Trump picks a Big Pharma profiteer

November 27, 2017

The latest corporate tool to join the administration is further proof that Trump's promise to "drain the swamp" in Washington was a lot of hot air, writes Laura Snedeker.

DONALD TRUMP has nominated yet another corporate swamp creature, this time to run the agency that oversees public health.

Alex Azar, a former executive and lobbyist for pharma giant Eli Lilly, is Trump's pick to be Secretary of the Department of Health and Human Services (HHS). Former HHS Secretary Tom Price resigned in September amid charges that he had taken private planes costing more than $400,000 instead of using commercial air travel.

HHS contains 11 divisions, including the Centers for Medicare and Medicaid Services (which also runs Obamacare and the Children's Health Insurance Program), the Food and Drug Administration and the Centers for Disease Control.

Azar's nomination follows a Trump administration pattern of filling government posts with private industry executives--like Secretary of State/former ExxonMobil CEO Rex Tillerson and Treasury Secretary/former Goldman Sachs executive Steve Mnuchin. Azar did work at HHS in the Bush Jr. administration, before moving over to Lilly in 2007.

Trump's nominee for Health and Human Services Secretary Alex Azar
Trump's nominee for Health and Human Services Secretary Alex Azar

TRUMP ANNOUNCED Azar's nomination by tweeting that he would be a "star for better health care and lower drug prices." However, as president of Lilly USA, LLC, Azar oversaw dramatic increases in the prices of drugs.

For example, the price of Lilly's major insulin drug, Humalog, grew from an already-outrageous $123 per vial to $255.

Also during his tenure, in 2009, Lilly pled guilty to illegally marketing the anti-psychotic drug Zyprexa (Olanzapine) for off-label (not approved by the FDA) use to treat dementia. The company paid a $1.42 billion fine--the largest criminal fine of any kind in a health care case and the largest criminal fine ever imposed on a corporation in a U.S. court.

Lilly isn't the only company driving up prices of lifesaving drugs: In January, a class action lawsuit accused three drug companies, including Eli Lilly, of conspiring to drive up the prices of insulin drugs--which led patients to ration insulin, use expired insulin, starve themselves or risk death to obtain insulin through treatment at emergency rooms, according to the suit.

Azar, who as HHS secretary would control the bureaucracy that administers the ACA, has said that Obamacare is "circling the drain," and opposes the ACA's expansion of the Medicaid health care program for the poor, which accounted for the largest number of people who gained health care coverage under Obamacare.

Azar also advocates turning Medicaid--which, along with the Children's Health Insurance Program, currently services some 75 million people--into a block grant program administered by the states. This would give individual states more leeway to decide who qualifies and what services to provide--with serious implications for poor people, the elderly, and many pregnant women and children.

The right's war on the ACA is part of a long-standing battle that conservatives have waged against Medicaid and other entitlement programs on the grounds that the free market can provide health care more efficiently.

The increasing cost of health insurance and prescription drugs suggest otherwise. The U.S. spends more on health care than any other country, but gets worse outcomes for life expectancy and deaths from preventable disease, and has fewer hospital beds and lower insurance coverage.

AZAR EXEMPLIFIES the "revolving door" pattern endemic to Washington politics, where government personnel move from agencies that regulate industry into top positions in the very industries they once regulated, and vice versa.

Azar's nomination is also an example of Trump failing to follow through on--or outright contradicting--many of the promises he made during the campaign. He famously promised to "drain the swamp" in Washington with a five-year ban on lobbying--yet the executive order he signed restricts this ban to the staff in the legislative branch, enabling him to hire industry lobbyists like Azar as advisers or nominate them to executive branch positions.

Trump has also claimed that political donations from drug companies to politicians--exactly what Azar was responsible for during his time at Lilly--fuel rising drug costs. Before taking office, Trump said that drug companies are "getting away with murder" and hinted that he would change the way the government bids on drugs to bring prices down. He also criticized drug companies for manufacturing their products abroad and relocating headquarters to countries with more favorable tax policies.

But Trump's long-awaited executive order has been stalled since June--and even if it sees the light of day, it will likely be friendly to the pharmaceutical industry.

According to media reports, the draft doesn't allow government negotiations over drug prices or allow the importation of pharmaceuticals from other countries--two measures that supporters of health care reform have long supported as a minimal measure.

Instead, the draft of the order reportedly focuses on rolling back regulations and targets the 340B program, which requires drug manufacturers to provide drugs at reduced prices to hospitals and other healthcare providers that serve low-income patients.

It will be no surprise to learn that Azar opposes government negotiations over drug prices or drug imports. On the contrary, he has suggested that the U.S. should pressure Europe over its "radical price controls" on the grounds that the U.S. is shouldering the cost of innovation and lower prices in Europe therefore drive up drug prices in the U.S.

Azar isn't the only former Big Pharma insider-turned-Trump administration operator: Joe Grogan, the director of health programs at the White House's Office of Management and Budget who also leads the "Drug Pricing and Innovation Working Group," worked at in the FDA as a policy adviser during the Bush administration before leaving the government to work at Amgen and Gilead Sciences.

Meanwhile, Scott Gottlieb, the Food and Drug Administration commissioner who wants to reduce regulations that he says hinder investment, has financial ties to more than 20 biotech and pharma companies.

Supporters of Azar claim that his laid-back management style and understanding of the HHS bureaucracy make him a competent administrator with the expertise needed to repair relationships with legislators and put Trump's orders--and whatever comes out of the multiple attempts to scrap the ACA--into practice.

SENATE DEMOCRATS have promised to ask tough questions about Azar's drug industry connections. "This confirmation process will be a referendum on the Trump administration's repeated efforts to sabotage our health care system and raise premiums on millions of Americans," Senate Minority Leader Chuck Schumer stated.

But Schumer and the Democrats haven't done nearly enough to earn any credit for defending access to affordable health care for ordinary people.

The Democrats were mainly bystanders during the Republicans' attempt to drive through their plans "repeal and replace" Obamacare--it took opposition from a handful of Republicans, under pressure from grassroots protest, to stop that attack. The Democrats seemed content to let the destruction of Medicaid and ACA go through so they could use the issue to win votes in future elections.

Though Bernie Sanders' proposal for a Medicaid for all system won the rhetorical support of some Democrats, the party leadership's focus is on bipartisan agreements to "stabilize" the health care market--which is at the mercy of insurance companies that can decide whether or not to participate in the ACA.

Obamacare left the private insurance industry's stranglehold over health care access intact--and now, with their attentions increasingly turned toward the 2018 midterm elections, Democrats can't be counted on to oppose an industry that gives so much in political contributions every year.

Rising drug prices need to be understood in this context: The problem isn't "innovation costs" or "lower prices in Europe," but the private, for-profit health care companies that profit off what should be a basic human right.

As Christopher Baum and Alan Maass wrote for earlier this year:

All of the various problems of the U.S. health care system--from insurers pulling out of the ACA exchanges, to underinsurance and high out-of-pocket costs for policyholders, to millions of people still having no coverage at all--could be solved at a single stroke with a national single-payer, "everybody in, nobody out" health care plan.

These problems melt away when health care is no longer something you must pay for, in whole or in part, but something that is guaranteed by the state as a basic human right.

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