Prometheus 6

“We are seeing large-scale negotiations with drug manufacturers, but they are conducted by private drug plans, not by the government,” Mr. Leavitt said. “A robust marketplace with a lot of competitors has driven down prices."

Your marketplace is what drove prices to this panic point.

Anyway... 

Administration Opposes Democrats’ Plan for Negotiating Medicare Drug Prices
By ROBERT PEAR

WASHINGTON, Nov. 12 — The Bush administration said on Sunday that it would strenuously oppose one of the Democrats’ top priorities for the new Congress: legislation authorizing the government to negotiate with drug companies to secure lower drug prices for Medicare beneficiaries.

In an interview, Michael O. Leavitt, the secretary of health and human services, said he saw no prospect of compromise on the issue.

“In politics,” Mr. Leavitt said, “most specific issues like this are a disguise for a larger difference. Government negotiation of drug prices does not work unless you have a program completely run by the government. Democrats say they want the government to negotiate prices. What they really want is government-run health care.”

Federal price negotiations would unravel the whole structure of the Medicare drug benefit, which relies on competing private plans, Mr. Leavitt said.

Dozens of plans are available in every state. They charge different premiums and co-payments and cover different drugs. The 2003 Medicare law explicitly prohibits the federal government from negotiating drug prices or establishing a list of preferred drugs.

Representative Nancy Pelosi, the California Democrat who is in line to become the House speaker, has said the House will take up legislation to repeal that ban in its first 100 hours under Democratic control. Senate Democrats have expressed a similar desire. The eight Democrats newly elected to the Senate all say Medicare should have the power to negotiate with drug makers.

“The government negotiates big discounts for the prices of drugs for our veterans,” said Senator-elect Amy Klobuchar of Minnesota. “But the drug companies got Congress to make it illegal to negotiate for lower prices under Medicare.”

Secretary Leavitt said he did not want the power to negotiate drug prices. “I don’t believe I can do a better job than an efficient market,” he said.

“We are seeing large-scale negotiations with drug manufacturers, but they are conducted by private drug plans, not by the government,” Mr. Leavitt said. “A robust marketplace with a lot of competitors has driven down prices. It’s the magic of the market. To assume that the government, in our genius, could improve on this belies the reality of a complex task.”