By Sam Youngman - 06/20/09 09:20 PM EDT
The plan was a bit of good news for Obama on the healthcare front after a tough week.
"The agreement reached today to lower prescription drug costs for seniors will be an important part of the legislation I expect to sign into law in October," Obama said in a statement Saturday evening.
The agreement reached by Democrats and the drug companies helps close what is known as the "doughnut hole" facing seniors. The doughnut hole is the area that falls between the less than $2,700 and the more than $5,100 Medicare will pay for seniors' prescription drugs. Anything in between, seniors pay themselves.
Obama said the deal goes a long way toward ending those "crushing out-of-pocket expense when the yearly amounts they pay for medication fall within the doughnut hole."
"The existence of this gap in coverage has been a continuing injustice that has placed a great burden on many seniors," Obama said. "This deal will provide significant relief from that burden for millions of American seniors."
The Congressional Budget Office (CBO) dealt Obama a major setback and loaded Republican critics with ammunition this week when it scored the proposals in both the House and Senate at costs of more than $1 trillion and still not ensuring coverage for all. This deal could go a long way toward helping the administration find allies in the middle wary of the costs but fearful of inaction.
Obama called the deal a "tangible example of the type of reform that will lower costs while assuring quality healthcare for every American."
"The agreement by pharmaceutical companies to contribute to the health reform effort comes on the heels of the landmark pledge many health industry leaders made to me last month, when they offered to do their part to reduce health spending $2 trillion over the next decade," the president said.