02:15 - Source: CNN
Why is health care in the US so expensive?

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Critics worry whether Alex Azar can be effective due to his work at Eli Lilly

The company has been accused of colluding to drive up insulin prices

CNN  — 

President Trump is nominating former Deputy Secretary and Eli Lilly President Alex Azar as new head of the Department of Health and Human Services, tweeting that he will be a “star for better healthcare and lower drug prices.”

The key position has been open since late September, when former Secretary Tom Price resigned amid reports of frequent trips across the country in private planes paid for with taxpayer dollars.

Trump has stressed cracking down on rising drug costs, at one point accusing pharmaceutical companies of “getting away with murder.” However, the choice of a man who helped lead the industry for a decade prompted Democrats and industry observers to wonder how effective – or dedicated – he will be to the President’s agenda.

“We sincerely hope that Secretary-nominee Azar will follow through on the President’s commitment to achieve lower drug prices for all Americans,” the nonprofit Campaign for Sustainable Rx Pricing said in a statement.

“Given Alex Azar’s professional background, there are concerns on whether he can fairly execute any significant effort to lower drug prices for patients & families,” tweeted Sen. Patty Murray of Washington, the top Democrat on the Senate Health, Education, Labor and Pensions Committee.

A decade in Big Pharma

Azar, who left his position as president of Lilly USA in January after an internal shakeup, started with the pharmaceutical giant in 2007 as senior vice president of communications, moving up to vice president of Lilly’s U.S. Managed Healthcare Services and Puerto Rico in 2009 before becoming president in 2012.

During his tenure at the pharmaceutical giant, Azar says, Lilly went off the “largest patent cliff in pharmaceutical history” in which it lost “$4 billion of revenue as it lost patent exclusivity, laid off a large percent of its organization and reorganized repeatedly,” according to the description of one of his presentations for the Worldwide Speakers Group.

It’s also an era of exorbitant price increases by Lilly and big pharmaceuticals. A report this year by Credit Suisse showed that the industry added $8.7 billion in 2016 from rocketing drug prices; Sean Williams, an investor at financial services company Motley Fool, listed Lilly as one of the practice’s major benefactors.

“Eli Lilly has had little choice but to turn to price increases on some of its established therapies, as well as its specialty indications,” Williams said.

Citing data from Bernstein Research, CNBC recently said that the prices of Lilly’s insulin drugs Humalog and Humulin N rose 20.81% in 2014 and 16.96% in 2015, under Azar’s watch.

Sen. Bernie Sanders, I-Vermont, has accused Lilly – along with Novo Nordisk and Sanofi, which also sell insulin products – of collusion to drive up insulin prices.

‘The cost of insulin more than tripled between 2002 and 2013, from $231 to $736 per year per patient,” Sanders wrote on his website in a call-out to the public for their stories on how they cope with the rising cost of the drug. The pharmaceutical companies deny the allegations of collusion; Sanders is calling for a federal investigation.

In March, a class-action federal lawsuit was filed on behalf of 38 individuals against Eli Lilly, Novo Nordisk and Sanofi, citing violations of the Racketeer Influenced and Corrupt Organizations Act, among others.

Staunch conservative

An economist and lawyer by training, Azar clerked for Supreme Court Justice Antonin Scalia in the early 1990s and later worked under Kenneth Starr, the independent counsel on the Clinton Whitewater investigation.

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    Azar also served from 2001 to 2007 as Health and Human Services general counsel and deputy secretary for President George W. Bush, writing on a Yale Law School alumni page that he “wrestled with the question” of taking the job because he had not focused on health care in his career. But, he said, he soon learned that he had found his calling: “to help people around the world live longer, healthier and happier lives.”

    If confirmed as Health and Human Services secretary, Azar would have broad authority over much of the Affordable Care Act, a reality he seemed to embrace during an interview with Bloomberg TV in June.

    “I’m not one to say many good things about Obamacare, but one of the nice things in it is, it does give a tremendous amount authority to the secretary of HHS,” Azar said. “There are still changes that can be made to make it work a little better than it has been.”

    Reaction to the nomination on Capitol Hill was predictably split along party lines.

    “For too long, hardworking, middle-class families have been forced to bear the brunt of Obamacare’s failures,” said Sen. Orrin Hatch, the Republican chairman for the Senate Finance Committee, which will review Azar’s nomination.

    “The leader of HHS will be at the tip of the spear, working to not only right the wrongs of this deeply flawed law but also ensure the long-term sustainability of both Medicare and Medicaid,” Hatch added in his statement. “Mr. Azar has the experience, knowledge and fortitude to take on these daunting challenges.”

    Oregon Sen. Ron Wyden, the ranking Democrat on the Finance Committee, tweeted, “Health care is too personal to be driven by politics. I’ll be asking tough questions. I will closely scrutinize Mr. Azar’s record and ask for his commitment to faithfully implement the Affordable Care Act and take decisive, meaningful action to curtail the runaway train of prescription drug costs.”

    Murray agreed: “The next HHS Secretary must focus on strengthening health care for everyone, rather than carrying out President Trump’s extreme, politically driven, & harmful agenda.”