WASHINGTON -- Drugmakers agreed Saturday to shell out $80 billion over the next 10 years to lower drug costs for seniors and help pay for President Barack Obama's proposed health carereform, 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 pay thousands of dollars for drug costs not covered by their Medicare plans, according to an announcement by the White House.
The drugmakers also have agreed to pick up some of the costs of the president's health care reform legislation, which he hopes will be passed by Congress 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 announcing the agreement.
The deal marks a small breakthrough for key lawmakers pressing for health care reform at a time when the administration needs to build momentum for its initiative.
Its announcement caps a challenging week for their cause, one in which an independent analysis by the Congressional Budget Office called into question the cost and effectiveness of two versions of the Senate's draft reform legislation.
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 is expected to exceed $1 trillion.
But administration officials see the deal worked out between the pharmaceutical companies and Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, as a major step forward -- and a harbinger of more cooperation to come.
"We are at a turning point in America's journey toward health care reform," Obama said Saturday. "Key sectors of the health care 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 gunning for a signing date in October.
Officials of the group Pharmaceutical Research and Manufacturers of America said Saturday they hope to help make that happen.
The group "is committed to working with the administration and Congress to help enact comprehensive health care reform this year," said Billy Tauzin, its president and chief executive officer.
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