The White House has announced a deal reached over the weekend with pharmaceutical companies that will lead to lower medication costs for the elderly and the disabled.
Senator Max Baucus, a Montana Democrat and chairman of the Senate Finance Committee, spearheaded the negotiations with Pharmaceutical Research and Manufacturers of America (PhRMA), which resulted in the industry agreeing to spend $80 billion over the next decade to improve drug benefits for Medicare patients.
The key provision of the agreement is the 50 percent discount on branded drugs for patients who fall in the so called doughnut hole – the gap in coverage by Medicare part D after drug costs reach $2,700 but before they meet the threshold for catastrophic coverage.
President Obama has said that "[t]he agreement to lower prescription drug costs for seniors will be an important part of the [healthcare] legislation I expect to sign into law in October," suggesting the expected cost savings will lower the estimated $1 trillion price tag for the healthcare reform.
Meanwhile, pharmaceutical industry representatives have hailed the deal as a "win" given that the $80 billion is considerably less than the $130 billion originally sought by legislators as the negotiations began, according to Pharma Times.
Media reports suggest the deal could take effect in July 2010.