My sources tell me the prime movers of this deal were Abbott, Pfizer, Merck, Amgen, and AstraZeneca.
Here's the story, courtesy of Politico:
Drug firms reach $80 billion deal

Giving a boost to health legislation after a bruising week, pharmaceutical companies have offered Congress and the White House an $80 billion commitment over 10 years to help pay for comprehensive reform, negotiators told POLITICO on Saturday. 

The promised savings from the industry are to be written into the new law, making them binding. The deal is to be announced soon by President Barack Obama or the Senate Finance Committee. 

Obama was relying on drug-makers to help finance his $1 trillion health care overhaul.
The deal provides a lift to the administration’s efforts to regain momentum in the debate after a tough week in which congressional budget analysts returned eye-popping cost estimates on proposed bills, and even some Democrats dug in their heels against the high costs. 

“You’ve got your first passengers on the train and now you can start moving forward down the track,” said an industry source close to the negotiations. 

The offer was approved on a conference call Friday afternoon by the governance committee of the Pharmaceutical Research and Manufacturers of America, which represents top drug and biotechnology companies. 


Afterward, PhRMA President and CEO Billy Tauzin called Senate Finance Committee Chairman Max Baucus (D-Mont.). The White House was then notified. PhRMA’s board had discussed the parameters of the deal during a board meeting in Washington on Thursday. 

House and Senate Democrats have increasingly raised the idea of using the health-care bill as a vehicle to begin narrowing the so-called "doughnut hole" — a coverage gap in the Medicare Part D plan that forces seniors to pay out of pocket for some of their drugs, above a certain cost. 

Three senators called on Baucus this week to address this gap in the Senate reform package, and House committee chairmen agreed Friday to deal with it in their legislation. 

Under the deal, a senior who makes $80,000 to $85,000 will effectively have their out-of-pocket costs cut in half, an industry official said.


The two main prongs of the agreement among PhRMA, congressional leaders and the White House: 

— Drug companies will provide a 50 percent discount to most beneficiaries on brand-name medicines covered by a patient’s Part D plan when purchased in the coverage gap. 

—The entire negotiated price of the Part D covered medicine purchased in the coverage gap would count toward the beneficiary’s out-of-pocket costs. That would lower the beneficiary’s total out-of-pocket spending. The proposal would not require any additional paperwork on the part of the beneficiary nor would an asset test be used for eligibility. 

Most plans in the Medicare drug program, which began in 2006, included a gap in coverage. The cost of drugs are covered until the beneficiary and the government had spent $2,250. At that point, individuals have to pay 100 percent of the costs until reaching $5,100 for the year, and then the government coverage kicks in again. That gap between $2,250 and $5,100 is often referred to as "the doughnut hole." 


The agreement couldn’t come at a better time for Obama and Baucus. It blunts charges that Democrats aren't concerned about the cost of the overhaul. And with this deal, they are showing that the industry remains at the table, and willing to deal. This could put pressure on other industries to deal as well. 

PhRMA has been negotiating the deal for months with Baucus and his staff, and with Nancy-Ann DeParle, director of the White House Office of Health Reform.
“This is a huge amount of money,” said an industry official. “Our CEOs tossed and turned in their beds for a long time before signing off on this. It’s going to provide a significant amount of money toward achieving health-care reform.” 

The official added: “We recognize that there has to be a shared sacrifice if we’re going to extend health-care coverage to everybody in America.” 

Obama hinted at the negotiations in his radio and Web address last week, when he outlined about $75 billion in savings that could come from lower payments for prescription drugs – money that could be used to pay for his $1 trillion health care overhaul. White House budget director Peter Orszag told reporters at the time that the administration was “in discussions with stakeholders over the best way of achieving that $75 billion.” 


But even the $80 billion is just one part of a massive health-reform tab that the Congressional Budget Office said this week is likely to cost more than $1 trillion – a number that many Republicans and even some Democrats say is too much. Obama has announced a package of tax increases, cuts in hospital and other reimbursements and other savings that he says add up to $950 billion to pay for a health overhaul, but Congress has balked at some of his proposals and it’s not yet clear if others would achieve all the savings he hopes.
Here's the story, courtesy of Politico:
Drug firms reach $80 billion deal

By: Carrie Budoff Brown and Mike Allen 

Giving a boost to health legislation after a bruising week, pharmaceutical companies have offered Congress and the White House an $80 billion commitment over 10 years to help pay for comprehensive reform, negotiators told POLITICO on Saturday. 

The promised savings from the industry are to be written into the new law, making them binding. The deal is to be announced soon by President Barack Obama or the Senate Finance Committee. 

Obama was relying on drug-makers to help finance his $1 trillion health care overhaul. The deal provides a lift to the administration’s efforts to regain momentum in the debate after a tough week in which congressional budget analysts returned eye-popping cost estimates on proposed bills, and even some Democrats dug in their heels against the high costs. 

“You’ve got your first passengers on the train and now you can start moving forward down the track,” said an industry source close to the negotiations. 

The offer was approved on a conference call Friday afternoon by the governance committee of the Pharmaceutical Research and Manufacturers of America, which represents top drug and biotechnology companies. 


Afterward, PhRMA President and CEO Billy Tauzin called Senate Finance Committee Chairman Max Baucus (D-Mont.). The White House was then notified. PhRMA’s board had discussed the parameters of the deal during a board meeting in Washington on Thursday. 

House and Senate Democrats have increasingly raised the idea of using the health-care bill as a vehicle to begin narrowing the so-called "doughnut hole" — a coverage gap in the Medicare Part D plan that forces seniors to pay out of pocket for some of their drugs, above a certain cost. 

Three senators called on Baucus this week to address this gap in the Senate reform package, and House committee chairmen agreed Friday to deal with it in their legislation. 

Under the deal, a senior who makes $80,000 to $85,000 will effectively have their out-of-pocket costs cut in half, an industry official said.


The two main prongs of the agreement among PhRMA, congressional leaders and the White House: 

— Drug companies will provide a 50 percent discount to most beneficiaries on brand-name medicines covered by a patient’s Part D plan when purchased in the coverage gap. 

—The entire negotiated price of the Part D covered medicine purchased in the coverage gap would count toward the beneficiary’s out-of-pocket costs. That would lower the beneficiary’s total out-of-pocket spending. The proposal would not require any additional paperwork on the part of the beneficiary nor would an asset test be used for eligibility. 

Most plans in the Medicare drug program, which began in 2006, included a gap in coverage. The cost of drugs are covered until the beneficiary and the government had spent $2,250. At that point, individuals have to pay 100 percent of the costs until reaching $5,100 for the year, and then the government coverage kicks in again. That gap between $2,250 and $5,100 is often referred to as "the doughnut hole." 


The agreement couldn’t come at a better time for Obama and Baucus. It blunts charges that Democrats aren't concerned about the cost of the overhaul. And with this deal, they are showing that the industry remains at the table, and willing to deal. This could put pressure on other industries to deal as well. 

PhRMA has been negotiating the deal for months with Baucus and his staff, and with Nancy-Ann DeParle, director of the White House Office of Health Reform.
“This is a huge amount of money,” said an industry official. “Our CEOs tossed and turned in their beds for a long time before signing off on this. It’s going to provide a significant amount of money toward achieving health-care reform.” 

The official added: “We recognize that there has to be a shared sacrifice if we’re going to extend health-care coverage to everybody in America.” 

Obama hinted at the negotiations in his radio and Web address last week, when he outlined about $75 billion in savings that could come from lower payments for prescription drugs – money that could be used to pay for his $1 trillion health care overhaul. White House budget director Peter Orszag told reporters at the time that the administration was “in discussions with stakeholders over the best way of achieving that $75 billion.” 


But even the $80 billion is just one part of a massive health-reform tab that the Congressional Budget Office said this week is likely to cost more than $1 trillion – a number that many Republicans and even some Democrats say is too much. Obama has announced a package of tax increases, cuts in hospital and other reimbursements and other savings that he says add up to $950 billion to pay for a health overhaul, but Congress has balked at some of his proposals and it’s not yet clear if others would achieve all the savings he hopes.
