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NEW $1 TRILLION PRICE TAG MAY ADVANCE SENATE HEALTHCARE PLAN -- Senate Finance Committee Chairman Max Baucus said the cost of healthcare options being weighed by his panel can be cut to his goal of $1 trillion, potentially removing a major stumbling block to the legislation's passage. Baucus said last week that the estimate from the nonpartisan Congressional Budget Office means the plan wouldn't add to the federal deficit. The Montana Democrat and other panel members said a consensus is emerging on areas of the legislation they will write after this week's Independence Day recess. There are many "moving parts as we try to balance a lot of different factors," Baucus said. He pointed out that the CBO's estimate provided different options that lawmakers can use to stay within $1 trillion. Baucus said lawmakers are likely to include a proposal by President Barack Obama to curb Congress's role in cutting the Medicare system for the elderly and instead create a federal commission to make the decisions.

      On Friday, Health and Human Services Secretary Kathleen Sebelius said the Obama administration is open to the creation of insurance co-operatives as a way to compete with private insurers and hold down medical costs. The former Kansas governor, 61, made the comment in an e-mailed statement. Earlier, in an interview with Bloomberg News, she said she expects both houses of Congress to approve legislation overhauling the U.S. health system by August and send a final measure to the president by October. The Senate bill will have enough Republican votes to keep passage from being strictly along party lines, she said. President Obama is seeking broad bipartisan support. "I think there are five to 10 who may well be there for the final vote," she said. The Senate has 40 GOP members, and controversial legislation expanding benefits for children won by a vote of 66 to 32 in JanuaryÑa recent example of Obama's political clout. Sebelius issued the e-mailed statement after saying earlier that the administration supported a national insurance cooperative though they viewed similar state groups as too small to be effective.

FTC SAYS ENDING DRUG SETTLEMENTS MAY SAVE $35 BILLION -- Banning drugmakers from paying to delay the entry of generic competition may save American consumers $35 billion over 10 years, according to a study released last week by the U.S. Federal Trade Commission. The FTC is pushing congressional legislation that would ban so-called "pay for delay" deals in which brand-drug companies pay generic drugmakers to influence when copies of medicines would enter the market. U.S. courts have upheld such agreements as long as they don't delay the entry of the generic drug beyond the terms of patents held by the brand companies. FTC Chairman Jonathan Leibowitz said the settlements extend the period in which brand drugs have no competition and called it a "top priority" to end the practice. "If it's legal for a brand to pay the generic to sit it out, why wouldn't it?" he said at a conference at the Center for American Progress. "If a generic is allowed to make more money by not competing than by going to market, isn't that a good business deal for the company and its shareholders?" Leibowitz said ending pay-for-delay settlements would help President Barack Obama as he tries to overhaul the U.S. healthcare system by extending coverage to the 46 million people who lack health insurance while reining in costs. As a U.S. senator, Obama co-sponsored an earlier measure to ban the settlements, and as president he included a ban in his budget message.

      Both brand-drug and some generic-drug companies oppose any such legislation. The drugmakers said the agreements are pro-competitive because they provide certainty about when a copy will enter the market and ensure the generics are sold before the expiration of patents. The FTC estimated that the average price of a drug drops by 77% when generic versions are freely available. The study looked at the 150 settlements reached since 2004. About a quarter had both payments to the generic-drug companies and an agreement over the timing of entry. The study compared those agreements with the remaining two-thirds that didn't have those two factors. On average, the settlements with payments added about 17 months to the time before a generic entered the market, according to the FTC.

      But on the brighter side, Medarex Inc. (Nasdaq) rose 97 cents, or 13%, to $8.33, on a Mayo Clinic report that two prostate cancer patients became cancer-free after being treated with the company's experimental drug, ipilimumab, in combination with other therapies and surgery. On Friday, the Mayo Clinic said both patients experienced reduction in levels of a protein called PSA, or prostate specific antigen, and tumor shrinkage after receiving one dose of ipilimumab, which allowed them to be treated with surgery.

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