HHS Nominee Azar Signals New Line of Attack on Drug Prices

January 9, 2018

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Source: STAT

Alex Azar, Trump’s pick to lead the Health and Human Services Department, doubled down on his commitment to bringing down prescription drug prices Tuesday — and even added a new target for future policymaking: drug makers’ list prices.

Lawmakers at Azar’s confirmation hearing Tuesday before the Senate Finance Committee, like those at an earlier hearing before a separate panel, grilled him repeatedly about his plans to bring down drug prices and his role in pricing decisions in his last job, as president of Eli Lilly’s U.S. business.

In that first hearing, Azar stuck to traditionally conservative policy ideas like encouraging the development of more generic drugs, including “a viable and robust biosimilar market,” and limiting abuses of the patent system. This time, however, he hinted that he is open to other policies that might go further to address the list prices that drug makers charge.

“There’s no silver bullet here, though, I want to be very clear. There’s not one action that all of a sudden fixes this,” he said. “The most important thing we have to figure out is, can we reverse the incentive on list prices? There’s a lot that we all know we can do on the net, the discounted prices. But I want to work with this committee and anyone who is smart and thoughtful about it. Can we create incentives that actually pull down those list prices so that when the patient walks in needing to pay out of pocket at the pharmacy, that they’re not hit with those kind of costs. That’s one of the harder issues to solve.”

Azar stuttered to respond to a series of questions from Sen. Ron Wyden of Oregon, the panel’s top Democrat, who highlighted splashy charts that showed plainly that the prices for an osteoporosis drug, Forteo, and an attention deficit hyperactivity disorder drug, Strattera, had doubled during Azar’s tenure at Lilly.

Wyden pressed Azar to say whether, as chairman of Lilly’s U.S. pricing committee, he had ever lowered a drug’s price. Azar dodged.

“I don’t know that there is any drug price of a branded product that has ever gone down from any company on any drug in the United States, because every incentive in this system is toward higher prices,” he said. “No one company is going to fix that system. That’s why I want to be here working with you.”

Wyden said Azar had earlier told committee staff that he had never lowered the price of a Lilly drug.

Later, in an exchange with Sen. Debbie Stabenow (D-Mich.), Azar seemed to blame the price increases on drug rebates.

“This is what is so bizarre about the way the system is organized. Those price increases happen — and my former employer has said this publicly — during that same period, the net realized price by the company stayed flat … just to cover for increased rebates,” he said. “The patient who walks into the pharmacy, whose insurance may not be paying for that, is absorbing that cost, and that’s what I want to work with you to solve.”

At Azar’s earlier hearing before the Senate Health, Education, Labor, and Pensions Committee, Sen. Tammy Baldwin (D-Wis.) had blasted him for not offering more solutions that took aim at drug makers.

“You pushed the blame on everybody else but pharmaceutical companies that set list prices,” Baldwin said then.

Azar on Tuesday also repeated an earlier suggestion that he is open to more government drug price negotiations, modeled after the way private Medicare drug plans negotiate prices for their beneficiaries. He pushed back, however, on broader drug price negotiations within Medicare, suggesting that policies that relied on a national formulary would significantly restrict seniors’ access to drugs.

In his opening testimony, Azar also repeated his earlier pledge that tackling drug prices would be his top priority if he is confirmed as health and human services secretary.

“The president has made this clear, so have I,” Azar repeated, an exact echo of his earlier testimony.

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