WASHINGTON — U.S. drug makers agreed Saturday to shell out $80 billion over the next 10 years to lower the cost of medication for seniors and help pay for President Obama's proposed healthcare overhaul, 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 often must pay staggering drug costs not covered by their Medicare plan, according to a White House announcement.
The drug makers also have agreed to pick up some of the costs of the president's plan to remake the nation's healthcare system, legislation he hopes Congress will pass 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 Saturday afternoon.
The decision by pharmaceutical companies to join the healthcare overhaul plan was a political one: Strategists concluded that government action was likely, and the companies might fare better at the table than on the sidelines.
The deal marks a small breakthrough for key lawmakers who have been pushing for a healthcare overhaul, and comes at a time when the administration needs to build momentum for its initiative. The announcement capped a challenging week for the president's cause, one in which an independent analysis by the Congressional Budget Office called into question the cost and effectiveness of two versions of a healthcare overhaul being considered in the Senate.
On Friday, senior House Democrats unveiled their reform plans, but put wind in critics' sails by offering few clues as to how they would pay for it. The cost was expected to exceed $1 trillion.
But administration officials see the deal between the pharmaceutical companies and Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, as a major step forward.
"We are at a turning point in America's journey toward healthcare reform," Obama said Saturday. "Key sectors of the healthcare industry acknowledge what American families and businesses already know -- that the status quo is no longer sustainable."
House leaders hope to pass legislation before their August vacation, and the White House is aiming for signing a bill into law in October.
Officials of the Pharmaceutical Research and Manufacturers of America said Saturday that they hoped to help make that happen.
"PhRMA is committed to working with the administration and Congress to help enact comprehensive healthcare reform this year," said W. J. "Billy" Tauzin, president and chief executive of PhRMA and a former congressman from Louisiana.
"We share a common goal: Every American should have access to affordable, high-quality healthcare coverage and services."