Obama moves to cut US deficit would hit Medicare, Medicaid and Pharma

US President Barack Obama yesterday called on Congress to accept $4,000 billion in government spending cuts, unveiling his alternative to Republicans’ deficit-cutting plans, offered a mix of $3 in spending cuts for every $1 in tax increases over the next 12 years.

On the health care front, the President said he would cut $100 billion over 10 years from Medicaid, the state-federal health care program for the poor, by making it “more flexible, efficient and accountable,” as well as $200 billion out of Medicare, the program for the elderly, by challenging a new board to recommend savings. Pres Obama’s plan would seek savings for Medicare by increasing the power of the Independent Payment Advisory Board, which will almost certainly lead to health care rationing. The White House plan would also cut spending on prescription drugs in Medicare and Medicaid by speeding availability of certain generic drugs and better managing higher prescribers and users.

Not surprisingly the pharmaceutical industry is concerned the White House proposal opens the door for requiring the industry to extend to Medicare the same type of rebates it now gives Medicaid. One industry official estimated that could cost pharmaceutical makers tens of billions of dollars over a decade, reported the Wall Street Journal.