Pharma may have just given health reform a much-needed boost. The details are vague at this point, but the headline isn't: Drugmakers have agreed to foot the bill for $80 billion in Medicare drugs over the next decade. Some portion of that will benefit Medicare recipients, who, as you know, are on the hook for several thousand dollars' worth of meds annually during the "donut hole" coverage gap. Some other portion will lower the cost of health reform, probably via bigger rebates to Medicare.
To be sure, $80 billion is less than one-tenth the projected cost of healthcare reform. But by striking this cost-sharing deal with one of the reform effort's leaders--Sen. Max Baucus--and the White House, drugmakers could shame other providers into cutting their prices, too. Lawmakers will be able to twist some healthcare arms more forcefully, now that pharma has made this deal. And by delivering real, live cost-cutting, the reformers will be able to neutralize critics' most tangible beef: That reform costs too much.
AARP is set to endorse the deal today at the White House, along with the President, who's already praised the agreement and called it a "turning point" in reform efforts. PhRMA was quick to pat itself (and the industry) on the back for the savings: "America's pharmaceutical research and biotechnology companies are signaling their strong support for these critically important efforts," CEO Billy Tauzin said in a statement. This is a once-in-a-lifetime opportunity and, working together, we can make this hope for a better tomorrow a reality today." Whether this deal will help drugmakers avoid greater revenue losses to healthcare reform remains to be seen.
- see PhRMA's statement
- read the Reuters story
- see the Wall Street Journal coverage
- check out the Washington Post news
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