Alex Azar, President Trump's nominee for HHS secretary, during a Senate Finance Committee hearing Tuesday signaled his openness to mandatory payment models—representing what could be a major shift in the Trump administration's policy should he be confirmed.
Azar served as general counsel and deputy secretary at HHS under former President George W. Bush's administration. Azar from 2007 until January 2017 held executive-level positions at Eli Lilly and Company. In 2007, he worked as the company's SVP of corporate affairs and communications, and in 2012, he began overseeing the company's U.S. operations. The company is among three drugmakers at the center of a class-action lawsuit that alleges insulin makers and pharmacy benefit mangers colluded to raise prices.
Azar's outlines priorities
Azar during the hearing also outlined four areas he would prioritize if confirmed as HHS secretary:
- Addressing high prescription drug prices;
- Combating the opioid misuse epidemic;
- Making health care more affordable and accessible; and
- Using Medicare to help transition the U.S. health system from a fee-for-service to a value-based payment system.
In addition to signaling a potential shift on mandatory payment models—suggesting he would consider them a mandatory payment model if needed "to test a hypothesis there around changing our health care system"—Azar also touched on prescription drug prices, Medicaid, and the insurance market at large.
Comments on Rx drug prices
House Democrats during the hearing questioned Azar on his stance on prescription drug prices, noting his ties to the industry.
According to CNBC, Azar did not directly answer questions from Sen. Ron Wyden (D-Ore.) about whether he approved price increases for drugs while working at Eli Lilly. Instead, he said, "I don't know [that] there is any price of a branded drug product that has gone down from any company on any drug in the United States because every incentive in this system is toward higher prices."
Overall, Azar said prescription "drug prices are too high" in the United States, and discussed potential ways to address rising drug prices, such as allowing the government to negotiate drug prices in some instances. For example, he said, "If the government is the purchaser, let's say for instance, we are going to be buying (drugs) 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."
However, Azar seemed less open to allowing Medicare to negotiate drug prices, CNBC reports. Azar said allowing Medicare Part B to negotiate drug prices would be "worth looking at," but added, "For the government to negotiate … we would have to have a single national formulary that restricted access to all seniors for medicines." He continued, "I don't believe we want to go there in restricting patient access."
Instead, Azar said the federal government should look to create incentives for drug companies to set lower list prices for drugs and foster competition from biosimilars and generic drugs.
Comments on Medicaid
Azar said he "share[s] a commitment to the Medicaid program," which he called "a vital safety net." He added, "If confirmed my goal would be to make that program as efficient … as possible."
According to the Washington Post, Azar suggested he supports converting Medicaid to a block-grant program, provided there is sufficient funding for the initiative. He continued, "I don't believe any of the proposals that [Trump] or I would support involve cutting Medicaid, or cutting the expansion, but rather slowing the rate of growth over the next 10 years in the interest of sustainability." Both the House-passed American Health Care Act and the Senate's Better Care Reconciliation Act, which Trump supported, would have eliminated the Affordable Care Act's (ACA) enhanced federal Medicaid funding for expansion states.
Comments on the US insurance market
Azar also expressed support for the administration's efforts to scale-back the ACA and expand access to association health plans, the Post reports. While Azar did not specifically mention the administration's recent proposed rule on association health plans, he said the administration should find ways within current law to promote "more choice of insurance … that fits [consumers'] needs," adding, "What we have now is not working for people."
Azar said he would support allowing insurers to sell plans across state lines, Politico reports. Further, Azar expressed support for a plan offered last year by GOP Sens. Lindsey Graham (S.C.) and Bill Cassidy (La.) to repeal and replace the ACA, which ultimately failed to pass the Senate.
According to the Post, the Senate Finances Committee later this month is expected to vote on whether to recommend Azar's confirmation to the full Senate. The committee must vote to either:
- Report the nomination favorably to the full Senate;
- Report the nomination unfavorably to the full Senate; or
- Report the nomination without recommendation to the full Senate.
Republicans on the panel, which hold the majority, likely would support Azar's nomination, Politico reports. However, if the committee takes too long to vote on the nomination, the full Senate can vote to invoke cloture, which allows the full chamber to consider the nomination.
Fifty-one votes in the full Senate are needed to confirm Azar's nomination. Republicans hold 51 seats in the Senate, while Democrats hold 49. In the instance of a tie, Vice President Pence will cast his vote as a tie breaker. The Senate is likely to confirm Azar, Politico reports (Mangan, CNBC, 1/9; Morse, Healthcare IT News, 1/9; Goldstein/Eilperin, Washington Post, 1/9; Cancryn/Karlin-Smith, Politico, 1/9; Wallace, CNN, 1/9; Roubein, The Hill, 1/9; Coombs, CNBC, 1/9; Alonso-Zaldivar, AP/ABC News, 1/9; C-SPAN, 1/9; Gregory, HealthExec, 1/9).
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