Senate Finance Committee Nomination Hearing on Alex Azar for HHS Secretary


On Tuesday, January 9th, the Senate Finance Committee held a hearing to Consider the Nomination of The Honorable Alex Michael Azar II, of Indiana, to be Secretary of Health and Human Services (HHS).  For a full webcast of the hearing see here.  A full transcript of the hearing is attached.


At the opening of the hearing, Chairman Orrin Hatch (R-UT) referenced the scrutiny surrounding the Ensuring Patient Access and Effective Drug Enforcement Act, which he co-authored. Reports released in October by the Washington Post and 60 Minutes found that a small group of lawmakers allied with drug companies pushed the legislation, which limited the Drug Enforcement Administration’s enforcement powers, through Congress.  Hatch said the bill requires HHS to submit a report to Congress regarding obstacles to legitimate patient access to controlled substances, and issues with diversion of controlled substances.  He added the required report is long overdue, and urged the importance of getting this report to Congress, to review and make any necessary changes to the law that may help to turn the tide of this epidemic. For Hatch’s full written testimony, see here.


In his opening remarks, Ranking Member Ron Wyden (D-OR) expressed concern over Azar’s former position as president of Eli Lilly's U.S.-based subsidiary, Lilly USA and the drug price spikes that happened under Azar's tenure.  He also expressed concerns over the Administration’s desire to cut Medicare, Medicaid, and Social Security.


The Honorable Tommy Thompson, former Governor of Wisconsin and Secretary of Health and Human Services from 2001 to 2005 and Michael Leavitt, former Governor of Utah, Administrator of the Environmental Protection Agency and Secretary of Health and Human Services from 2005 to 2009; introduced Azar, touting his qualifications, successes, leadership capabilities and integrity.


Azar testified that as Secretary, he will focus on four priorities:

  1. Lower rising prices on prescription drugs;
  2. Make healthcare more affordable, more available and more tailored to what individuals want and need in their care;
  3. Harness the power of Medicare to shift the focus in our health care system, from paying for procedures and sickness to paying for health and outcomes;
  4. Tackle the scourge of the opioid epidemic.


The Finance Committee is likely to vote on advancing Azar's nomination to the Senate floor next week.  A summary of key topics covered during the hearing follows.


Drug Pricing

Regarding his first priority of lowering prescription drug prices, Azar said “there’s no silver bullet,” but there needs to be work on competition, including from generics and biosimilars.  He said he wants to hear ideas and is open to incentives to get drugmakers to bring down list prices so patients without coverage who are forced to pay the full amount are not hit as hard.  Azar also said he’ll go after those gaming or exploiting the patent system, and said his experience working in the industry “actually brings an advantage.”


On government negotiating drug prices, Azar says he sees opportunities in Medicare Part B, but innovation and access must be preserved.  Regarding the Medicaid drug rebate program, he said he will work to make sure the program is improved, that the regulations and guidance are clear, and if necessary, will look into enforcement.  Azar also said that buyers are in a weak position, and that bargaining power should be tilted toward drug manufacturers.  He touted pharmacy benefit managers as the most effective way to bring consumer costs down and said they should be expanded to negotiate for physician-administered drugs in Part B.


Senator Debbie Stabenow (D-MI) said during the hearing that the National Academies of Sciences, Engineering and Medicine has indicated that buyers in the biopharmaceutical sector buyers often appear to be in a weak position with little alternative but to purchase the drug at whatever the price and say the effect of not allowing HHS to negotiate prices is to tilt the bargaining power further in favor of drug manufacturers. Now Part D, as it was originally passed, was on the side of the drug company and prohibited negotiations.  She asked, would Azar support changing the law so that under Medicare Part D, you can negotiate on behalf of seniors and the American people to bring prices down?


Azar answered that negotiation is happening in Part D; that it gets the best rates, and the national academy is wrong. on that.  He said these are incredibly powerful negotiators who get the best rates available, and for the government to negotiate there, there would have to have a single national formulary that restricted access to all seniors for medicines. He added that CBO’s Pete Orszag has said this too and to do so would restrict patient access.


Opioid Crisis

Democratic and Republican Committee members asked Azar what he would do to address the opioid epidemic.


Senator Stabenow referenced the President's Commission on Combating Drug Addiction and the Opioid Crisis recommendation for the use of naloxone, and asked if he would support negotiation for that drug.  Azar said, “I would look at that and learn more about that situation. But, if the government is the purchaser -- so let's say for instance, if we're going to be buying that as part of the opioid crisis program, and we're directly buying that and supplying it out to states and first responders, there's absolutely nothing wrong with the government negotiating that.”  Azar added that he did that with ciprofloxacin and Secretary Thompson during the anthrax attacks, and there's nothing wrong with the government directly negotiating, when we're the purchaser for value, but needs to learn more about that issue from within the government.


Senator Rob Portman (R-OH) brought up the Medicaid Institutions for Mental Diseases (IMD) exclusion and noted that he and Senator Durbin (D-IL) have a bill called the Medicaid CARE Act, which would lift the IMD exclusion for residential treatment programs.  Portman asked about restrictions in section 1115 Medicaid waivers and whether Azar would support legislation he and Durbin’s legislation to raise the IMD cap from 16 to 40 beds.  Azar answered that he couldn’t commit to support on the legislation, but said that he doesn’t understand the existing restrictions, especially in the face of the opioid crisis, and added that there is a pressing demand for treatment for individuals with substance use disorders, and would like to work with Portman on the issue if confirmed.


Katie Weyforth Vanlandingham

Van Scoyoc Associates

800 Maine Ave SW

Suite 800

Washington, DC  20024