Understand how we got here — and how to move forward.


November 14, 2017

How the industry is reacting to Alex Azar's HHS secretary nomination

Daily Briefing

    Industry stakeholders and lawmakers expressed mixed reactions to President Trump's decision to nominate Alex Azar as the nation's next HHS secretary, with some expressing concern over Azar's connections to the pharmaceutical industry.

    If confirmed, Azar would oversee the Trump administration's implementation of the Affordable Care Act, as well as the administration's efforts to address prescription drug prices.

    Join the Nov. 30 webconference: Streamline PA processes for provider-administered drugs

    About Azar

    Azar, who served as general counsel and deputy secretary at HHS under the Bush administration, has been critical of the Affordable Care Act (ACA). Earlier this year, Azar said "one of the nice things" about the ACA "is it does give tremendous amount of authority to the secretary of HHS."

    Azar from 2007 until January of this year held executive-level positions at Eli Lilly and Company, which according to the Times is one of three manufacturers of insulin that in recent years have imposed steep price increases. In 2007, he worked as the company's senior vice president of corporate affairs and communications, and in 2012, he began overseeing the company's U.S. operations.

    During his tenure at Eli Lilly, Azar focused on counterfeit treatments, health information technology, and federal and international government affairs and public policy. After resigning from Eli Lily, Azar founded a health care consulting firm called Seraphim Strategies. According to USA Today, he also serves on the board of HMS Holdings, which helps health insurance companies cut costs.

    Azar also is trained as a lawyer. He graduated from Yale Law School and clerked for Justice Antonin Scalia on the Supreme Court in the early 1990s.

    Provider reaction

    American Hospital Association CEO and President Rick Pollack in a statement said, "We are confident that [Azar's] extensive background in business, health care, and medicine distinguishes him as a uniquely qualified candidate for the vacancy."

    Federation of American Hospitals President and CEO Chip Kahn in a statement urged senators to confirm Azar, saying, "I have worked with [Azar] in the past and think he is the perfect pick for the times."

    Association of American Medical Colleges President and CEO Darrell Kirch in a statement congratulated Azar on his nomination, saying, "Upon his confirmation, we look forward to working with [Azar] on improving the health of all through high-quality clinical care, groundbreaking medical research, and a robust, diverse physician workforce."

    Insurer, pharmaceutical stakeholder reaction

    America's Health Insurance Plans President and CEO Marilyn Tavenner in a statement said Azar "has the experience and expertise to combine the best from the private sector with the best of our public programs to make health care work for every American."

    National Community Pharmacists Association CEO B. Douglas Hoey in a statement said, "We look forward to sharing independent community pharmacists' insights about how to make the system more transparent, increase patient access to prescription drugs, and reduce health care spending and drive better health outcomes in the process. 

    John C. Rother, the executive director of the nonprofit Campaign for Sustainable Rx Pricing, said, "We sincerely hope that he will follow through on the president's commitment to achieve lower drug prices." Rother described Azar as "competent," saying he "knows a lot about health policy and the operations of [HHS]." He added, "Even with his drug background, it's hard to say anything negative" about him.

    Patient advocacy group reaction

    Georges Benjamin, executive director of the American Public Health Association, said of Azar, "He's smart, practical, listens to all sides," adding, "We've got somebody whose heart is in the right place." Benjamin said Azar's industry connections did not concern him, saying, "He knows the inside of the way the industry works; maybe he comes up with clever solutions."

    David Mitchell, founder of Patients for Affordable Drugs, said he found Azar's work at Lilly to be troubling, saying, "After all, Lilly is one-third of the powerful insulin cartel that has driven up insulin prices 300% in the last decade." He added, "On the other hand, what people do before they enter government is not necessarily determinative of what they will do. Maybe he will use his position to help to help patients and consumers by lowering drug prices."

    However, Robert Weissman, president of Public Citizen, in a statement said, "If Alex Azar's nomination is confirmed, then Big Pharma's coup d'etat in the health care sphere will be virtually complete."

    Lawmaker, former policymakers

    Republican and Democratic lawmakers were divided on the nomination, but former HHS officials appeared to feel positively about Azar's nomination.

    Sen. Orrin Hatch (R-Utah)—chair of the Senate Finance Committee, which will review Azar's nomination—said, "The leader of HHS will be at the tip of the spear, working to not only right the wrongs of this deeply flawed law but also ensure the long-term sustainability of both Medicare and Medicaid," adding, "Azar has the experience, knowledge and fortitude to take on these daunting challenges."

    However, Senate Democrats vowed to scrutinize Azar's experience in the pharmaceutical industry and as a former HHS official.

    Sen. Ron Wyden (D-Ore.), the ranking Democrat on the Finance Committee, in a statement  said, "I will closely scrutinize Mr. Azar's record and ask for his commitment to faithfully implement the Affordable Care Act and take decisive, meaningful action to curtail the runaway train of prescription drug costs."

    Mike Leavitt, who served as HHS secretary under the Bush administration, dismissed concerns that Azar's experience as a pharmaceutical executive would impede his ability to lower drug prices. He said, "To solve the problems within the pharmaceutical industry, you have to understand the way the distribution system works," adding, "Alex understands that as well as any person in the country."

    Kathleen Sebelius, who succeeded Leavitt as HHS Secretary under former President Barack Obama, said if confirmed Azar’s past HHS experience would be a valuable asset. Sebelius added that she believes much of his focus would be on reversing the ACA—a law that Sebelius helped pass. She said, "Alex is a smart guy. He clearly has watched the last year or so. I assume his agreement to come in means that he's O.K. with enforcing or trying to promote the president's agenda" (LaMotte, CNN, 11/13; Shear, New York Times, 11/13; Korte/O'Donnell, USA Today, 11/13; Decker, Los Angeles Times, 11/3; Pelosi statement, 11/13; Crowley statement, 11/13; National Community Pharmacists Association statement, 11/13; America's Health Insurance Plans statement; American Hospital Association statement, 11/13; Federation of American Hospitals statement, 11/13; Association of American Medical Colleges statement).

    Next: Streamline PA processes for provider-administered drugs

    Progressive health systems are investing in dedicated prior authorization staff and producing monthly or quarterly reports on outpatient drug denials so that staff can appeal denials and avoid future billing errors.

    Register for the Nov. 30 webconference, "Prior Authorization for Provider-Administered Drugs," to learn more.

    Register Here

    Have a Question?


    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.