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HHS Pick Grilled on Drug Prices

Azar pledges to lower cost of prescriptions, but Paul has “doubts”

Alex Azar, nominee to be Health and Human Services secretary, takes a seat for his hearing before the Senate Health, Education, Labor and Pensions Committee on Wednesday. (Bill Clark/CQ Roll Call)
Alex Azar, nominee to be Health and Human Services secretary, takes a seat for his hearing before the Senate Health, Education, Labor and Pensions Committee on Wednesday. (Bill Clark/CQ Roll Call)

The nominee to lead the Health and Human Services Department, Alex M. Azar, told a Senate panel that his top priority would be addressing the high price of prescription drugs. But there was skepticism from both sides of the dais at Wednesday’s Health, Education, Labor and Pensions Committee hearing that Azar, a former pharmaceutical company executive, would live up to that promise.

While it was mostly Democrats who took aim at Azar’s tenure working for and running the U.S. affiliate of Eli Lilly & Co., Sen. Rand Paul said he would also need to be convinced. The Kentucky Republican pressed Azar on whether he would work on a system to safely import lower-cost prescription drugs from places with comparable systems, like Canada and Europe.

When Azar dismissed that approach, pointing out that previous administrations of both parties had rejected the idea, Paul shot back: “They’ve been wrong and beholden to the drug companies.” Paul then threatened to withhold his support unless Azar came up with a proposal to make it work.

“We all have our doubts, because Big Pharma manipulates the system to keep prices high,” Paul said.

In his opening statement, Azar endorsed a drug price proposal that the Trump administration has already put forward: promoting competition from lower-cost generic drugs, closing regulatory loopholes that can extend drug company monopolies, and making sure that the companies are adequately compensated in overseas markets.

“Drug prices are too high. The president made this clear and so have I,” Azar told lawmakers. “I believe I can bring the skills and experience to the table that can help us address these issues while still encouraging discovery to make sure Americans have access to high quality care.”

Azar pointed to his time at HHS during the George W. Bush administration, when he spent four years as general counsel and two years as deputy secretary. He helped implement the Medicare prescription drug benefit, known as Part D. Under Part D, private pharmaceutical benefit managers negotiate with drug companies on prices. When asked about President Donald Trump’s endorsement of Medicare drug price negotiation, Azar said he would be interested in looking at whether the Part D model could be applied to the physician-administered drugs purchased by Medicare under Part B.

But Azar avoided straight answers about whether he would hold pharmaceutical company executives who exploit the system to account, and dodged questions from Democratic Sen. Tammy Baldwin of Wisconsin about why Eli Lilly raised prices for its drugs year after year. When Azar pointed to problems with the broader system, Baldwin responded: “It starts with the manufacturers setting the list price.”

Access to health care

If confirmed, Azar said he would also focus on using Medicare’s size and power to help shift the health system from a fee-for-service model to one where patients pay based on health outcomes. He also pledged to address opioid abuse, calling for more conservative prescribing practices and an expansion of treatment services.

However, he would not say if the administration thought more money was needed to address the opioids issue and said he would need to examine what resources were already available. When asked whether essential health benefits required in health insurance marketplace plans should include substance use disorder treatment, he said that was best for states to decide.

In discussing coverage offered through the health care law exchanges, Azar said he wanted “all Americans to have access to affordable insurance that they desire.” But use of the word “access” and an emphasis on choice provided ammunition to Democrats who argued that the administration doesn’t care if people are insured.

Azar defended the administration’s actions related to coverage under the 2010 health care law. He said shortening the length of the open enrollment period, as the Trump administration did this year, would make it easier for health insurers to plan for the year ahead. He suggested that programs to help individuals navigate their insurance options weren’t working, and that it was the right decision for the administration to cut their funding.

“If something’s not working, why are we funding it?” Azar asked.

Azar is aligned with Republicans on some proposed changes to the health law, including a repeal of the mandate to buy health insurance. He also supported the administration’s decision to stop making cost-sharing payments to insurance companies who subsidize premiums for poorer individuals.

Following Trump’s endorsement of a bipartisan proposal to extend the cost-sharing subsidies and change state Medicaid waiver procedures, Azar also backed the approach. But he didn’t think the bill, from committee Chairman Lamar Alexander of Tennessee and ranking member Patty Murray of Washington, was a long-term fix.

“I don’t believe it is a long-term solution to problems that are just inherent in the Affordable Care Act,” he said. “I do think it’s an important stopgap to help along that way.”

He also defended the administration’s decision to allow exemptions for employers who don’t want to cover the cost of contraceptives for their employees because the employers say they have moral or religious objections. While Azar told Murray he would follow congressional intent, science and evidence, he said there should be a balance between women’s health needs and employers’ views. He argued that the change would only impact a small number of people.

Outlook on nomination

Senators on the Finance Committee will also get a chance to question Azar, but a hearing has not yet been scheduled. That panel will ultimately vote on whether to send his nomination to the full Senate.

Azar appears to be a less controversial nominee than his predecessor, Tom Price, who resigned as HHS secretary in September after reports of his travel at excessive taxpayer expense. Azar’s connection to Eli Lilly, which ended earlier this year, doesn’t seem to be creating the same kind of headaches that Price had over his trades of health care industry stocks and financial connections to other health care entities.  

Still, Azar’s answers about health insurance coverage and women’s health did not satisfy Democrats. At the outset of the hearing, Murray derided Azar as an “extreme, ideologically driven nominee to pick up right where former Secretary Price left off.”

After Wednesday’s hearing, it seemed like support for Azar’s nomination would break down along party lines, with the possible exception of Paul. Republicans are impressed with his background and think the fact that he led a pharmaceutical company makes him uniquely qualified to know what’s wrong with the American drug pricing system.  

“Experience in health care to me is an obvious asset for someone called upon to lead the nation’s most important health care agency,” Alexander said.

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