From a "Face the Nation" interview Sunday with Health and Human Services Secretary Donna Shalala:
Bob Schieffer: [T]here's a plan floating around in the Congress right now that does have some support, which basically . . . would force drug manufacturers to sell drugs to Medicare recipients, individuals, at the same price, the cut-rate price they sell them to HMOs in bulk. Would the administration favor that?
Donna Shalala: Well, I -- I don't think we're supporting that legislation. Let me say something about the pharmaceutical industry and this particular proposal. First, we need a healthy pharmaceutical industry. The reason we're talking about a pharmaceutical benefit is because that industry, combined with the investments in the National Institutes of Health [and] the streamlining of the FDA process, has, in fact, had breakthroughs that allow us to substitute drugs for other kinds of health care -- for surgeries, for other kinds of procedures. We need a healthy industry. We need them to continue to invest in research and development. There's no government substitute for that.
So the way in which this ought to be managed, we believe, is through the private sector. Will they negotiate discounts? My guess is that they will, but they ought to be fair to the industry itself as well as to the beneficiaries, because we can't afford to undermine a very important industry.