MR. CUTHBERT: We go to Denver, Colorado, next, and Sarah, another doughnut hole question. Go ahead, Sarah.
Q Hi, this is my first year in the doughnut hole, and it’s quite a frightening thing to go through. I have Parkison’s so I will be going through it year after year, and it looks like I could last about two years, and then all of my savings will be gone to the doughnut hole. So what do you intend to replace the doughnut hole with?
THE PRESIDENT: Well, we want to replace it with prescription drugs that won’t force you to use up all your retirement.
When the original Medicare Part D was put forward — first of all, it wasn’t paid for, so it automatically was unstable financially. Then there was an agreement that you couldn’t negotiate with the drug companies for the cheapest available price on drugs. The American people pay about 77 percent more for drugs than any other country — 77 percent. Almost twice as much as other countries do.
So what we’ve said is, as part of reform, let’s negotiate with the pharmaceutical companies; we’ll cover more people — that means potentially the pharmaceuticals will have more coverage — or more customers — but as part of the deal, they’ve got to start providing much better discounts on their drugs. They’ve already committed that if the health care reforms pass, they would provide $80 billion worth of discounts. That would be enough to cover about half of the doughnut hole.
So, right off the bat, right now, without further negotiations, the drug companies have already committed that they would reduce — they would cut in half the costs that folks have to go through when they’re in the doughnut hole right now. That’s money directly in their pocket that could be in their retirement savings.
I think we can get potentially an even better deal than that, because we’re overpaying 77 percent.
But the problem is if we don’t get health care reform, the pharmaceutical industry is going to fight for every dime of profits that they’re currently making — and filling that doughnut hole is going to be very expensive because when the Medicare Part D was originally passed nobody put in provisions to pay for — and so putting even more money into it at a time when Medicare may go bankrupt — not “go bankrupt,” but go into the red 10 years from now, that’s a big problem. That’s part of the reason why reform is so important.
And I think for AARP members especially there are hundreds of thousands of people out there who would directly benefit from reduced prescription drug costs if we’re able to pass this bill.
MR. CUTHBERT: As you know, you may have heard, the cost of the program is a concern. Jane here in our audience has a question about that, from Alexandria, Virginia. Jane.
Q Hello, Mr. President. My question is some concern we have about the possibility of a cost containment commission. If you could comment on that.