Trump's new pick for the country's top health position is going to the Senate today --  where he'll be grilled about drug pricing

  • President Donald Trump’s new pick for Secretary of Health and Human Services, Alex Azar, is set to answer senators’ questions in a hearing on Wednesday.
  • Azar has drawn criticism, especially from Democratic senators, for his tenure at Eli Lilly.
  • While he was at the company, the price of insulin, a life-saving drug used by people with diabetes, increased by about 300%.

The Senate’s Health committee is holding a confirmation hearing on Wednesday for Alex Azar, President Donald Trump’s pick to lead the Department of Health and Human Services.

Since his nomination, Azar has drawn criticism for his tenure at Eli Lilly. While at the company, the price of insulin, a life-saving drug used by people with diabetes, increased by about 300%.

Within his capacity as HHS secretary, Azar would be responsible for finding ways to decrease prescription drug costs: The Department of Health and Human Services oversees health agencies including the Food and Drug Administration, which regulates pharmaceutical and medical device makers, and the Centres for Medicare and Medicaid Services, which pay for prescription drugs.

“He will be a star for better healthcare and lower drug prices,” President Donald Trump said in a tweet announcing Azar as his pick.

But Azar’s own track record with drug prices is giving Democrats fodder to attack the choice. Even though he’s already served in the department that he’s now being tapped to run, Azar was also a senior executive at Eli Lilly. Lilly is one of three companies that have substantially increased the price of insulin, the lifesaving drug used to treat diabetes. Some of those increases came while Azar was president of the company’s US unit.

Decade of price hikes

Azar worked as HHS deputy secretary from 2005 to 2007 under President George W. Bush.

In 2007, he joined the drugmaker Eli Lilly as a senior vice president of corporate affairs and communications and eventually became president of Lilly USA, according to his LinkedIn profile. He left Lilly in January this year and has since consulted with pharmaceutical and health-insurance companies.

Over the 10-year period when Azar was at Lilly, the price of insulin notched a three-fold increase. It wasn’t just Lilly’s insulin product, called Humalog. The price of a rival made by Novo Nordisk has also climbed, with the two rising in such lockstep that you can barely see both trend lines below. The gains came despite the fact that the insulin, which as a medication has an almost-century-long history, hasn’t really changed since it was first approved.

Insulin prices may 2017 v2Andy Kiersz/Business Insider

Price increases to insulin have put pressure on people living with diabetes who don’t have insurance, or whose insurance plans require them to pay the full price of the medication. It’s led some people living with diabetes to turn to the black market, crowdfunding pages, and Facebook pages to get access to insulin.

What Azar might do about drug costs

It’s likely that should Azar try to do something about drug prices, he might look at taking action against more than just pharmaceutical companies.

Instead, he may target the middlemen who many drugmakers blame for jacking up prices. Lilly, for example, says that that the net price for its insulin Humalog was actually down 24% in the third-quarter of 2016, from the third-quarter of 2015 – because of the complicated system of payments. Azar’s spoken out about this before:

“We’re trying to usher in a golden age of medicines with a payment system that is in its golden years,” Azar said at a Manhattan Institute event in 2016, Bloomberg reported. “That system needs to be retired and replaced. The only way to do that is for every private health care institution, drug companies, insurers, employers, PBMs, hospitals, to work together to create a better way to pay for medicines.”

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