Policy

HHS Pick at Odds With Trump’s Rhetoric on Drug Prices

Alex Azar previously led Eli Lilly’s U.S. operations

Alex Azar is President Donald Trump’s nominee for Health and Human Services secretary. (Screenshot/Veeva Systems/YouTube)

President Donald Trump’s tweet Monday announcing former pharmaceutical executive Alex Azar as his choice to lead the Department of Health and Human Services boasted that Azar “will be a star for better healthcare and lower drug prices!”

But Azar, who led drugmaker Eli Lilly and Co.’s United States operations from 2012 until earlier this year, has contributed significantly to the pharmaceutical industry political spending that the president has decried.

When Trump spoke about the high price of prescription drugs at a White House press conference in October, he spoke of how drug companies “contribute massive amounts of money to political people.”

Overall, since 2000, Azar has spent at least $105,000 on political contributions, according to Federal Election Commission records.

More than $40,000 of that total went to Indianapolis-based Eli Lilly’s political action committee, FEC records show. Outside of the PAC contributions, Azar donated exclusively to Republican candidates, including $5,400 in 2016 to the Trump campaign and affiliated entities.

That’s more than he spent on any other candidate, though over the years he’s donated thousands of dollars to the campaigns of former President George W. Bush, 2012 Republican presidential nominee Mitt Romney, Senate Majority Leader Mitch McConnell, former Indiana Republican Sen. Dan Coats and his successor, Todd Young.

Eli Lilly’s PAC is more bipartisan, and has contributed thousands to dozens of members of the Senate. In 2016, the PAC gave nearly $1.3 million to hundreds of candidates from both parties for federal, state and local elections. That year, some of the PAC’s contributions went to Senate Democrats now likely to lead the charge against Azar’s nomination, including $11,500 to Minority Leader Charles E. Schumer of New York and $5,000 to Patty Murray of Washington.

Murray, for her part, expressed skepticism Monday that Azar was the right person to address rising prescription drug prices, amid broader concerns that he would not put science and patients’ needs ahead of ideology.

“I am also interested in how, given Mr. Azar’s professional background, he believes he can fairly execute any significant effort to lower drug prices for patients — and I will do everything I can to ensure he meets the highest ethical standards,” Murray said.

Azar himself has also expressed doubts about the administration’s commitment to tackle drug prices. In February, he told attendees of a Biotechnology Innovation Organization meeting that Trump was likely to uphold policies that prioritize the drug industry’s ability to innovate. “I simply do not see efforts to undermine that,” Azar said, according to the trade publication Genetic Engineering & Biotechnology News.

Looking ahead

Eli Lilly’s record on drug prices will surely be scrutinized during the confirmation process. According to the company’s 2016 report to investors, it raised prices of its products by 14 percent in 2016, though it said the net price increases after discounts were only 2.4 percent, compared to 9.4 percent net increases in 2015.

Eli Lilly is a major producer of insulin for diabetes treatment, and many have questioned the rising prices in that category. Prices of Lilly’s drug Humalog jumped from around $100 in 2010 to more than $250 in 2016, according to a report from the Congressional Diabetes Caucus. Lilly and several other companies that make insulin face several lawsuits claiming that they colluded to jack up insulin prices.

Azar could also get pressed about other questionable practices that occurred during his time at Eli Lilly. In 2012, the Securities and Exchange Commission charged Lilly with violating the Foreign Corrupt Practices Act over payments it made to foreign government officials in Russia, Brazil, China and Poland. The SEC alleged that Lilly paid millions to third-party companies affiliated with the governments that were mostly used to funnel money to foreign officials. Lilly allegedly engaged in the shady arrangements to ensure purchases of the company’s drugs by government health programs. Lilly settled with the SEC for $29 million.

Eli Lilly has also spent millions lobbying on a panoply of issues before Congress, including drug pricing and reimbursement issues. According to disclosure reports, the drugmaker spent $12.8 million in 2016 and has so far spent $8.4 million in 2017.

Despite concerns from Democratic lawmakers, some patient groups struck a more cautiously optimistic tone. The AIDS Institute, which describes itself as a bipartisan nonprofit organization, said Azar’s experience as HHS’s deputy secretary and general counsel during the George W. Bush administration would serve him well, despite broader concerns about the Republican effort to overturn the 2010 health care law.

“While we may not share some of the Trump Administration’s objectives relative to such issues as the Affordable Care Act and Medicaid, we believe a practical problem-solver like Mr. Azar is the right person for the job for this administration,” the group said in a statement.

Ben Wakana, the current executive director of Patients for Affordable Drugs, a group that eschews drug company contributions, said it was concerned that the administration would continue to only talk about high drug prices.

“But actions speak louder than words,” Wakana, an HHS spokesman during the Obama administration, said in an email. “Mr. Azar is well-qualified and has the chance to stand up for patients because he knows exactly how our drug pricing system is broken. If he wants to take meaningful action to lower drug prices, we want to help him.”

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