Empowering Medicare to negotiate drug prices could leave patients with reduced access to medications, President Donald Trump's pick for health secretary warned Tuesday.
Alex Azar, a former Eli Lilly and Co. executive, acknowledged to the Senate Finance Committee that drug prices are too high and said he'd work to lower them if confirmed as secretary of Health and Human Services.
But he said allowing Medicare to negotiate drug prices across the board would risk restricting choice for patients, since the government would have to establish an approved list of discounted medications.
As a candidate, Trump called for allowing Medicare to negotiate drug prices. Yet there has been no proposal from Trump's administration in the year he has been in office, though the Food and Drug Administration is acting to promote competition from generic drugs.
"If anybody's counting on 2018 to be the year the Trump team springs into action on drug pricing … they're in for disappointment," said Sen. Ron Wyden, D-Ore.
Azar's comments reflected concerns traditionally heard from the business wing of the GOP.
He was responding to questions from Sen. Debbie Stabenow, D-Mich., who said she's concerned about what direction he would take if confirmed. The finance panel is expected to vote soon on sending Azar's nomination to the full Senate for a final decision.
Stabenow asked Azar if he favors allowing Medicare's prescription drug program — known as Part D — to negotiate with the pharmaceutical industry, which is currently prohibited.
Azar responded that the private insurance plans delivering the drug benefit are already negotiating some of the lowest prices.
"These are incredibly powerful negotiators who get the best rates available," he said.
"For the government to negotiate there, we would have to have a single national formulary that restricted access to all seniors for medicines," he said. "I don't believe we want to go there in restricting patient access.
Azar said he favors focused negotiations, such as when the government is buying a large quantity of particular drugs. As examples, he cited overdose-reversing drugs for distribution to local police and emergency departments or antiviral drugs to guard against a flu pandemic.
He also suggested negotiations are "worth looking at" for drugs provided through Medicare's outpatient coverage, known as Part B. Those medications include cancer drugs that are administered in doctors' offices. The government pays for the cost of the drugs, plus a fee to physicians.
Americans consistently rank the high cost of prescription drugs among their top health care priorities, ahead of issues like repealing former President Barack Obama's health care law. Part of the problem is that the price varies widely depending on who's buying. Even insurers struggle with the cost of some cutting-edge medications.
Azar said he wants to engage the pharmaceutical industry on lowering prices, but Democrats pointed out that during his 10-year tenure as a top executive at Indianapolis-based Lilly, prices kept going up.
Before resigning from Lilly about a year ago, Azar built a financial portfolio now worth $9.5 million to $20.6 million, according to disclosure records filed with the Office of Government Ethics.
FDA Commissioner Scott Gottlieb also faced scrutiny for receiving consulting payments from drugmakers and medical device companies when he worked in the private sector. Since taking office, Gottlieb has pushed efforts to lower drug prices by reworking FDA drug reviews to increase competition.
Azar, 50, a Yale law graduate and policy expert with a conservative political pedigree, would be returning to HHS after serving in senior posts in President George W. Bush's administration. He would head a $1 trillion department with 80,000 employees, responsible for health insurance programs that cover more than 130 million people, drug safety and effectiveness, public health, and medical research.
During the hearing, Azar avoided using the term "Obamacare," which can be taken as a GOP pejorative for the Affordable Care Act. Indeed, he said as secretary he'd work with the ACA. But under questioning from Democrats, Azar acknowledged support for placing limits to federal financing for Medicaid, a major change to safety-net programs.
If confirmed, Azar would be Trump's second HHS secretary, replacing Tom Price, who resigned under pressure after Politico reported he was taking private charter flights at taxpayer expense.