Obama’s budget achieves a fair amount of costs savings by shortening the exclusivity period for drugs and ending payments from big pharma to generic drug manufacturers not to manufacture their drugs:

Big pharmaceutical companies could face increased competition from generic drugmakers under two proposals put forth by the Obama administration on Monday despite earlier savings extracted from drugmakers as part of last year’s healthcare law.

President Barack Obama, as part of his 2012 budget proposal, called for cutting the number of years drugmakers could exclusively market brand-name biologic drugs to 7 years from 12.

He also set his sights on ending controversial “pay-for-delay” deals that affect traditional, chemical drugs by giving the U.S. Federal Trade Commission power to block them. Under such pacts, brand-name and generic drugmakers settle patent challenges with payoffs that delay lower-cost rivals from reaching the market.

I’d feel a little bit better about this if he also wasn’t cutting home heating aid to the poor in the same budget though.