaged, Interior Minister Ihor Klymenko said.
Flashes from exploding drones and missiles lit up the night, and loud booms echoed through Kyiv. Tracers from air defense fire streaked through the air as a huge pall of black smoke rose into the sky.
Kyiv resident Serhii Budko said three or four ballistic missiles hit his district of the city. “We were inside the shelter and felt the shelter shaking — the ceiling and floor, everything,” the 24-year-old told The Associated Press.
In Kyiv's Desnianskyi district, people were trapped inside a damaged nine-story residential building, and in the Darnytskyi district six levels of a nine-story building collapsed.
Russia’s General Staff chief Gen. Valery Gerasimov reported the results of the “massive retaliatory strike” to Putin, Kremlin spokesperson Dmitry Peskov said.
The bombardment was “exclusively against military or military-linked targets,” Peskov said.
Russia's aerial attacks on Ukraine have repeatedly hit civilian areas. More than 16,000 Ukrainian civilians have been killed in the war, according to the United Nations.
Sybiha said in April that domestic production meets up to 75% of Ukraine’s military needs and accounts for up to 95% of long-range strikes against Russia. The location of the factories making those weapons is secret.
Elsewhere, in Ukraine’s central Dnipropetrovsk region a Russian guided bomb strike killed a 7-year-old girl and wounded four other people, including an 11-year-old girl, all members of the same family, regional head Oleksandr Hanzha said.
The attack used “high-precision long-range weapons” and drones on “military industry facilities and fuel and energy complexes in Kyiv and the Kyiv region, as well as military airfield infrastructure in four other regions of Ukraine,” the Russian Defense Ministry’s statement said.
It published a list of targets it said the barrage hit, mostly plants manufacturing and assembling Ukrainian drones, missiles and components.
Russia fired 74 missiles, 24 of them ballistic, and 496 drones of various types in the attack, Ukraine’s air force said.
Ukraine's air defenses have improved throughout the war, especially in countering Russian drones. But ballistic missiles are harder to stop, and Ukrainian officials have repeatedly pleaded with partner countries to supply more Patriot missile systems that offer the best protection.
Sybiha urged countries not to delay decisions on supplying air defense systems and missiles.
He rejected any Russian attempts to justify the strikes as retaliation for Ukraine’s long-range attacks, saying Ukraine was exercising its right to self-defense under Article 51 of the U.N. Charter while Russia remained the aggressor.
Sybiha said on X that the death toll may rise as rescue teams continue their work.
Ukrainian forces struck one of Russia’s largest oil refineries overnight in the Nizhny Novgorod region east of Moscow, starting a fire, Ukraine's General Staff said.
Also, Ukrainian forces struck a railway bridge over the Siverskyi Donets River in the Russian-occupied Luhansk region, it said. The bridge was used by Russian forces to transport personnel, weapons and military supplies, according to the General Staff.
Ukraine's recent success with drone strikes that keep Russian troops pinned down on the front line, disrupt Russian supply lines in the rear and damage oil facilities have brought a significant change in the war, Western analysts say.
“Russia’s spring-summer 2026 offensive has failed to achieve operationally significant gains thus far, and Russian forces’ rate of advance in June 2026 (was) a fraction of the rate of advance that Russian forces achieved in June 2025,” the Institute for the Study of War, a Washington-based think tank, said in an assessment late Wednesday.
Follow the AP’s coverage of the war in Ukraine at https://apnews.com/hub/russia-ukraine
A residential apartment building is seen damaged after a Russian strike on Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Efrem Lukatsky)
Elderly Liudmyla Tsapkova sits in her damaged apartment after the Russian missile attack in Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Danylo Antoniuk)
People look at the site of a Russian missile strike that hit a residential building in Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Efrem Lukatsky)
A woman looks at an apartment building burning after a Russian missile attack in Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Danylo Antoniuk)
People react at the site of a Russian missile strike that hit a residential building in Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Efrem Lukatsky)
People look at the site of a Russian missile strike that hit a residential building in Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Danylo Antoniuk)
A residential apartment building is seen damaged after a Russian strike on Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Efrem Lukatsky)
Smoke rises over the city center after a Russian attack on Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Efrem Lukatsky)
A woman walks past a burning apartment building after a Russian missile attack in Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Danylo Antoniuk)
An apartment building burns after a Russian missile attack in Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Danylo Antoniuk)
A woman looks at an apartment building burning after a Russian missile attack in Kyiv, Ukraine, Thursday, July 2, 2026. (AP Photo/Danylo Antoniuk)
