Obama, AARP announce agreement to cut prescription drug costs

On Monday, President Barack Obama joined with AARP chief Barry Rand to announce "an agreement among pharmaceutical companies to cut prescription drug costs for seniors - and inject some energy into his efforts at comprehensive health care reform," Politico reports. Obama said the companies' goal is to "to reduce the punishing inflation in health care while improving patient care."

Americans will see "brand-name drug costs cut in half," Rand said in opening remarks. He also gave a "significant endorsement to Obama's plan for health care reform," and said that he would work with the president to get a bill on his desk by the end of the year (Lee, 6/22).

 CBS Political Hotsheet: "In the deal, the Pharmaceutical Research and Manufacturers of America (PhRMA) has agreed to reduce its draw of revenues by $80 billion over 10 years by discounting the cost of medicines in Medicare's Part D prescription drug program for some seniors by as much as 50 percent. The discount would go to seniors who fall into the 'doughnut hole' - a gap in Medicare Part D coverage. Currently, once seniors have received $2,700 worth of drugs, they are left to pay the full cost of their medication until that cost reaches $6,100."

Obama said, "it's only fair" that pharmaceutical companies do their part to reduce costs because they stand to gain millions of more customers through reform efforts (Condon, 6/22).

"The president used the opportunity to make his sternest call yet for action, saying the drug agreement is one piece of 'health care reform I expect Congress to enact this year,'" the Associated Press reports (Loven, 6/22).

Dow Jones reports: "It's unclear, however, how much of the expected $80 billion in savings over 10 years will go toward paying for the proposed health-care overhaul" (Pilizzi, 6/22).