Prices of drugs for seniors could drop sharply in the US in the wake of a deal between the Obama Administration and the drug industry.
The pharmaceutical companies will now extend discounts on prescription drugs to millions of seniors who often must pay staggering drug costs not covered by their Medicare plan. The industry could spend up to $80 billion over the next 10 years under this head.
The deal was reached Friday night between the pharmaceutical lobby, the White House and Senator Max Baucus, chairman of the Senate Finance Committee.
The drug makers also have agreed to pick up some of the costs of the president's plan to remake the nation's healthcare system, legislation he hopes Congress will pass this year, according to a White House announcement.
"We are at a turning point in America's journey toward healthcare reform," Obama said Saturday. "Key sectors of the healthcare industry acknowledge what American families and businesses already know -- that the status quo is no longer sustainable."
Officials of the Pharmaceutical Research and Manufacturers of America said Saturday that they hoped to help make that happen.
"PhRMA is committed to working with the administration and Congress to help enact comprehensive healthcare reform this year," said W. J. "Billy" Tauzin, president and chief executive of PhRMA and a former congressman from Louisiana.
"We share a common goal: Every American should have access to affordable, high-quality healthcare coverage and services."
In addition to the agreement to help seniors purchase prescription drugs during the gap in Medicare coverage, several officials report that the industry has agreed to pay higher rebates to the government for certain drugs, thus putting more money into the Federal Treasury.
The deal comes at a crucial time as the drive for health care reform appeared to lose some of its steam during the past week.
The decision by pharmaceutical companies to join the healthcare overhaul plan was a political one: Strategists concluded that government action was likely, and the companies might fare better at the table than on the sidelines.
It is also believed that that the government's success with the pharmaceutical companies will add increasing pressure on other stakeholders, such as the private health care insurers, to come to the table with serious contributions of their own, said Ricky Ungar, noted columnist.