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A partial transcript of the interview can be found here.

"BLITZER: Is the president ready to accept a compromise that would remove this so-called public option from the agenda?

DOUGLASS: Well, we're certainly not going to negotiate this right here, Wolf. I mean what the president has said clearly and consistently is that he wants to make a -- make it possible for people to have choices, to have lower costs, to produce competition in the insurance market. That's the reason he talks about the public option.

That would be an option available to people who don't have insurance or who are underinsured. They could go out into the marketplace, where there are some private plans, and there would also be a low cost public plan that would help, you know, increase competition, provide choices that are simply not available today.

BLITZER: But if there's no desire in the Senate -- no opportunity to support that public option, there's a compromise proposal that's being offered, that would be cooperatives that would be created around the country.

Let me repeat the question, would that be OK with the White House?

DOUGLASS: Well, as I said, I'm not going to negotiate this with you, Wolf. I mean, as we've seen, the House has produced a bill that has a public option. One of the Senate committees has produced a bill with a public option. We understand that the Senate Finance Committee is looking at the co-op proposal that you described, which is an idea which they say would increase competition and lower costs. We haven't seen the details of what they're actually proposing. So we have to take a look at it and see what it is.

BLITZER: But you are open to that co-op proposal?

DOUGLASS: Well, you know, we have to see what it is. The president's goals are very, very clear -- it's got to lower costs, it's got to increase competition, it's got to keep the insurance companies honest, get the private insurance companies to get in there and compete for your business. That's the goal. And we'll see if this does that.

BLITZER: Did the White House make a secret deal with pharma, the pharmaceutical lobby here in Washington, that would limit how much cost reductions they would have going forward over the next 10 years?

DOUGLASS: Here is what -- what happened. The White House, the pharmaceutical industry, the Senate Finance Committee agreed that the pharmaceutical industry would contribute $80 billion over 10 years -- a very, very substantial sum of money that would lower the high cost of prescription drugs for seniors, who are paying exorbitant costs for prescription drugs. That was a crucial piece of this deal, as well as other steps that they would take to lower costs.

It's an $80 billion agreement. That's what the White House, the Senate Finance Committee and pharma have agreed to. And the final details are being worked out with the -- with the Senate Finance Committee.

BLITZER: Did pharma, in exchange, make a promise of $150 million to pay for advertising to help the president's plan go forward?

What -- what you have, Wolf, is this deal that is $80 billion. And we are very pleased, obviously, that -- that the pharmaceutical industry agrees with us, that there's an urgent need for comprehensive health insurance reform that's going to protect Americans from unfair rules, from rising costs. They agree with that. They've agreed with it from the beginning. That's why they came to us and we worked out this agreement with the pharmaceutical industry. And they're supporting health reform legislation. And that is good for the country.

BLITZER: So is part of the deal that they would support this legislation, go forward with $150 million in advertising?

DOUGLASS: You know, Wolf, part of the agreement here is that we're all going to work together to bring comprehensive health reform. I mean, clearly, the pharmaceutical industry said we are going to support comprehensive health reform. And that's what they're doing.

BLITZER: What about the concern that some, like Henry Waxman, on the House side, have raised that this would restrict the ability, for example, to import cheaper drugs from Canada, for example?

Is that part of the deal?

DOUGLASS: You know, there was -- there was a discussion about many of the proposals that have to do with the need to re-import drugs from other countries because our drug costs are so high. And one of the discussions was -- and this is (INAUDIBLE) particular part of the agreement -- but one of the discussions was well, maybe this won't be necessary, because drug prices are going to be lower under comprehensive health reform.

So drug prices are going to go down. And if drug prices are going to go down, maybe some of these olds debates that we've had in the past over how to solve the prices -- the rising price of pharmaceuticals -- won't be necessary anymore."

I suggest you read the entire interview.  It was more dramatic to view the exchange in context, but someone objected to this appearing in a "public use"  forum and requested that the piece be removed.