Health care issues: Proposed drug industry savings

Health care issues: Proposed drug industry savings

A look at key issues in the health care debate:

THE ISSUE: Is the pharmaceutical industry’s agreement to lower drug costs by $80 billion over the next decade fair?

THE POLITICS: The industry’s trade group, the Pharmaceutical Research and Manufacturers of America, agreed to contribute those savings to help pay for Democrats’ proposed $1 trillion health care overhaul. That deal was struck with the White House and the chairman of the Senate Finance Committee, Democrat Max Baucus of Montana. Top House Democrats, preferring a more aggressive revamping, say they weren’t a party to that pact and want deeper savings from drugmakers, who until recently tilted their campaign contributions heavily toward Republicans.

WHAT IT MEANS: The trade group says roughly $30 billion would be used to halve prescription drug prices for older people stuck in the “doughnut hole,” a gap in coverage in Medicare’s Part D drug program. The rest would be a mix between increasing rebates the industry gives for government drug purchases under the Medicaid program for low-income people, and fees drugmakers would pay to help finance the health overhaul. Critics suggest the agreement also promises protection for high-technology biological drugs from generic competitors, but the industry says that is not so.

— Alan Fram