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Executive Summary

HHS Secretary-designate Donna Shalala, PhD, has become familiar with the strategic plans being developed for the future of the National Institutes of Health during her 20-month tenure as a member of the NIH Advisory Committee to Director Bernadine Healy, MD. President-elect Clinton announced his selection of the University of Wisconsin-Madison chancellor in Little Rock on Dec. 11. At the quarterly meetings of the NIH advisory committee, Shalala has been exposed to a broad range of topics at the top of the NIH agenda. In addition to the developing NIH strategic plan, Shalala has had briefings on the implementation of NIH's financial management plan; an assessment of possible reform to the agency's peer review system; and the debate over indirect costs at research universities. The strategic plan has been in the works at NIH since early 1991. The project was undertaken to outline long-range scientific priorities at NIH and discuss grant procedures. At the NIH committee's most recent meeting on Dec. 2, Shalala received an introduction to the Washington debate on drug pricing. The advisory committee devoted most of its agenda to discussing NIH's role in the pricing of drugs and other medical technologies developed under cooperative agreements with NIH. As background for that discussion, the committee heard several more general discussions of the factors that go into setting drug prices and a critique of drug R&D cost accounting. Shalala's primary experience, interests and the qualities that recommend her for the HHS appointment, however, appear to lie outside the health side of the broad HHS jurisdiction. Clinton specifically emphasized Shalala's talents as an administrator in his formal introduction. President-elect Clinton listed her "administrative experience, analytical rigor and facility with numbers, her successful and constant devotion to total quality management in running her institutions and her prior governmental experience" as her qualifications for the job. Shalala, 51, served as the assistant secretary for policy and research at the Department of Housing and Urban Development in the Carter Administration. Her experience in Washington is also indicated by a list of almost two dozen appearances at congressional hearings on her curriculum vitae, as well as other groups such as the President's Commission for the Study of Ethical Problems in Medicine and Biomedical and Behavioral Research in 1980. Shalala's position as the current chairwoman of the Children's Defense Fund may also have been an influential factor. Shalala, CDF's board member since 1980, succeeded Hillary Clinton in the top post. Shalala cited her relationship to Mrs. Clinton and her involvement with CDF, stating: "I want her to know how proud and excited I am to have the opportunity to continue our work to ensure that no child is left behind." At HHS, "the challenges will never be greater," Clinton declared at the press conference to announce Cabinet appointments. "To initiate a total overhaul of our health care system; to control costs and provide basic coverage to all Americans; to confront the escalating AIDS crisis; and to provide a healthy start to all of our children in an era of economic austerity. ...In naming Donna Shalala as Secretary of the Department of Health and Human Services, I can think of no person in this country more capable of facing and conquering these challenges." Shalala must be confirmed by the Senate, following a vote by the Senate Finance Committee on whether to recommend approval. HHS Secretary nominees also often appear at a courtesy hearing before the Labor and Human Resources Committee. The importance of introducing a new health care proposal was also cited in the introduction of Clinton's choice for the head of the White House Council of Economic Advisors, University of California at Berkeley economist Laura D'Andrea Tyson. The Clinton Administration has indicated that health reform will be treated as a major economic issue as well as a subject under the purview of HHS. Shalala asserted that the "initial challenges for HHS" will be to "build a national consensus for quality health care; to agressively and strategically attack the AIDS epidemic; to expand and enrich Head Start; and to reaffirm our commitment to basic research." In addition to her role on the NIH advisory committee, Shalala participated on NIH's Office of Minority Program's Fact Finding Team. The 53-person team developed a report, completed in February 1992, that recommended to Healy ways by which NIH "could extend healthy life and reduce the burden of illness among minorities through targeted research"; and increase the participation of minorities in "all phases of biomedical research." Apart from her activities at NIH, Shalala was recently a member of the Special Commission on the Future of the National Science Foundation. Established in August, the commission prepared a report for NSF on the future of its research mission. The report, submitted to NSF's national science board on Nov. 20, encourages greater research collaboration between the university and industrial communities. In response to questions about her non-medical background, Shalala noted that as the top administrator at Wisconsin since 1988 she has been responsible for a 488-bed teaching hospital with an annual operating budget of $260 mil. Also, Shalala asserted that Wisconsin "ranks number one among public universities in biomedical research." In fiscal year 1991, the university had annual research expenditures of $320 mil. which placed it fourth among all U.S. universities. In addition, in 1991 the university received 469 grants from NIH totaling $92 mil. Wisconsin claims that it is second only to NIH in the number of scientists performing biomedical research with 2,000 on the Madison campus.

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