President Obama unveils proposal for $950-billion healthcare overhaul

President Barack Obama on Monday unveiled proposed healthcare legislation that includes provisions designed to improve access to prescription drugs and increase generic drug availability. The plan, which is expected to cost $950 billion over 10 years and provide coverage to more than 31 million uninsured Americans, also includes an increase in the fees the pharmaceutical industry pays starting in 2011.

The plan includes a measure designed to close the Medicare "donut-hole" gap for prescription drug coverage, which leaves seniors paying the full cost of medicines during a certain stage of the programme due to coverage limits. Compared with the healthcare bill passed by the Senate in December, the president's proposal closes the gap entirely.

Regarding fees to be paid by the pharmaceutical industry, Obama proposes increasing them over 10 years by $10 billion above the $23-billion increase proposed under the Senate bill. Obama’s plan also delays implementation of these fees by one year to 2011. The administration gave details of the increase while explaining that proposed policies to expand health insurance coverage and to close the donut hole will result in new revenue for the pharmaceutical industry.

In addition, Obama's plan includes provisions designed to increase access to generic drugs by giving the Federal Trade Commission the authority to address the practice of "pay for delay" agreements between brand name and generic drug manufacturers. Specifically, the plan suggests prohibiting generic drug manufacturers from accepting "anything of value from a brand-name manufacturer that contains a provision in which the generic drug manufacturer agrees to limit or forgo research, development, marketing, manufacturing or sales of the generic drug." Such deals could only be reached if the parties "demonstrate by clear and convincing evidence that the pro-competitive benefits of the agreement outweigh the anti-competitive effects of the agreement."

The plan will be debated Thursday at a bipartisan healthcare summit.

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