June 22nd, 2009
12:31 PM ET
12 years ago

Obama praises agreement to cut drug costs for senior citizens

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/06/22/art.bodrugs0622.gi.jpg caption="Democratic Sens. Max Baucus, center, and Chris Dodd joined President Obama Monday at the White House when Obama announced a new agreement controlling some Medicare drug costs."]
WASHINGTON (CNN) - President Barack Obama strongly praised a decision by the nation's pharmaceutical industry to agree to a deal cutting drug costs for elderly Americans on Monday, calling it an example of the kind of compromise required for successful national health care reform.

The agreement discounts medications for Medicare beneficiaries currently facing high out-of-pocket expenses when their benefits reach a gap in coverage.

"Real health care reform ... will require these kinds of commitments," Obama said during an appearance at the White House.

"Today marks a major step forward, but it will only be meaningful if we complete the journey. ... We are going to get this done."

The nation's top drug manufacturers agreed over the weekend to at least a 50 percent discount for most beneficiaries for brand-name medicines purchased in the so-called "doughnut hole" gap in coverage, Obama noted.

The gap involves medication costs of senior citizens between roughly $2,700 and $6,100 a year that are not covered by the Medicare part D plan.

The deal is expected to amount to an $80 billion reduction in Medicare drug costs for senior citizens over the next 10 years, according to Senate Finance Committee Chairman Max Baucus, D-Montana, who helped negotiate the agreement.

Filed under: Health care • President Obama
soundoff (109 Responses)
  1. Shirley In California Now On The Fence Re Obama

    I agree this is a good thing.

    June 22, 2009 01:09 pm at 1:09 pm |
  2. 2012 please come soon

    Mark B'ham, Al: You did a great job in raising your son. If only others would take responsibility for their health care insurance, then we wouldn't have this problem of 48 million uninsured.

    I wonder how many of those 48 million are currently pregnant-knowing they can't afford their own insurance but willing to add to the public welfare lines.

    June 22, 2009 01:10 pm at 1:10 pm |
  3. Ceasar the Great

    Wouldnt it be better to direct Seniors to the generics. Now that would be good savings for seniors. But then the companies wouldnt be making the same amount of money. Of course, they could just work harder to find better solutions, but that makes too much sense.

    June 22, 2009 01:10 pm at 1:10 pm |
  4. Robin

    I'm all for taking care of children, vets, and the elderly.

    What I'm against is paying for a lazy, underachiever's healthcare.

    June 22, 2009 01:11 pm at 1:11 pm |
  5. Betty

    This is a great step forward for medicare recipients. Now let's get on with the rest of healthcare reform and get everyone covered.

    June 22, 2009 01:12 pm at 1:12 pm |
  6. the old sage

    working together for a better america, what an idea. way to go President Obama-lets also stop them from canceling policies like when someone gets cancer and they can find that person had a leg cramp 30 years ago so they cancel their policy when it is needed.

    June 22, 2009 01:13 pm at 1:13 pm |
  7. Joe

    Obama is a TOTAL loser, doesn't know what the truth is, 2012 he will be nothing but a bad memory, along with all his props, Pe"lose"i, B Frank, Dodd, Biden etc....., so long losers, and the crowd cheers.

    June 22, 2009 01:13 pm at 1:13 pm |
  8. the folly of the gop continues. . .

    @Ted: June 22nd, 2009 12:51 pm ET

    One has to wonder why the Bush administration signed into law the Medicare Part D with the 'donut hole' gap in the first place.

    Ever ask yourself why the huge influx of drug related commericals these past few years? Drug companies made a killing off what was supposed to help our seniors, and all the "savings" of the Medicare Part D Bush made law went to the drug companies profits.

    June 22, 2009 01:14 pm at 1:14 pm |
  9. Greg Stanforth

    This is good news for the prospect of improved healthcare in the US but we need to be skeptical. We need a "law" not promises from drug and insurance companies. Like the banks and Wall Street they see no farther than their own profit margin. But they fear one thing more than anything else – Nationalised Health Care or a "single payer system" – which they know they cannot compete with and which, in spite of their propaganda to the contrary, they know would be better for all Americans. So, although they know that change is coming, they will do, at first, token bits to postpone the inevitable. There will be more token attmepts like this but Americans will have to pressure thier representives to pass significant laws that will guarantee a good health care system. I am willing to pay in taxes what my employer and I now pay in profits to insurance and drug companies to a government agency that will be controlled by law not by the whims of the marketplace.

    June 22, 2009 01:14 pm at 1:14 pm |
  10. Mark,B'ham,Al.

    We know who will make up for the difference. The rest of America including the working class who have insurance, because the drug companies still need to make a profit to stay in business, just as Americans are paying to cover the rest of the socialist countries low drug cost.

    June 22, 2009 01:15 pm at 1:15 pm |
  11. Laura, Boston MA

    This is a step in the right direction. However, the $2700 gap starting point is still a little too high for most seniors I know.

    Wouldn't it be nice if we had the ability to import medicine from Canadian (providing it is FDA approved). I bet then you would see the $2700 become $1500. That would certainly make things even easier for our seniors.

    June 22, 2009 01:18 pm at 1:18 pm |
  12. Don

    This is NOT the change I voted for.

    June 22, 2009 01:19 pm at 1:19 pm |
  13. Bud L

    I just hope that this doesn't mean that drug prices for everyone else go up to make up the difference.

    June 22, 2009 01:19 pm at 1:19 pm |
  14. What?

    How does this deal reduce Medicare costs? When you are in the Bush engineered hole you pay out of your own pocket ($3,400).

    This is no saving, just a discount for seniors who may very well not purchase as much of the drugs as they need, thus leading to a fallin profits for the drug companies.

    June 22, 2009 01:20 pm at 1:20 pm |
  15. Terry from Texas

    Republican senior wrote: "No, no no, I don't want it!"

    Now it's nice to see a Conservative who is true to his principles: who refuses to accept one dime from Social Security or Medicare. All elderly Conservatives should follow the lead of this person. After all, why should MY tax money go to support him?

    June 22, 2009 01:20 pm at 1:20 pm |
  16. No Hillary = No Obama


    June 22, 2009 01:24 pm at 1:24 pm |
  17. Sarge in Florida

    This is not enough to help with the costs. I know for fact because when I reach that gap of $4,200, I don't have the money to pay for my prescriptions period. So i go the rest of the year not able to buy my meds. What about us people who are on a limited income? I guess they just want us to dry up and die so we won't be a burden to anyone.

    June 22, 2009 01:24 pm at 1:24 pm |
  18. Chuck, Tennessee

    I'm not a big Obama fan, but this is a great piece of work. This is the type of change that can make a difference in health care costs.

    June 22, 2009 01:26 pm at 1:26 pm |
  19. Sharon Kitchen

    With this ,,,,,maybe people will not have to choose between meds/food/cutting a needed pill in-two to go further........things like this. Just maybe .........those most in need.....may be able to survive a little longer.

    June 22, 2009 01:28 pm at 1:28 pm |
  20. Steph

    Thank you Mr. President! Keep moving forward.

    June 22, 2009 01:30 pm at 1:30 pm |
  21. Lance

    I take care of my mom's Medicare part D coverage and this WILL NOT change the amout the seniors have to pay. the "donut hole" is based on what the seniors actually pay for their medicine out of pocket. I know this because it is a strange fact is that when a senior has a policy that has a $250 deductible, this $250 is applied to the out of pocket expense in the donut hole, but a (typically $20/month) more costly policy without a deductible is not applied (the cost of the insurance is not included in the donut hole).

    Unless congress changes the law for Medicare part D, this will just mean that seniors will need to buy 2X more meds (at 50% discount) before they reach the end of their donut hole

    LET's GO Congress (and the news media to report what this REALLY means!

    June 22, 2009 01:32 pm at 1:32 pm |
  22. David

    Great Job Mr President.

    June 22, 2009 01:33 pm at 1:33 pm |
  23. worriedmom

    AARP struck the deal, not the Prez. He was just there for the photo OP.
    I think the drug companies, insurance companies are going to do many things to please the public just so Obama and his thug gang wont have control over their industry.
    I guess we will have to hear the Great Mr. Gibbs say "WE WON"
    Wonder if he will be saying that when N. Korea is threateing us, Al Queda and who knows who else that has realize that Obama is weak.
    by the way why isnt CNN showign the latest Rasmussen poll where your GREAT LEADER is dropping in points. Guess you better go mix some more Kool-Aid and take your Valium, all you Libs.

    June 22, 2009 01:35 pm at 1:35 pm |
  24. Susan, Macedon New York

    And they're doing this out of the goodness of their tiny little hearts! Sure they are!

    Would we be seeing any effort to cut costs if they weren't so afraid of Obama's public option for health care? I don't understand what the problem is with this. If you don't want the public option (i.e., socialism or just plain common sense!) then go ahead and pay a lot more for your health insurance. Morons!

    June 22, 2009 01:36 pm at 1:36 pm |
  25. lance

    And Hey Max Baucaus:
    As you well know, the donut hole is $3800 out of pocket. this just means the seniors will be able to buy 2X the amount of medicine before they reach $6100 in expenses, (2700 for their insurance payments and 3400 for them? how about lowering that to 1700 for the donut hole! Or do you think seniors should spend more on generics out of pocket???

    June 22, 2009 01:37 pm at 1:37 pm |
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