Alex Azar, in line to become the next health and human services secretary, testified Wednesday that prescription drug prices are too high and that the federal government has a role in trying to make medicine more affordable for consumers.
The focus on drug costs during Azar’s nomination hearing before the Senate Health, Education, Labor and Pensions Committee reflected an attempt to get ahead of criticism that the decade he just spent as a top executive at a major pharmaceutical company makes him ill-equipped to wrestle with one of the most vexing financial issues in the U.S. health-care system.
“I think there are constructive things we can do” to bring down the price of medicines, Azar said, sitting alone at the broad witness table in a paneled Senate hearing room. He said he favors fostering competition between brand-name drugs and generic equivalents — an issue he worked on in the early 2000s while he was the HHS general counsel during the George W. Bush administration. “We have to fight gaming in the system by patents and exclusivity agreements.”
He said he also supports wider use of drug rebates, but he did not mention any potential constraints on the prices that pharmaceutical companies set.
The HELP Committee’s ranking Democrat, Sen. Patty Murray (Wash.), quickly retorted that the prospect of Azar presiding over federal policy on drug prices would be akin to “the fox guarding the henhouse.”
Drug prices were one of four central priorities that Azar said would guide him as HHS secretary if he is confirmed. The others, he testified, would be making health care more affordable and available, shifting Medicare further in the direction of creating incentives for good health outcomes rather than the volume of medical care, and fighting “the scourge of the opioid epidemic.” He did not address how he would approach the other three priorities.
In response to questions from Democratic senators about his views on health coverage of contraceptives — an ideological flash point — Azar largely sidestepped. He said he had not studied a 2011 recommendation from what was then the National Academy of Sciences’ Institute of Medicine that women should have access to free prescription birth control. And he said the administration already has struck a balance between making affordable contraceptives available and respecting “the conscience objections” of people and organizations opposing that.
He indicated that he favors a goal of the president and many GOP conservatives to convert the Medicaid program for poor Americans from its half-century tradition as an entitlement system open to anyone eligible into a block grant that would allot states a fixed sum and more freedom from federal rules. “I support it as a concept to look at,” he said, adding that it “can be an effective approach.”
Azar was pressed on whether he agreed with steps Trump and administration officials have taken to undercut the Affordable Care Act. “My understanding was that the choices made were about what’s working and what’s not working,” he said. He gave a variant of that answer to questions about funding cuts for enrollment “navigators” who provide guidance to consumers, as well as on Trump’s decision to end payments to insurers to offset discounts the ACA requires them to give lower-income customers on deductibles and other out-of-pocket costs.
As for a 90 percent reduction in federal money for advertising and other outreach activities to encourage consumers to sign up, Azar said that move “regularized” funding — an apparent reference to HHS officials’ assertion that the cut brought ACA advertising money in line with that for long-standing Medicare drug benefits. “At some point the insurers have to do their own doggone job,” he said.
On another theme, the nominee maintained that electronic health records often remain to difficult to transfer, despite years of the government’s push for improvements. “It is ridiculous,” he said.
Azar’s confirmation has been considered highly likely, with no Republican wavering on his nomination since President Trump selected him earlier this month. At the hearing, however, Sen. Rand Paul (R-Ky.) said his vote would hinge on whether the nominee backs a controversial strategy of lowering drug prices by reimporting ones manufactured domestically and sold for less in other countries. Specifically, he challenged Azar to describe a method by which HHS could certify as safe certain drugs sold in Europe.
“If you can’t do that, I can’t support you,” Paul said. “You need to convince those of us who are skeptical that you’ll be part of fixing [the problem of high drug prices] and won’t be beholden to big pharma.”
Azar responded that “there are clearly abuses, senator, in the system,” adding that he is “against unsafe reimportation.” When he noted that both Democratic and Republican HHS secretaries had been unable to certify that importing drugs sold in Europe would be safe, Paul countered, “They’ve been wrong and beholden to the drug companies.”
The three-hour hearing was the first of two that senators will conduct on Azar's nomination. Wednesday's session was a so-called courtesy hearing because the HELP Committee does not vote on the confirmation. That power rests with the Senate Finance Committee, which has not yet scheduled its hearing.
Azar, 50, would succeed the president's first HHS secretary, Tom Price, who resigned under pressure in late September amid investigation of his use of noncommercial planes for official business at taxpayers' expense.
Azar’s background is distinctive. All but one previous HHS secretary has come out of politics or academia. A lawyer by training, Azar would be the first who has worked as a senior executive in the pharmaceutical industry, plus held previous senior roles at HHS.
Azar was the department’s general counsel from 2001 to 2005, then spent two years as its deputy secretary. The Senate confirmed him for each of those positions.
From there, he was hired by Indianapolis-based Eli Lilly as its senior vice president of corporate affairs and communications, and he rose to become president of its largest affiliate, Lilly USA, in 2012.
He resigned that position early this year, saying he wanted to explore new leadership opportunities, and formed a consulting firm.
Asked by Sen. Chris Murphy (D-Conn.) about the influence of his years at a pharmaceutical company, Azar replied: “This is the most important job I will ever have in my lifetime, and my commitment is to the American people and not any industry I have worked for.”