Pharmaceutical Companies Cut Drug Prices By $80 Billion
Recently the White House, lawmakers, and the pharmaceutical industry established an agreement to cut Medicare drug costs by $80 billion over the next ten years. Although viewed as a “turning point” by the Obama Administration, there has been some criticism as President Obama throughout his campaign and recent term has vowed to dissociate from lobbyist influences.
However, over the years the spending on Medicaid and Medicare has grown to an exuberant amount in conjunction with a budget that already has a huge deficit. So how will such a cut in drug prices influence Medicare?
- Drug companies will cover up to 50% of the cost of name-brand drugs that are not covered by Medicare Part D.
- The gap in coverage includes uncovered medications costs of our nation’s senior citizens between $2,700 and $6,100 a year.
- It will promote affordable prices on prescription drugs when Medicare benefits are obsolete.
It will be interesting to observe whether this agreement between the drug companies and the White House will encourage private insurers to put forth more concrete guidelines on how they intend to make health insurance more affordable. They have stated that they are willing not to exclude coverage for pre-existing conditions, but that is about it. If they want to have more leverage in preventing the development of a public plan, they must be more assertive in their actions to cut costs.
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Tags: Medicare drug costs, obama health cost, prescription drug cost