Obama touts new drug deal

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By Jennifer Haberkorn

President Obama touted a new deal Monday that he and Senate Democrats say will save seniors money on prescription drugs as the House begins public debate Tuesday on a health care reform bill.

The pharmaceutical industry agreed over the weekend to spend $80 billion over the next decade to close the Medicare Part D "doughnut hole" - the gap in coverage that patients face when their drug costs reach a certain amount.

The pledge has the potential to move the health care reform debate forward with a big industry player agreeing to a financial cut and a big lobby, AARP, getting one of its major legislative goals accomplished.

PhRMA, pharmaceutical lobby and trade group, framed the deal as a "momentum changer."

"I think the process that the president is moving forward, with negotiations with all those stakeholders involved, is making progress toward long-term reform," said White House press secretary Robert Gibbs.

The deal would close a loophole established in 2002 by President George W. Bush.

"This gap in coverage has [placed] a crushing burden on many older Americans who live on fixed incomes and can't afford thousands of dollars in out-of-pocket expenses," Mr. Obama said at the White House on Monday.

He said he expects the pledge to be included in a health care reform bill that "I expect Congress to enact this year."

Seniors who are enrolled in Medicare Part D pay for the first $295 of their prescription drug costs. After that, Medicare pays 75 percent of the drug bill until the tab reaches $2,700. But above that, patients are stuck with the entire tab again, until it reaches $4,350 per year.

About 3.4 million Americans are affected by the doughnut hole, according to the Kaiser Family Foundation.

The deal reached this weekend would give most patients within the doughnut hole a 50 percent discount on most brand-name drugs, according to PhRMA.

The news comes as the three House committees that released a joint draft bill Friday hold their first, separate hearings beginning Tuesday.

The committees are expected to move on the bill quickly, and the House bill is far more likely to be passed before the Senate version, said Len M. Nichols, director of the health policy program at the New America Foundation think tank.

"In 30 years I've never seen three committees work together like this," he said. "It sends a signal ... that life is different."

The Senate Health, Education, Labor and Pensions Committee returned to its mark up Monday to vote on amendments, many of which fell on party lines as partisanship took over.

Sen. Christopher J. Dodd, acting chairman of the committee, tried to keep debate on track, passing a handful of amendments regarding prevention measures.