Questions Linger Over Pharmaceutical Deal Agreement To Cut Costs

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"As details emerge of the pharmaceutical industry's agreement to kick in $80 billion to help pay for health care reform, the deal is facing increasing skepticism from inside and outside the health care industry," Politico reports.

The deal includes $30 billion to lower seniors' drug costs and $50 billion to help pay for reform, which will come in four broad categories including Medicaid, Biogenerics, Medicare and a Reform fee, which will charge drug companies a fee to cover any difference between the cost of Medicare, Medicaid and biogenerics programs and the "$80 billion the industry has committed to spending."

Drugs will be sold to the Medicaid program at up to 23 percent off average drug pricing, and new biologic generic drugs will be allowed under the plan, but "others are beginning to wonder just how much money the deal will actually save taxpayers. The questions are reminiscent of the $2 trillion in savings six major health industry groups recently promised to deliver to the administration, only to find that many of their savings proposals weren't counted, or 'scored' as savings by the CBO."

"There are also questions about how much goodwill PhRMA's deal bought among Democrats, many of whom would like to see the industry contribute even more toward reform's estimated $1-trillion price tag. Some Democrats, particularly in the House, have suggested using price controls and importation to rein in costs - ideas that are deal killers for drug makers" (Frates, 7/1).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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