Azar talks list prices, mandatory Medicare pilots
- Trump administration nominee Alex Azar fought back against assertions that his ties to the pharmaceutical industry make him ill-equipped to serve as HHS Secretary at his Senate Finance confirmation hearing.
- The former Eli Lilly executive identified potential actions to lower drug prices, and an openness to mandatory pilot programs in some cases.
- Despite opposition from Democrats, Azar is likely headed towards confirmation, as Republicans can confirm him without any minority support.
Democrats blasted Azar as too cozy with drugmakers to fairly regulate drug prices, tying him to insulin price hikes by Lilly when he was CEO of the company’s U.S. division.
Azar, who also served at HHS under former President George W. Bush, acknowledged that incentives spurring drugmakers to post high list prices are skewed.
Democrats pressed Azar on whether Lilly ever dropped the price of a drug during his tenure at the company. He sidestepped the question, but acknowledged prices are moving in just one direction throughout the industry.
"I don't know that there is any drug price of a branded product that has gone down from any company in the United States because every incentive in this system is for higher prices,"Azar said.
His top prescriptions to bend high drug costs echoed his testimony before the Senate HELP Committee, endorsing increasing generic drug competition and preventing the gaming of exclusivity and patents.
"There’s not one action that all of a sudden fixes this. The most important thing we have to figure out is, can we reverse the incentive on list prices?" Azar said.
Azar also seemed to endorse some mandatory pilot programs within Medicare when they are necessary to gather data, in what appears to be a departure from former HHS Secretary Tom Price’s stance. CMS recently finalized its decision to cancel mandatory hip fracture and cardiac bundled payment models.
"We need to be able to test hypotheses, and ... I want to be a reliable partner. I want to be collaborative in doing this. I want to be transparent and follow appropriate procedures. But to test a hypothesis there around changing our healthcare system, if it needs to be mandatory as opposed to be voluntary to get adequate data, then so be it," Azar said.
But it does not appear that Azar is open to popular ideas floated to put a dent into drug prices, such as letting Medicare negotiate drug prices or allowing drug importation.
Azar argued that pharmacy benefit managers already negotiate to get discounts from list prices in Medicare Part D, and echoed his idea that such practices should be explored in Medicare Part B. Currently, the government cannot directly negotiate drug prices in Part D.
According to the Pew Charitable Trusts, there is no Congressional Budget Office score on the effects of allowing HHS to negotiate drug prices in Part D and formulary placement, but a 2007 estimate found that allowing HHS to negotiate Part D drug prices would have a negligible effect without additional authority.
Azar has spoken against the idea of importing drugs from abroad unless HHS can certify such practices are safe, a position held by several FDA commissioners.
The Federation of American Hospitals urged the timely confirmation of Azar prior to the hearing, saying he was uniquely suited to serve as HHS Secretary. But other groups such as Public Citizen and the AFL-CIO recently slammed the nominee as a compromised drug industry executive who will not meaningfully work to lower drug costs in a letter to all 50 senators.
- Senate Finance Committee Hearing to Consider the Anticipated Nomination of The Honorable Alex Michael Azar II, of Indiana, to be Secretary of Health and Human Services
- Healthcare Dive Advocacy groups slam Azar ahead of committee hearing next week
- Healthcare Dive What you need to know about the new nominee to lead HHS
Follow David Lim on Twitter