US President Barack Obama has announced new plans to save a further $313 billion for health care reform over the next 10 years, including $75 billion cuts in the prices paid by Medicare for prescription drugs.

The proposed new savings - which come on top of the $635 billion “down payment” on health reform which Pres Obama detailed in his February budget – will also include an estimated $106 billion to be saved from reduced hospital subsidies for treating the uninsured, as coverage increases.

Announcing the new proposals in his weekly Radio Address on Saturday (June 13), the President said these savings would come from “commonsense changes. For example…if the drug makers pay their fair share, we can cut government spending on prescription drugs. And if doctors have incentives to provide the best care instead of more care, we can help Americans avoid the unnecessary hospital stays, treatments and tests that drive up costs.”

A statement from the White House giving more details about the proposals emphasises that the President is committed to undertaking health reform “that is completely paid for and deficit-neutral over the next decade.”

“In its meeting with the President and subsequent communication, the pharmaceutical industry has committed itself to helping to control the rate of growth in health care spending. There are a variety of ways to achieve this goal. For example, drug reimbursement could be reduced for beneficiaries dually eligible for Medicare and Medicaid. The Administration is working with the Congress to develop the most appropriate policy to achieve these savings,” the statement adds.

Peter Orszag, director of the White House Office of Management and Budget, added that these “real, scoreable proposals put us squarely in the ballpark for funding a comprehensive reform in a deficit-neutral way - a priority of the President. Over the coming weeks, we’ll work with Congress to make sure that every dollar is paid for,” he said.

Commenting on the new plans, Billy Tauzin, chief executive of the Pharmaceutical Research and Manufacturers of America (PhRMA), emphasized the industry’s commitment to reform.

“A lot of work remains to be done, but we will continue to share ideas and seek solutions with the relevant committees in Congress, as well as the White House, in hopes that our shared vision for a reformed healthcare system becomes a reality this year,” said Mr Tauzin.