Over the next several weeks, it is anticipated that the White House will roll out its recommendations for reducing drug prices. For the millions of Americans struggling with medical costs, this proposal could determine whether or not they will be able to afford life saving drugs. The Department of Health and Human Services (HHS) is responsible for developing the administration’s drug price policy.
Given the significance of this issue, it is critical that the American people have confidence that the proposed changes are based on sound policy. This is why my organization, Campaign for Accountability a nonprofit, nonpartisan watchdog group focused on public accountability, called on ethics officials at HHS to open an investigation into HHS Secretary Alex Azar and his relationship with his former employer, the pharmaceutical manufacturing giant Eli Lilly.
{mosads}Notably, between June 2007 and January 2017, Secretary Azar worked for Eli Lilly, serving most recently as the company’s president. While at the company, Sec. Azar championed the pharmaceutical industry’s goal of limiting the ability of pharmacy benefit managers (PBMs) to negotiate rebates. Drug companies, including Eli Lilly, have long complained that the rebates drive up drug prices and put money into the pockets of PBMs.
Shortly after Sec. Azar joined the Trump administration, Eli Lilly called on HHS to limit the rebates that drug manufacturers are forced to negotiate with PBMs Notably, it appears, Sec. Azar may have authored the administration’s “blueprint” to reduce prescription drug prices — a plan that specifically cites PBM rebates as a chief cause of high prescription drug costs.
On July 18, 2018, HHS essentially acceded to the drug makers’ demands and submitted a proposed rule to OMB that would drastically reduce PBM rebates. The text of the rule has not been released, but it appears that Eli Lilly would greatly benefit from the new regulation.
If Sec. Azar contacted Eli Lilly or worked with the company’s representatives to curb PBM rebates, he may have violated Executive Order 13770: Ethics Commitments by Executive Branch Employees, issued by President Trump on January 28, 2017, which prohibits presidential appointees from working with their former employers on government business for two years after joining the administration.
In response to CfA’s request for an investigation, HHS responded only that “as required by the Ethics Pledge, [Sec. Azar] does not participate in any particular matters where his former employer is a party to the matter, or a party representative.” Notably, the agency did not deny that Sec. Azar may have met or spoken with company representatives.
As a result, to ascertain definitively whether or not the secretary has communicated with anyone from Eli Lilly, CfA filed a FOIA request with the agency for records of contacts between his office and the company.
CfA is not alone in its concern about the relationship between Sec. Azar and Eli Lilly. Members of Congress also have questioned Sec. Azar’s motivation for supporting the new rule. On August 17, Sens. Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.) sent a letter to Sec. Azar asking whether he had worked with Eli Lilly to limit PBM rebates. Additionally, earlier in August, Sen. Orrin Hatch (R-Utah) and Rep. Greg Walden (R-Ore.) sent a letter to OMB Director Mick Mulvaney calling for a “transparent, open, and deliberative process” before changing regulations with such a far-reaching impact on patients, federal programs, and taxpayers.
Regrettably, it seems that high-level Trump administration officials have a track record of operating in their own, rather than the public’s interests. Former HHS Secretary Tom Price and EPA Administrator Scott Pruitt were forced to resign as a result of their own ethical lapses and other cabinet secretaries including Commerce Secretary Wilbur Ross and Interior Secretary Ryan Zinke remain under investigation.
Last year, during a Cabinet meeting, President Trump said drug companies are “getting away with murder,” in part because of the extent of their political influence in Washington. He’s right. This is exactly why HHS must investigate whether Sec. Azar has been in cahoots with his former employer, which stands to benefit dramatically if this new regulation is implemented.
Daniel Stevens is the executive director of Campaign for Accountability, a government watchdog in Washington.