“The agreement by pharmaceutical companies to contribute to the health reform effort comes on the heels of the landmark pledge many health industry leaders made to me last month, when they offered to do their part to reduce health spending $2 trillion over the next decade,’’ Obama said. “We are at a turning point in America’s journey toward healthcare reform.’’
Baucus, a Montana Democrat, has been negotiating with numerous industry groups for weeks as he tries to draft legislation that meets Obama’s goal of vastly expanding health coverage, has bipartisan support, and does not add to the deficit.
Baucus’s announcement said drug companies would pay half of the cost of brand-name drugs for seniors in the so-called doughnut hole, a gap in coverage that is a feature of many of the plans providing prescription coverage under Medicare.
In addition, the entire cost of the drug would count toward a patient’s out-of-pocket costs, meaning that their insurance coverage would cover more of their expenses than otherwise.
While none of the changes in the prescription drug program would directly reduce government costs, several officials said the industry agreed to measures that would give the Treasury more money under federal health programs. In particular, officials said drug companies would probably pay higher rebates for certain drugs under Medicaid, the program that provides healthcare for the poor. Those funds would be used to help pay for legislation expanding health insurance for millions who now lack it.
