Deal reached on Medicare drug costs

WASHINGTON, June 20 (UPI) -- Drug makers and congressional leaders have agreed on a plan to reduce prescription drug costs for many U.S. seniors, President Barack Obama said Saturday.

"As part of the health reform legislation that I expect Congress to enact this year, pharmaceutical companies will extend discounts on prescription drugs to millions of seniors who currently are subjected to crushing out-of-pocket expenses when the yearly amounts they pay for medication fall within the 'doughnut hole,'" Obama said in a statement issued by the White House.

Seniors participating in the Medicare Part D program face a gap in prescription drug coverage, picking up the cost of prescriptions in excess of $2,700 but lower than $6,153.75 per year.

"The existence of this gap in coverage has been a continuing injustice that has placed a great burden on many seniors," Obama said.

The Pharmaceutical Research and Manufacturers of America issued a statement saying the agreement announced Saturday calls for pharmaceutical research and biotechnology companies to "provide a 50 percent discount to most beneficiaries on brand-name medicines covered by a patient's Part D plan when purchased in the coverage gap."

The statement said beneficiaries' total out-of-pocket spending would be lowered because the full negotiated price of covered medicine in the gap would count toward the beneficiary's out-of-pocket costs.

Obama said the United States is "at a turning point" in healthcare reform.

"Key sectors of the healthcare industry acknowledge what American families and businesses already know -- that the status quo is no longer sustainable," he said.

PhRMA President and Chief Executive Officer Billy Tauzin and Chairman David Brennan said every American "should have access to affordable, high-quality healthcare coverage and services."