Drug Companies May Narrow Medicare Coverage Gap

DAVID ESPO

WASHINGTON (AP) — The pharmaceutical industry would finance improved coverage under the Medicare prescription drug program and help defray the cost of President Barack Obama's health care legislation under an $80 billion deal with key lawmakers and the White House that officials said Friday night was close to agreement.

These officials said the 10-year proposal under discussion would have drug firms pay as much as half of the cost of brand-name drugs for lower and middle-income seniors in the so-called "doughnut hole."

Medicare patients with incomes up to about $80,000 would realize some benefit. The term "doughnut hole" refers to a feature of the current drug program that requires beneficiaries to pay the entire cost of prescriptions after initial coverage is exhausted but before catastrophic coverage begins.

Additionally, officials said any agreement would reduce anticipated payments for the pharmaceutical industry under government-run health programs such as Medicare and Medicaid. The government would use those savings to help pay for legislation expanding health insurance to millions who now lack it.

One official close to the talks said agreement had been reached, but there was no immediate confirmation. All officials spoke on condition of anonymity to discuss private negotiations.