Senators of both parties quiz Trump health pick on drug cost

By RICARDO ALONSO-ZALDIVAR and LAURIE KELLMAN Markets Associated Press

President Donald Trump's pick to be the next health secretary faced skepticism from senators of both parties Wednesday over his commitment to work for lower drug prices.

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Alex Azar acknowledged at a Senate hearing that prices are too high and the current system "is not working for the patients who are paying out of pocket." He said his combination of government and drug industry experience uniquely positions him to find answers.

But members of the Senate Health, Education, Labor and Pensions Committee questioned whether Azar, a former pharmaceutical executive, would put the public would first if he is confirmed as secretary of the Department of Health and Human Services.

Sen. Rand Paul, R-Ky., put Azar on notice that his vote isn't guaranteed. Paul demanded a written explanation from Azar on why allowing consumers to import prescription drugs from other advanced countries would not be safe.

"You've got some convincing to make me believe you're going to represent the American people, not big pharma," said Paul.

Pressed for specifics, Azar, a former executive of Indianapolis-based Eli Lilly Co., said one of his priorities will be to crack down on drug companies "gaming" the patent system by making superficial changes in branded medications to stave off generic competition.

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He also said there should be increased competition between generic and brand name drugs.

Azar also addressed the Obama-era health care law, saying the government must help people who risk being priced out of the insurance market by rising premiums. Several million consumers who buy their own health insurance policies aren't eligible for subsidies under the Affordable Care Act. But their premiums have gone up because of the health law.

Legislation to help stabilize premiums is pending in Congress. But he said he doesn't believe that "is a long-term solution to problems inherent in the Affordable Care Act.

Sen. Patty Murray, D-Wash., quizzed Azar about the "conscience exemption," which allows employers to opt out of providing certain health care services to women. He said very few employers have invoked it, and signaled that he supported their ability to do so.

All sides agree that Azar, 50, is headed for Senate confirmation, which would be his third after appointments to senior positions at the Department of Health and Human Services in the George W. Bush administration.

The Senate Finance Committee will hold another hearing on Azar soon and formally decide whether to send the nomination to the full Senate.

If confirmed, Azar would be Trump's second HHS secretary, replacing Tom Price, who resigned under pressure after using private charter flights at taxpayer expense.

Azar's career path could prove a challenge given Trump's vow to "drain the swamp" of Washington.

During his decade-long stint as an executive Indianapolis-based Eli Lilly and Co., patient advocacy groups criticized Lilly for price increases to one of its biggest products: insulin.

In speeches while at the company, Azar questioned whether the government's regulatory machinery has kept up with the pace of scientific change, and he warned that price controls could stifle innovation — standard industry arguments.

"Will he carry pharma's water? I don't think so, based on my interactions with him," said former Senate Majority Leader Bill Frist, a Republican from Tennessee. Like Daschle, he is active in the Bipartisan Policy Center, a Washington think tank.

Before resigning from Eli Lilly earlier this year, Azar built a financial portfolio now worth $9.5 million to $20.6 million, according to disclosure records filed with the Office of Government Ethics. He also was paid nearly $2 million in his final year at the company, received a $1.6 million severance and sold off more than $3.4 million in Lilly stock. He also declared $100,000 to $1 million in capital gains from the sales, along with millions more in stock and bond holdings.

Azar is an Ivy League-educated lawyer with conservative credentials. Early on he built connections in Republican circles — he clerked for Supreme Court Justice Antonin Scalia, worked under Kenneth Starr during the Whitewater probe of President Bill Clinton's land deals and raised campaign cash for GOP presidential candidates Mitt Romney and Jeb Bush.

His previous posts at HHS allowed him to build relationships with Democrats, too. Daschle said he worked most closely with Azar in 2001, when Daschle was a South Dakota senator and anthrax was found in his office. Azar was then the HHS general counsel. Four years later, he was confirmed as deputy secretary of the agency.

Dan Mendelson, president of the consulting firm Avalere Health and a Clinton administration veteran, said Azar's credibility comes from an understanding of federal programs and HHS divisions like Medicare, Medicaid and the Food and Drug Administration.

"He has policy wonk credentials," said Mendelson, a Democrat who has known Azar for about 20 years and considers him a friend. "I can't think of a better person to tackle the opioids crisis, for example, because he understands all the different levers."

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Associated Press writers Tom Murphy and Brian Slodysko in Indianapolis and Stephen Braun in Washington contributed to this report.