Drugmakers, Insurers Target Hospitals With 7-Figure Campaigns as $1 Trillion Medicaid Cuts Bite
Updated
Updated · POLITICO · May 15
Drugmakers, Insurers Target Hospitals With 7-Figure Campaigns as $1 Trillion Medicaid Cuts Bite
1 articles · Updated · POLITICO · May 15
PhRMA and insurer-backed groups have escalated campaigns against hospitals, arguing lawmakers should regulate hospital pricing and consolidation instead of drugmakers or health plans.
A seven-figure PhRMA ad blitz launched last week accuses hospitals of abusing the federal 340B drug discount program, after Hospital Watch ran a six-figure April campaign blaming consolidation for high prices.
The push comes as hospitals already face pending Medicaid cuts, possible Medicare payment reductions, tougher merger scrutiny and pressure to scale back drug discounts.
Hospitals say their political standing in Washington is slipping because their sector is harder to unify than drugmakers and insurers, even as all three industries spend record sums lobbying over Trump-era health policy changes.
That leaves hospitals confronting a worsening outlook in a $5 trillion healthcare system, with nearly $1 trillion in Medicaid cuts enacted last year and enhanced Obamacare subsidies set to expire at year-end.
With drugmakers, insurers, and hospitals blaming each other, who is truly responsible for soaring U.S. healthcare costs?
As AI supercharges lobbying, can regulators effectively police the healthcare industry's multi-billion dollar influence war?
U.S. Healthcare in Crisis: $1 Trillion Medicaid Cuts and the 340B Drug Program Under Siege
Overview
The U.S. healthcare system is facing major changes after the One Big Beautiful Bill Act (OBBBA) was signed into law in 2025. This law includes $1 trillion in Medicaid cuts and adds $4.1 trillion to the national debt over the next decade, mainly due to new tax cuts and spending programs. The impact of these Medicaid reductions will vary by state, with Medicaid expansion states—especially those relying on state-directed payments and provider taxes—hit hardest. California and New York are projected to see the largest funding losses, signaling a challenging future for hospitals and patient care across the country.