White House Drug Deal May be in Trouble

  • Share
  • Read Later

There was one more piece of important news from Tuesday’s Senate Finance Committee markup of its health reform bill. As the committee was wrapping up – and after some senators had left for the evening – things got heated over a deal the White House reached earlier this year with drug companies. The deal stipulated that pharmaceutical companies would cut name-brand drug prices by 50% for seniors stuck in the doughnut hole, a gap in prescription drug coverage for some Medicare beneficiaries. In exchange for the deep discounts, drug companies were told they would not see any more cuts for their industry. (The gap exists once medication costs exceed $2,700 (in 2009) and coverage doesn’t kick back in until these seniors spend $4,350 out of their own pocket.)

What’s important about the fight that erupted over the deal, as explained thoroughly here in the New York Times by David Herszenhorn and Robert Pear, is that it was mostly between Democrats and could jeopardize the White House deal with drug companies. The drug discounts the industry offered would have cost pharmaceutical companies some $80 billion over ten years – plus, the industry promised to help Democrats sell reform to the American public, partly through expensive advertising. If this deal falls apart, it could dramatically change the public health care debate and bruise President Obama in the process.

Senators will pick up the issue again when they return on Wednesday.

0 comments