Deals On Health Reform In Jeopardy As Support From Drugmakers, Senior Groups Is Tested

The pharmaceutical industry's support for a health care reform bill in the Senate is in jeopardy as Senate Democrats ponder squeezing more cost savings out of drug makers to help pay for the overhaul, The Associated Press reports.

"By many accounts, the health package the House approved last month would count on getting about $140 billion from drug companies to defray additional health care costs over the next decade. Industry officials say the version the Senate is debating may already pluck close to $100 billion from drugmakers — and an expected parade of amendments could boost that by billions more." A deal struck by the industry with the White House initially had the pharmaceutical industry giving $80 billion.

As senators mull cost savings, generic competition and a "paucity of new drugs" may normalize the growth rate of sale of pharmaceuticals in the next few years, The Associated Press reports. The industry sells about $320 billion worth of drugs per year now. Pharmaceutical Research and Manufacturers of America officials say they are still committed to helping pass health reform this year, however (Fram, 12/7). 

The Washington Post reports that "Senate Democratic leaders are struggling to preserve the fragile support of interest groups for an overhaul of the nation's health-care system" and that senators discussed levying additional cost-saving measures at closed-door meetings Saturday on "hospitals, doctors and drug companies, squeezing out savings beyond the considerable sums those groups had already volunteered to give up."

Senior groups are worried about a proposed Medicare board that would look for additional cost savings in that program and hospitals are concerned over a proposal by Sens. Joe Lieberman, I-Conn., Arlen Specter, D-Pa., and Susan Collins, R-Maine, to impose penalties on hospitals with high infection rates. "Another pending amendment causing heartburn for Reid is a proposal by Sen. Byron L. Dorgan (D-N.D.) that would permit U.S. pharmacies and drug wholesalers to import lower-priced medications from other countries, including Canada." Another hit for the drug industry would occur "under an amendment by Sen. Bill Nelson (D-Fla.) that would transfer about 6 million seniors eligible for Medicare into the Medicaid program, which pays much lower prices for the same drugs." Half of the $106 billion in savings that amendment would seek would be used to close the Medicare prescription drug "doughnut hole" (Montgomery and Murray, 12/6).

This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from major news organizations. The full summary of the day's news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.