Drugmakers agreed Saturday to spend $80billion over the next 10 years to lower drug costs for seniors and help pay for President Barack Obama's proposed health care reform, as part of an agreement hashed out with lawmakers and administration officials.
The deal means the pharmaceutical companies will extend discounts on prescription drugs to millions of seniors who pay thousands of dollars for drug costs not covered by their Medicare plans, the White House said.
The drugmakers have also agreed to pick up some of the costs of the president's health care reform legislation, which he hopes will be passed by Congress this year.
"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 in a statement announcing the agreement.
The deal marks a small breakthrough for key lawmakers pressing for health care reform, at a time when the administration needs to build momentum for its initiative. The announcement capped a challenging week for their cause, one in which an independent analysis by the Congressional Budget Office called into question the cost and effectiveness of two versions of the Senate's draft reform legislation.
Before Saturday's announcement, the Senate's GOP leadership said that Democratic efforts to overhaul health care will bury the nation in debt.
Sen. Mitch McConnell of Kentucky accused the Obama administration and congressional Democrats of rushing expensive and flawed plans that would result in rationing of care. McConnell's criticism came in the weekly GOP radio and Internet address.
"Throughout this debate, the administration's central argument has been that America needs health care reform for the sake of the economy," McConnell said. "Yet according to independent estimates, every health care proposal Democrats on Capitol Hill have offered would only hurt the economy."
On Friday, senior House Democrats unveiled their plans, but offered few clues as to how they would pay for them. The cost is expected to exceed $1 trillion.
Administration officials see the deal worked out between the drugmakers and Sen. Max Baucus, D-Montana, chairman of the Senate Finance Committee, as a major step forward.
Baucus said, "This new coverage means affordable prices on prescription drugs when Medicare benefits don't cover the cost of prescriptions."
Officials of the Pharmaceutical Research and Manufacturers of America also praised the deal.
The group "is committed to working with the administration and Congress to help enact comprehensive health care reform this year," said Billy Tauzin, its president and CEO.
Information from the Associated Press was used in this report.