HHS nominee Azar open to price negotiations for Part B drugs



Negotiating Medicare Part B drug prices could be on the agenda if Alex Azar, President Trump’s nominee to run the Health and Human Services department, gets confirmed.

“I think where the government doesn’t have negotiation, it’s worth looking at that,” Mr. Azar said at his confirmation hearing before the Senate Finance Committee on Jan. 9. “In Part D, we do significant negotiation through pharmacy benefit managers that get the best rates of any commercial payers. We don’t do that in Part B. ... We basically pay sales price plus 6% or some other number. ... In Part B, we should be looking at those approaches” to price negotiations.

Mr. Azar added that in specific cases, such as when the government buys naloxone for use by first responders, “there is absolutely nothing wrong with the government negotiating that.”

The tone at Mr. Azar’s confirmation hearing generally was more conversational and less adversarial than that of his predecessor, Tom Price, MD, although contentious exchanges did occur, particularly around drug pricing.

“Across the board, drug prices are too high,” said Mr. Azar, who previously was president of Eli Lilly’s U.S. operations. “This is what is so bizarre about the way this system is organized that those price increases happen and ... during that same period, the net realized price by the company stayed flat. So just to cover for increased rebates, the patient who walks into the pharmacy whose insurance may not be paying for that is absorbing that cost and that is what I want to work with you to try and solve.”

Echoing comments made at a courtesy hearing before the Senate Health, Education, Labor and Pensions Committee on Nov. 29, Mr. Azar suggested the need for patent reform to push generic competition as a price-lowering tool.

The cordial tone to the hearing does not guarantee bipartisan support for Mr. Azar’s confirmation.

Sen. Maria Cantwell (D-Wash.) made it explicitly clear that her vote would be based on Mr. Azar’s thoughts about Medicaid expansion and on Mr. Azar’s suggested use of block grants “in the interest of sustainability.”

Regarding Medicaid, Mr. Azar sidestepped questions related to requiring “able-bodied” recipients to work.

“I don’t have a definition [of able-bodied] in hand,” Mr. Azar responded to Sen. Sherrod Brown (D-Ohio). “It would be something we’d work on with Congress.”

“You have no definition of ‘able-bodied adult’ that would be appropriate for differentiating between and among Medicaid recipients that you can share with us?” Sen. Brown replied, to which Mr. Azar had no specific answer.

Mr. Azar testified that said he was “a big supporter of telehealth and alternative means of providing care, especially in rural communities. I think sometimes we can be penny-wise [and] pound-foolish in these areas.”

Mr. Azar also voiced support to wellness incentive programs.

In the area of insurance access and premiums, Mr. Azar said that, as secretary, “I [would] have a very important obligation to make whatever program that I am entrusted with work as well as possible. What we have now is not working for people. It is not working for the 10 million who are in that individual market right now. For many of those people, it can be a false insurance card. It can be insurance, but a very high deductible or not having access to providers, so it’s unaffordable use of care. I want to solve the program for them,” as well as for the 28 million who are not in the individual market, to make it more affordable for all.

Regarding the contentious Center for Medicare and Medicaid Innovation, Mr. Azar voiced support of its use of mandatory participation demonstration projects and said that, depending on the circumstance, sometimes the use of mandatory participation is necessary to test out ideas, and if it is, he said, “so be it.”

Mr. Azar said he was interested in learning more about ensuring access to long-acting reversible contraception. He declined to answer questions on this because of his lack of knowledge but said he wanted more information.

A committee vote on Mr. Azar’s nomination had not been scheduled at press time. Should the committee support him, the full Senate would then consider his nomination.

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