AARP wins round with Big Pharma, Wall Street Journal says — MedCity Morning Read, June 23, 2009

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WASHINGTON, D.C. — AARP, the association that represents the interests of people who are 55 years old and older, won a round with Big Pharma over the weekend, according to the Wall Street Journal Health blog.

President Obama announced Monday that the drug industry promised to offer 50-percent discounts to Medicare recipients who fall into the notorious “doughnut hole” of paying 100 percent of their drug costs after reaching $2,700 in benefits.

The AARP has pushed to closed the doughnut hole since Congress added the Medicare prescription drug benefit in 2003. But the association’s talk with the drug industry went nowhere, probably because the industry focused on low-income seniors while the association wanted change for all Medicare recipients, John Rother, AARP’s executive vice president for policy, told the Journal.

That conversation changed last month after drug makers said they would reduce health spending as part of the nation’s health care reform effort. Industry officials began meeting with Sen. Max Baucus and White House officials, the Journal said. Baucus chairs the Senate Finance Committee, which is at the forefront of crafting health overhaul legislation.

Apparently, the deal was sealed when Billy Tauzin, head of the industry group PhRMA, called Baucus at 6 p.m. on Friday, the Journal said. President Obama announced the deal Monday with the drug industry promising to spend $80 billion to reduce drug costs.

The agreement applies to brand-name drugs and biologics — the most expensive medications — and likely will be included in health reform legislation this fall.

The AARP called the Monday announcement a surprise in its bulletin to members. In a statement, the association thanked President Obama and Sen. Baucus for helping to close the doughnut hole — between $2,700 and $4,350 of Medicare recipients’ drug costs. AARP also committed to continue its fight to completely plug the hole.

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Mary Vanac

By Mary Vanac

Mary Vanac is a co-founder of MedCity News.
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