Pharmaceutical companies in the US have agreed to cut the cost of prescription drugs for the elderly in a landmark decision that will see the industry reduce its revenue intake by $80bn over the next ten years.
The Pharmaceutical Research and Manufacturers of America (PhRMA) has agreed a discount on the cost of medicines in Medicare's Part D prescription drug programme for some seniors by as much as 50%.
The discount would benefit seniors who reach a gap in their Medicare coverage once they have received drugs worth $2,700 and are then left to pay the full cost of their medication until that cost reaches $6,100.
US President Barack Obama has supported the agreement saying that it represents a "major step forward towards comprehensive healthcare reform".
"This gap in coverage has been placing a crushing burden on many older Americans. This agreement will make healthcare more affordable for millions of seniors and restore a measure of fairness to Medicare Part D," Obama said.
The agreement with PhRMA was negotiated with the White House and Senator Max Baucus, who is spearheading healthcare reform as chair of the Senate Finance Committee.