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Drug Prices, Industry Ties Take Spotlight at HHS Nominee Azar Hearing

Xconomy National — 

If Wednesday’s hearing for Health and Human Services Secretary Nominee Alex Azar is any indication, reining in drug prices and insurance premiums are the policy priorities that will guide Congress’s interaction with the department under a new leader.

For the better part of the three-hour hearing by the Senate’s Health, Education, Labor and Pensions committee, Azar fended off a barrage of questions, most of them having to do with the affordability of the healthcare products and services that Americans depend on.

Azar is aiming to succeed Tom Price, who resigned as secretary of the department in September following reports that he spent more than $1 million in taxpayer money for travel on government and private planes.

Azar is an attorney, and will bring a slightly different perspective to the department than Price, a physician. Azar’s previous career stops include positions in government and the pharmaceutical industry. He worked at HHS during the George W. Bush administration, first as general counsel to the department, and later as its deputy secretary. Azar joined Eli Lilly (NYSE: LLY) in 2007 as senior vice president of corporate affairs and communications. He served as president of the Indianapolis-based company’s U.S. division from 2012 until earlier this year, when Azar left Lilly.

Azar listed four priority areas he would address at HHS: high drug prices; affordability of insurance; moving Medicare away from paying for procedures and sickness to instead paying for healthy outcomes; and fighting the opioid epidemic.

Referencing his previous roles at HHS, Azar described the opportunity to serve as secretary as “returning home.” He said his private sector work combined with his HHS experience qualify him to handle health priorities facing the agency, particularly drug pricing. But some committee members said that industry experience made him questionable for the role.

Sen. Elizabeth Warren, a Massachusetts Democrat, pointed to Lilly’s promotion of its antipsychotic olanzapine (Zyprexa) to nursing homes as a dementia treatment, an unapproved use of the medication. In 2009, Lilly paid a $1.4 billion fine to settle litigation, including a $515 million criminal fine.

Azar said that he was not involved in Lilly’s olanzapine promotion but the aftermath was a learning experience that changed the company’s behavior. Warren countered that Lilly had made billions of dollars from fraudulent drug promotion, and other pharma companies have followed suit, accepting legal settlements as the cost of doing business. She added that Lilly is currently being investigated for its pricing of its insulin product, Humalog.

“We’re supposed to believe that this time you’re going to be able to hold them accountable?” Warren asked Azar.

Criticism of Azar did not fall solely along party lines. Rand Paul, a Kentucky Republican, asked Azar why … Next Page »

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