Trump's HHS nominee, a former pharma exec, sets sights on drug prices
President Donald Trump's nominee for Health and Human Services secretary on Tuesday tried to assure lawmakers his experience as a drug executive — an industry the president has often vilified — makes him uniquely qualified to rein in soaring drug costs.
But Senate Democrats, during a Finance Committee hearing on his nomination, voiced skepticism that Alex Azar, who until last year ran Eli Lilly’s U.S. operations, will take significant steps toward cracking down on the pharmaceutical industry that he just left.
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Azar cast himself as sympathetic to concerns about escalating drug prices, assuring the committee he had a holistic view of how to untangle a complex system that encourages drugmakers to continuously raise prices.
“Every incentive in this system is for higher prices,” Azar said. “No one company’s going to fix that system. That’s why I want to be here with you.”
Azar, a former HHS official in George W. Bush’s administration, parried a series of attacks from Senate Democrats over his time at Eli Lilly, dismissing accusations that he contributed to skyrocketing drug prices and largely rejecting the potential for drastic steps aimed at lowering costs.
Azar is widely expected to be confirmed as HHS secretary with broad Republican support and perhaps even votes from some centrist Democrats impressed by his pragmatism and policy expertise. But Democrats warned they’ll closely press him on lowering drug prices, one of Americans’ top health care concerns.
“You’ve indicated that you’ll hit the ground running,” Sen. Debbie Stabenow said. “The question is, which direction?”
Trump has repeatedly pledged to crack down on drug prices and criticized pharmaceutical companies for “getting away with murder” — though he’s yet to follow through with any major reforms. For his part, Azar has emphasized that he’ll make addressing drug prices a top priority.
Notably, he said he wanted to explore ways to bring down “list prices” that drugmakers set before offering discounts — an area that the industry has been reluctant to address. He also expressed interest in creating a private-sector negotiation process that could bring down the costs of physician-administered drugs. Otherwise, he declined to endorse specific measures as he expressed support for creating more transparency and competition among drugmakers.
Many of the solutions Azar touted on drug prices, such as increasing competition, haven’t worked to bring down costs in the past. Other ideas, like lowering list prices, would be difficult since HHS does not regulate how drug companies set prices.
Republicans on the panel touted Azar’s background, dismissing concerns that he would be overly favorable toward the drug industry. They urged the committee to swiftly confirm Azar to lead HHS, which has lacked a permanent leader since former Secretary Tom Price resigned in September amid scrutiny of his expensive non-commercial travel.
"None of the attacks leveled at Mr. Azar are focused on his record, his experience or his qualifications," said Sen. Orrin Hatch. "Instead, we're hearing talk about supposedly revolving doors and nonexistent conflicts of interest."
Azar also faced sharp questions about his plans for overhauling Obamacare and whether he’d back major changes to Medicaid and Medicare that Republican lawmakers have sought for years. He hinted at the possibility of overhauls that would face stiff Democratic opposition, but he didn’t commit to specific ideas.
If confirmed, Azar would be the point person responsible for leading the revival of a health policy agenda that floundered through the first year of the Trump administration, hampered by high-profile legislative failures and Price’s scandal-shortened tenure. With Republicans in Congress stalled on Obamacare repeal, much of the work of putting a conservative stamp on the health care system is likely to fall to HHS.
“I have a very important obligation to make whatever program that I am entrusted with work as well as possible,” Azar said of Obamacare. “What we have now is not working.”
Once installed, Azar is expected to finalize rules expanding the availability of cheaper, less-regulated short-term and association health plans — potentially at the expense of the Obamacare markets’ stability.
Separate rules aimed at reining in Obamacare’s expanded Medicaid population by clearing the way for states to impose work requirements are already underway. During a November hearing on his nomination in the Senate HELP Committee, Azar endorsed the administration’s decisions to shorten Obamacare’s sign-up period and cut its marketing budget.
He’s also backed administration rules allowing employers to claim religious or moral objections to providing contraception in their health plans, arguing that “employers’ rights” need to be balanced against “a woman’s choice of insurance.” And by flexing the agency’s expansive regulatory muscle, Azar’s allies say he’ll look to reshape the health care landscape to fit the White House’s focus on shedding regulations across the board — and likely far beyond Obamacare.
Azar has expressed enthusiasm about the potential for expanding the private Medicare Advantage program, multiple people who have spoken with him during the confirmation process said, seeing it as a path toward weighing changes to Medicare.
That agenda is unlikely to win many fans from across the aisle, Democrats warned Azar on Tuesday, prompting some testy exchanges with Sens. Sherrod Brown of Ohio and Claire McCaskill of Missouri. Brown said the administration’s support for Medicaid work requirements could hurt people receiving treatment for opioid addiction.
“You can understand our skepticism and concern that we hear top elected officials and appointed officials in this country talk about able-bodied adults and disqualifying them for Medicaid,” Brown said.
Still, Tuesday’s hearing regularly came back to drug prices. Some of Azar’s fiercest critics pointed to his track record of consistently hiking drug prices at Eli Lilly. Under Azar’s watch, the company more than doubled the price of bone-growth drug Forteo, heart disease drug Effient and ADHD treatment Strattera, Sen. Ron Wyden said during the hearing.
"Mr. Azar told the committee staff that while he chaired the company's pricing committee he never — not even once — signed off on a decrease in the price of a drug," Wyden said. "The system is broken. Mr. Azar was a part of that system."
But on drug prices, Obamacare and nearly every other divisive topic, Azar aimed to strike a conciliatory tone while revealing little about what’s to come.
“I hope, if I’m confirmed,” Azar told a skeptical McCaskill, “I can earn your trust.”