President Barack Obama’s deficit- trimming proposal would cut $320 billion from U.S. health programs in prescription drug and nursing home spending and by increasing individuals’ payments for Medicare coverage. The biggest cut is a $135 billion reduction in drug prices the government pays companies led by New York-based Pfizer Inc. and Whitehouse Station, New Jersey-based Merck & Co. for enrollees in both Medicare, the federal health program for the elderly and disabled, and Medicaid, the U.S.-state program for the poor. The White House released the proposals today.
“We will reform Medicare and Medicaid, but we will not abandon the fundamental commitment that this country has kept for generations,” Obama said in a speech at the White House. In total, $248 billion of the savings would come from Medicare, with another $72 billion from Medicaid.
http://www.businessweek.com/news/2011-09-19/obama-s-320-billion-in-health-cuts-targets-u-s-drug-purchases.html