Life Science Compliance Update

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January 16, 2018

Senate Confirmation Hearing for Alex Azar - Open Payments to Remain Open


On January 9, 2018, the Senate Finance Committee held a nomination hearing for Alex Azar, President Trump’s pick to lead the Department of Health and Human Services (HHS). The Committee is expected to vote later this month on whether to send Mr. Azar’s nomination to the Senate floor. Throughout the hearing, Azar spoke of his past experience in the Department of Health and Human Services (HHS) during the George W. Bush Administration, as well as expertise he gained during his time in the private sector with pharmaceutical company Eli Lilly.

Although Republican members thought his experience would lend itself to the position, Democrats held concerns that his ties to the pharmaceutical industry would affect his efforts to combat drug pricing and anti-competitive practices. Additionally, Democrat senators expressed alarm that he would potentially use the position to take aim at the Medicare and Medicaid programs. Azar assured the Committee he was committed to elevating the efficiency and effectiveness of the programs, and any reform would be focused on slowing growth.

Opening Comments

Chairman Orrin Hatch believes that Azar “has his work cut out for him,” bu thought the candidate’s experience and knowledge of the regulatory system would allow him to hit the ground running. He explained that Azar would be responsible for the ongoing effort to bring down costs, provide greater access, give patients more choices in coverage, and tackle the opioid crisis facing the nation. Hatch also addressed the opposition of some members to Azar’s history in the private sector, but highlighted how his knowledge of the pharmaceutical world could inform cost-cutting policies at HHS.

Ranking Member of the Committee Ron Wyden questioned why President Trump nominated Azar after stating that the "price hiking drug companies were getting away with murder" because Azar is a former drug company executive with a “documented history" of raising prescription drug prices. The ranking member then went on to name four drugs which doubled in price during Azar’s time at Eli Lilly, and claimed the nominee had yet to offer a real solution to tackle growing costs. Senator Wyden did note, however, that he was pleased Azar had agreed to reinstate regular bipartisan meetings and calls with Congress.


During his statement testimony, Azar noted that he was intent on delivering on the mission of HHS to enhance and protect the health and well-being of every American through innovation. He said that marshalling and leading the resources of HHS requires never being satisfied with the status quo and anticipating and preparing for the future. He also highlighted his experience with the HHS during the Bush administration, noting that he has the skills necessary to lead the agency. Four areas that Azar believes need critical attention are: high drug prices, affordable healthcare, Medicare reform, and the current opioid epidemic. He asked for Congress to work with him to develop and implement solutions in those four areas, if confirmed.

Connections to Industry

As was somewhat expected, Azar's past work with Eli Lilly was a topic of conversation throughout the hearing. Azar spoke about it in a positive light, saying it would allow him to bring valuable insight to the position due to his familiarity with the way the system works and different incentives that may help to lower prices. He specifically pointed to generic, branded, and biosimilar competition as a way to combat higher prices, as well as efforts to prevent gaming and exclusivity.

Current Healthcare System

Another hot topic of discussion was the current healthcare system, including the impending reauthorization of the Children's Health Insurance Program (CHIP), which Azar noted his commitment to. Azar also noted – in response to a question by Senator Ben Cardin – his commitment to increasing the access to the highest quality of care throughout the country and that he would also work to maintain the Office of Minority Health and Health Disparities.

Senator Tim Scott asked Azar about how he would expand consumer choice, to which he responded by expressing his interest in creating affordable and "real insurance" options for consumers and individuals that do not have access to the so-called individual market.


Senator Chuck Grassley and Azar had a conversation about the Physician Payments Sunshine Act, of which Senator Grassley co-authored. In the hearing, Senator Grassley asked Azar whether he would be committed to continuing to collect and post all the data currently available on the Open Payments website. Azar responded, "Yes, Senator Grassley, as you know I am a big supporter of the 'Sunshine Act' and your work there and supported it at the time that you had first proposed it. I think that transparency is extremely helpful."

Medicare and Medicaid

Senator Grassley also asked Azar about his plans to fix the Medicaid program, to which Azar noted that he would work with the Centers for Medicare and Medicaid Services (CMS) to accomplish that task while reducing lost taxpayer funds. Azar also responded to a question from Senator Michael Enzi about a 1115 Waiver that Wyoming has been waiting for for two years by expressing his concern and that he would work to ensure that the government was a helpful and timely partner to state innovation.

Senator Robert Casey expressed concern about some of the discussion around entitlement reform targeting Medicaid. Azar responded to Senator Casey by stating that he understands Medicaid is "vital" for many families and will work to make the program as effective, accessible, and efficient as possible for all populations. He also noted that he would ensure Medicaid is funded and supported so that it can better serve the disabled population that heavily rely on it for necessary care. Senator Bill Nelson asked Azar several times for his opinion on entitlement reform, to which Azar responded by making clear that he was not a participant in the discussion surrounding any legislative agenda and that President Trump himself has pledged not to cut funding. Azar did mention considering raising the eligibility age for Medicare, but again reiterated his commitment to ensuring the sustainability of Medicare.

Next Steps

The Senate Finance Committee has scheduled an executive session to consider Alex Azar's nomination to serve as Secretary of Health and Human Services. The executive session will occur Wednesday, January 17th during a Finance Committee hearing for trade nominees Dennis Shea and C. J. Mahoney.

While Mr. Azar has been met with skepticism by some Democrats over his ties to the pharmaceutical industry, his nomination appears to be on the right path for confirmation 

Two Democratic senators (Sens. Joe Manchin (D-WV) and Heidi Heitkamp (D-ND) ) have announced their intention to support Azar’s nomination, and Republicans so far have been united in backing him.  


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