Drugmakers have attacked US President Barack Obama's proposed FY 2014 budget, which would require them to pay increased Medicare drug rebates and ban "pay for delay" deals between brand-name and generics firms.
The $3.8 trillion budget calls for drugmakers to contribute $169 billion toward healthcare spending cuts over 10 years. $123 billion of this would come from requiring them to provide the same rebates to low-income seniors enrolled in Medicare as they do for beneficiaries of Medicaid, the state/federal health programme for the poor, which generally pays considerably less for brand-name drugs than Medicare.
Pres Obama is also seeking to close the Medicare Part D (prescription drug programme) coverage gap, known as the "doughnut hole," by 2015, instead of 2020 as originally planned, saving an estimated $11 billion over the next decade through a mandatory increase on discounts for brand-name drugs supplied through the programme from 50% to 75%, starting in 2015.
The White House also wants wealthier Medicare beneficiaries to pay higher premiums for their Part D and Part B ("medically necessary" and preventive health) services, starting in 2017, saving an estimated $50 billion over 10 years, and to encourage greater use of generics by increasing enrollees' co-pays for branded drugs and cutting those for generics, saving an estimated $7 billion.
The budget would also ban "pay for delay" agreements and reduce market exclusivity for biologic drugs to speed the development and market entry of biosmilars, saving more than $14 billion over the decade.
Healthcare spending accounts for 25% of total federal expenditures, and in his budget speech, the President said Democrats and Republicans agree that "the rising cost of care for an ageing generations is the single biggest driver of our long-term benefits."
"The reforms I'm proposing will strengthen Medicare for future generations without undermining that ironclad guarantee that Medicare represents," he said.