Barack Obama's bid to provide medical insurance for all Americans has received a huge boost after a coalition of healthcare providers, including the pharmaceutical industry, offered to cut $2 trillion in projected spending over 10 years to help fund the US president’s programme.

The coalition of drugmakers, hospitals, insurance companies, unions and doctors have pledged to slow projected spending growth by 1.5% a year over the next decade, lowering medical costs by at least the aforementioned $2 trillion figure. The move should free up an average of $2,500 annually for a family of four within five years.

Announcing the deal, President Obama spoke of an “extraordinarily productive meeting” with the coalition which recognises “one clear, indisputable fact – when it comes to healthcare spending, we are on an unsustainable course that threatens the financial stability of families, businesses and government itself”. He added that “at the rate we're going, we are expected to spend one-fifth of our economy on health care within a decade. And yet we're getting less for our money”.

The president noted that “we're spending more on health care than any other nation on Earth”, yet nearly 46 million Americans don't have any insurance at all. He went on to say that “for decades, we've talked about reducing costs, improving care, and providing coverage to uninsured Americans…but all too often, efforts at reform have fallen victim to special interest lobbying [and] political point-scoring”.

President Obama concluded by saying that this is “a historic day, a watershed event in the long and elusive quest for health care reform”.

Billy Tauzin, chief executive of the Pharmaceutical Research and Manufacturers of America, which is part of the coalition, said that the association "appreciates that all healthcare stakeholders will need to make changes that help lower the growth of overall health costs." He also noted that the coalition “also recognises the importance of encouraging medical innovation as a key element in both improving patient health and reducing the growth of overall health costs”.

Mr Tauzin added that “preserving policies that foster innovation – both technological innovation and innovative approaches to service delivery – is critical as we work to improve our healthcare system”.