Transcripts For CSPAN2 Health Human Services Secretary Confirmation Hearing 20180111

You can see the schedule for this term plus a list of all current justices and search all their appearances on cspan. With video on demand, you can watch all the oral arguments weve aired at cspan. Org supreme court. Health and Human Services secretary nominee alex azor testified yesterday at his confirmation hearing about Prescription Drug prices, medicaid and medicare and experience at eli lilly. Tommy thompson and mike leavitt, former Health Secretaries under george w. Bush introduced him to the Senate Finance committee. [inaudible conversations] i think we better get it going. This meeting will come to order. Welcome everybody to this mornings hearing. Today the committeeg. Will consider and examine the nomination of alex azor to save as serve as the secretary of health, one of the most important jobs anywhere in the world. Like to welcome him to the finance committee this morning. Thank you for being here and for your willingness to serve in this important capacity. He certainly has his work cut out foror him. It is a massive, Sprawling Department that oversees trillions of dollars and encompasses all areas of our nation Healthcare System. As a result, if confirmed, his work will impact the lives of every single american. That is a big job. It requires knowledge, experience and most importantly strong leadership. Fortunately our new leadership brings us to the Table Including six years working at the highest level of hhs. During its time he played key rolls inlu implementing new policies including Medicare Part d ander Medicare Advantage program. He was also a leader in hhs response to the anthrax attacks shortly after 911. The monkeypox crisis and hurricane katrina, just to mention a few. If confirmed he will be congresses prior contact on all matters relating to our nations Healthcare System. He will be responsible for the ongoing effort to bring down costs, provide greater access to care and give patients more choices when it comes to coverage. Ar whether were talking aboute. Work to modernize Health Programs like medicare and medicaid to preserve them for future generations, innovating the chip program or reforming the private market, he will be the administrations primary policy driver. Has made clear his intention to address the growing Opioid Epidemic and continues to ravage, that continues to ravage communities across the country including my home state of utah. It is robbing families of loved ones and employers are productive, abled workers andse communities of the safety and security that once enjoyed. This is important to everyone on this committee but reticulated me and other members. I look forward to working with him to figure out how hhs and cms can make improvements to save lives. I coauthored the Patient Access and effective Drug Enforcement act which was recently, others me in relationship to the Opioid Epidemic. This requires hhs to submit a report Congress Regarding obstacles to legitimate Patient Access to controlled substances and issues. [inaudible] the report is long overdue so i would like to impress the importance of getting this report congress so that we can have an opportunity to review and make any necessary changes to the law that may help to turn the tide of this epidemic. Hope to get them to produce this report as soon as possible once confirmed. He has been committed to these believe hisd i records show he is more than capable of leading hhs through these new years. There are some on the committee who have already made up their mind and are committed to opposing his nomination. This is essentially part for the course for the high profile nominees that have come before us, and, as previous cases, none of the attacks are focused on his record, his experience for his qualifications. Instead we are hearing talk about supposedly Revolving Doors and nonexisting conflicts of interest. I believe he is more than capable of responding to his critics on his own. I would like to take a moment to address some of the more prominent attacks referred this far. Opponents claim his work in the pharmaceutical industry has been, where he has been a Senior Executive for the past ten years disqualifies him to serve in this position. I would think my colleagues would want to avoid creating standards for setting new precedents were work in the private sector is somehow a knock against a number. That certainly was not the standard they applied to nominees from the Previous Administration and it should not apply to this one. Mr. Azor is committed to fully committed to all necessary ethics requirements including the trumpet ministration requirement prohibiting nominees for participating in matters involving their former employers and clients for two years after the end of their government service. They are committed to divesting any Financial Holdings that could present a conflict of interest or even the appearance of such a conflict. Were not talking about anything unethical. We are not talking about a nominee attempting to make profit off his position. The private sector, in dealing with the policies and regulations that come from government agencies, in my view our mark in favor of his qualifications. His work in the pharmaceutical industry will give him important insights regarding the impact of policies designed and implemented by hhs. When you add that knowledge and background to the years he spent as a senior official at hhs, you have an extraordinary resume for in hhs secretary. Once again i believe he is more than capable of responding to what has so far been empty criticisms. By any standard he is well qualified to serve as secretary of hhs. My hope is we could have a highly productive hearing and support his nomination in short order. I think you once again for being willing to go through this and to appear here today. I want to thank you again for returning to the call to serve the American People. I personally look forward to your testimony. Before turning to the senator, i would like to emphasize my support for the Childrens Health Insurance Program and my commitment to making sure it gets reauthorized. It is one of the most Important Programs i forked on and got through. Of course with the help of senator kennedy. And others. We have a bipartisan agreement that was reported on the committee and i believe in the long term. Congress has passed patches and fixes but the time for a shortterm solution is over. The chip needs to be extended and i will do all i can to get it done. Families and states are counting on us. I now turn it over to senator wyden. Thank you very much mr. Chairman. I very much appreciate your convening the hearing and colleagues, this is the first time we havee been together since chairman hatch has announced his retirement. I would just like to take a moment, because we talked on the phone to state publicly what i mentioned to you. First, youve always been a gentleman, every member of this body feels that. We know about your passion. We know about your dedication. We know about the fact that youve always had an ear for your colleagues. Often when you and i talk we say wher what are my democratic friends up too. Who should we be listening to. Always there with an ear. And, i would just like to note something that i dont everybody knows, but chairman hatch was a boxer and basketball players know a little bit about endurance. Colleagues, just picture, 40 years in the ring, 40 years a boxer. That is real endurance. I am sure we are going to have other colleagues talk at greater lengths, but since this is the first time weve actually been together publicly, i wanted to note that and also appreciate the fact that you mentioned chip, as you know we have teamed up on this now for quite some time. I would like to think that the fact that we came out of the gate early, moved the house, not all are approaches were bipartisan, particularly as it came to revenue, but n i think we all understand that we have got to get this done and we have got to get it done quickly. The American People said to me during the break, what happened at the end of the year is that the kids got a patch and if you are powerfully iran a Multinational Corporation and you got permanent relief. We are better thann that mr. Chairman. I am looking forward to working closely with you. We have virtual unanimously and getting thisam across the line and ensuring families dont go to bed at night in panic about the prospect of an emergency illness the. Next day. Its critical. I look forward to working with you on that. Now to todays business. The same, trump who said almost exactly a year ago that price hiking Drug Companies with murder away has nominated a Drug Company Executive with a documented history of raising Prescription Drug prices. Mr. Azor is here with the committee, nominated to serve as the v next secretary of health and Human Services. It is my view the issues he will work on, if confirmed, will be defining issues, defining domestic issues in 2018. Thats because the American People heard a lot of promises two years ago about how great their healthcare would be under President Trump and how the era of skyrocketing drug prices was over. Americans are going to want to know, come this november if all those big promises, if all those big pledges they heard in thehe fall of 2016 actually happened. To say the administration hasnt yet delivered would be a wild understatement. Now mr. Azor was the president of the subsidiary from 2012 until 2018. He served on the Steering Committee which gave him a major role over drug price increases for every product marketed in the United States. Now, chairman hatch noted, and i appreciate him doing this because he and i talk about this and focusing on the record, the Public Record so our staff has done a fair amount of homework, and i want to spend some time looking at rthe track record. The price of the bone growth drug used to treat osteoporosis more than doubled on his watch. The price of the drug used to treat Heart Disease more than doubled. The price of the drug used to treat adhd more than doubled. The price of the drug used to treat diabetes more than doubled. These are just some of the drugs that were under his purview as head of the company. He told the committees staff that while he chaired the committee, companies, Pricing Committee, he never, not even once signed off on a decrease in the price of the drug. Now this morning the committee, in my view, is likely to hear from mr. Azor and colleagues about the way things work is. The system that is at fault. Its the system that ought to be blamed. My view is there is a fair amount of validity in that. The system is broken. He was part of that system. Given ample opportunity to providee specific examples as a nominee of how he fixed it. He has come up empty. If he is confirmed, it will be the first time the president and his team broke their promises. A virtual parade has come before this group and promised to uphold the law with respect to the Affordable Care act. Right out of the gate we remember tom price telling us it would be his job to administer the law at hhs, not be a legislator, the track record doesnt look so great because in effect, on day one it sure seems that the sabotage policy kicked in, along with allies in congress, the trump team wasted no time undermining private Health Insurance markets, emphasized private Health Insurance markets. They cut the open Enrollment Period in half, advertising budgets were slashed, it became harder for people having difficulty signing up for coverage to get in person assistance. They attacked a rule that says women have to have guaranteed nocost access to contraceptive. Fortunately there has been a move that has been held up in the courts. Whats been particularly troubling to me, because it goes back to my days as director of thell great panthers, the Administration Made it easier to sell junk insurance that fails people when they havent emergency. All in all thee Trump Administration has made millions of people help care worse and there doesnt seem to be a serious plan to undo the damage. Mr. Azor will have to explain whether he will continue that policy. We talked about in the office yesterday. He should because it stands in stark contrast to what mr. Azor did when he was a member of the Bush Administration to help launch Medicare Part d. He was part of a roadshow and Public Events with local media appearances. When it came to promoting the medicare prescriptionpt drug benefit, which i along with democrats who voted for it, he too would like he was in the grateful dead. Now he is set to join administration and has tweeted less about open enrollment been thanksgiving safety. Now welfare reform is coming up he believes medicaid counts as welfare but everybody asks has a different answer. For what exactly welfare reform means. The Common Thread to the republican talk is pretty obvious. Substantial, jacobian cuts to programs like medicare, medicaid and i Hunger Program support for struggling of families. With respect to medicaid, for millions, this program is at the heart of healthcare in america and it spans generations from newborns to two out of three older people in nursing homes. Today medicaid is built on a guarantee. The trump team says it wants toto end that. Those are public statements. End it. They said motion plans that make it harder for people to get the carege they need. In some cases its older people, sometimes its folks with disabilities. They need longterm care. In other cases its adults of limited means. People who struggle to climb the economic ladder. That is my background so im interested in hearing what he has in mind with respect to seniors. To me, risking the medicaid guarantee so essential for longterm care for the eligible seniors, i want everybody to know thats a nonstarter here. Furthermore, my view is you cant get ahead in life if you dont have your health so endangering the health of lowincome americans, in my view, is the absolute wrong way to go. There are going to be other issues that fall under the welfare on ballot. He has no experience in those areas. I am one who feels people with business backgrounds, those viewpoints can be welcome but its got to be combined with a set of values that are in line with what i believe are the real priorities for the American People. That is my sense of where we are and i would like to wrap up, the leaders on both sides of this committee previously had regular meetings and calls with sitting hhs secretaries. I see him who went out of his way when he was secretary to have those kinds of meetings and a whole host of democratic secretaries did the same thing. Asteld like to just we wrap up that in my meeting yesterday he noted that he wasnt going to go along with the last hhs secretary who broke that bipartisan tradition to the detriment of the senate and in my view good policy and without any prompting he said he was interested in having those kinds of meetings that he would provide himself. Thank you for being here, thank you for our meeting yesterday and we look forward to your statement and questions. Thank you. Thank you. Here to introduce him are to distinguish former secretaries of health and Human Services. First we will hear from secretary thompson. Its nice to see again. Its been quite a while since weve seen you. We had a lot to do with each other way back when. You served as the head of hhs from 2001 to 2005. Prior to that time he served four terms ass the governor of wisconsin. The longest tenure of anybody in that states history. As governor he was pioneer and a number of initiatives including welfare reform which gained national prominence. As a secretary of hhs he oversaw the passage and implementation of Medicare Part d and let the department through the aftermath of september 11, 2001. Next you will hear from a very personal friend of mine and in introduction for my good friend Michael Leavitt who headed hhs from 2,522,009. Before that mike served as the administrator of the Environmental Protection agency for two years, as governor of utah for almost a decade, as governor he presided over some very prosperous times for our state and held a number of National Leadership positions. As secretary of hhs he sounded the alarm about medicares longterm fiscal difficulties. Both secretary thompson and secretary leavitt respected public servic servant spread their opinion should carry quite a bit of weight around here. I know they mean a lot to me. I want to thank you both for being here to speak on behalf of the nomination of mr. Azor. We start with secretary thompson and then secretary leavitt. Thank you very much german hatch. Ranking senator wyden and distinguish members of this committee. I first want to thank you for this opportunity to appear before you this morning. Before i start i would like to echo something that senator wyden said. Mr. Chairman, youve always been a friend, a distinguished member, a mentor to me personally and always a great leader. I feel that todays meeting is somewhat bittersweet for me,i sweet so that i can be here to endorse my colleague, better to find out that you are leaving this body. Thank you for your service to our country, and thank you for being my friend. Thank you. I cannot be more pleased or prouder to introduce my friend and former colleague alex azor. As the president s nominee to be the next secretary of health and Human Services, alex is an outstanding individual with a great family. He has two children, both here as well as his father alex. Im here to provide my strongest personal endorsement and to tell you that he has the capacity, the capability, the intellect to be an incredible secretary. If confirmed he will serve our nation honorably and competently. Im sure you know he has impeccable academic credentials including having graduated from dartmouth andcr yell law school. He isat also a clerk for Justice Antonio scalia on the United States supreme court. I was privileged to have him as my general counsel when i had the honor of serving as hh secretary under george w. Bush. He was an excellent general counsel who developed a deep understanding of hhs, its mission and respect for the rules and laws governing this program. As a result he is deeply respected and passionately respected by the Career Civil Service with whom he worked for at length. From his tenure he went on to serve as deputy secretary of hhs further deepening his experience with his understanding of his department. His important responsibilities in this world class employees and most recently he successfully led a large and important Healthcare Company in this country. But the basis of my recommendation is not just intellect. His leadership experience or the deep understanding of the department which he might lead. He is one of the most important attributes of alex azor is his character. I know from personal experience that he is a very honest, dedicated, passionate and trustworthy. He says what he means any means what he says. He is quite simply a man of great integrity. If the United States senate were to confirm him, the members of this Great Committee would have a outhoughtful partner who truly understands the complexity of our Healthcare System andse Human Services programs and knows how to get things done at the department of hhs. Further, i believe because he wants to take on these challenges, he would work collaboratively with you and would passionately articulate and carry out your wishes. With you to try to find the solutions to the pressing Health Care Problems and find ways forward for our great country. If alex says he willl doca it, i can assure you he will. Mr. Chairman, and all members youhis committee, thank for giving me this opportunity to help introduce alex azor. Thank you. Those words are very strong and very good. German hatch and senator wyden and members of the committee, i join with my colleagues in expressing gratitude and appreciation for your friendship and look forward to the coming year in all that youve accomplished. I join with secretary thompson and want to be completely associated with his comments about alex azor. I too unequivocally recommend that he be recommended as the secretary of the par health and Human Services. He is supremely qualified for that purpose. He will carry out that duty with fidelity. I too, along with secretary thompson feel wellequipped to be able to offer an evaluation of alex azor. Alex was general counsel when i became secretary but subsequently hen was confirmed by the senate of the United States as debbie secretary of hhs. It is a large, very complex federal agency. It not only looks after administering the Healthcare System but looks after all of the Human Services that we jointly, as a country, provide. Hhs oversees the nations Public Health system andnd much of the National Medical and scientific research. It carries outun a significant set of responsibilities related to Disaster Recovery as well as representing analyses of america in various matters around the world. azar auctioned as the coo of the department. I delegated much of the daytoday operations to his supervision. In that role he demonstrated a skill as a collaborative leader. President bush had a president bush had a management agenda to improve the efficiency of the federal government. They had developed a series, almost three dozen, areas of evaluation there were to be graded on a chart that had green, yellow and red. He set a goal to have hhs become the First Department in the federal government to have every measure green. He organized an effort among hhs 27 operating centers and he met that goal first. I am also witness that mr. Lazar is a man of good judgment, a secretary i delegated oversight of the department and the state of full responsibility and a very lawyerly and impartial way he oversaw the rulemaking process andre made recognitionso be a secretary that i learned to have great confidence in. He is a man of good judgment. I have seen mr. As are under fire in reference for and that he is a steady leader in crisis and there was a period during my service when we were managing the recovery of hurricane katria and preparing for what appeared to be a potential pandemic influenza and we were implementing Medicare Part b all at the same time. Mr. Azor was measured, he was responsible, he establish priorities and he accepted responsibility. Should you choose to confirm mr. Azor i want to assure you that you will find him as i did, as an effective indicator. I believe you will see bipartisan medication for mr. Azor. It is his way. His worldclass policy leader, policy thinker, he is a person who brings unique experience private sector, something, i believe, will be immense importance of the next course of the next years. Lastly, i will close with two final observations. The first is alex azor, by my expense, is a very good person. He is a man of compassion which is an attribute in my judgment that is critical in carrying out the Important Mission of hhs. Based on his previous experiences i dont know that there is a person who has ever been nominated as secretary of health was in a position to the ground running like alex azor. He will serve the people of the United States well. Thank you, mr. Chairman. Thank you both, very much. That is high praise indeed, mr. Azor. Return to you right now. We are grateful to the two of you showing up your today and helping us to understand this further. I had a long experience with mr. Azor and i couldnt have higher opinion that i have right now and i am very, very pleased that he has this nomination. Will turn to you mr. Azor for your comments. Thank you very much mr. Chairman. If you wouldnt mind like to introduce my family that is here today. Im joined today by my wife jennifer, my daughter claire, and my son alex, as well as my father doctor alex azor, my sister stacy and her husband, nick. Unfortunately, my mother linda cannot be here today and most tragically my stepmother just passed away last july from cancer. Thank you all to my family members having an opportunity such as this does not happen without Family Support and guidance as all of you know personally. Mr. Chairman, and Ranking Member wyden, thank you for the opportunity to appear before you as the president s nominee to be secretary of health and Human Services. I cannot tell how touched i am to hear the words of the secretaryrd secretary love it ad i thank you both so much for those kind words and for your friendship and mentorship over the last 20 years. I simply cant think of two gentlemen from whom i have learned more professionally and ofsonally in terms leadership than the twowo of you and it means so much to be sitting with you. Never thought that they would happen. Thank you. I also think President Trump for the confidence he has bestowed on me and nominating me for this awesome responsibility. Ninetyseven years ago my grandfather that impoverished teenager who spoke not a word of english stepped out of steerage on the ss argentina, completing his long journey from lebanon to america. As he entered the receiving hall of ellis island he met in individual who was wearing a military uniform. That person possess the power to admit him or to send it back to poverty and uncertainty. That person was a member of the United States Public Health service. Its a testament to all that i love about this country that 97 years after my grandfather went through his 62nd physical on ellis island with no discernible prospects other than the political, economic and religious freedom that america offers his grandson might be in charge of that very same Health Service as well as the other worldrenowned components of the department of health and Human Services. The mission of hhs is to enhance and protect the health and wellbeing of all americans through programs that touch every single american in some way every single day. Through outstanding leaders and career staff hhs is primed to meet thatt challenge. The task is humbling, i will s say. Marshaling in leading the incredible resources of the department require innovating, never being satisfied with the status quo and anticipating and preparing for the future. I hope i gain the skills in the dark days after 911 as we face the health and human consequences of those attacks through the subsequent anthrax attack and preparedness for potential further biological, chemical, radiological or nuclear attacks. In the implementation of our ofcompletely novel part b Prescription Drug benefit for seniors and by helping to build a global, national, state and local pandemic flu preparedness and our response to threats such as sars and monkeypox and our efforts to continue to perform welfare programs and to make them as monarch, responsive and empowering as possible for the individuals and families that we serve and through innovation in the private sector to bring life improving therapies to our people and the people of the world and finally in harnessing the power of data and analytics to make it more efficient and capable of serving our fellow americans. The department the size and scope of hhs it can be difficult to prioritize. Nonetheless shy be confirmed i do envision focusing my personal efforts in four critical areas. First, drug prices are too high. The president has made this clear, so have i. My experience helping to implement part d and with my Extensive Knowledge of how insurance, manufacturers, pharmacy and Government Programs Work Together i believe i bring skills and experiencesnc to the table but can help us to tackle these issues while still encouraging discovery so americans have access to highquality care. Second, we must make healthcare more affordable, more available and more tailored to what individuals want and treatment for those suffering from dependence. These are serious challenges. If confirmed i will work with the super team at hss to deliver results. I think President Trump for this opportunity and i think this committee. They give her a much. You are really thank you ver y much. You are more qualified than most people ive seen. I am pleased that you are willing to sacrifice to come here and help turn this mess around. Let me just ask this question, as you know i have fought hard toextend the chip Program Support the 9 million families that rely on it. I think we will get this done as soon as possible. Will havehappens, hss five years of runway to work with. What should they be doing to bolster chip and ensure its continued success . The Childrens Health Insurance Program is such an important part of your personal legacy and i look forward to the reauthorization so we can secure that program for this year and years to come. It really serves as an important bridge and stable force for the children of our country and i look for to looking into any ideas that you may have in terms of implementation. Anyways that we can make that program more responsive. N. Thank you mr. Chairma particularly, i want to welcome your dad. In maryland and his father is a distinguished physician. I had a chance to work with him when i was in the state legislature so it is good to see that his family is here. The first question i want to ask you is going to be a colloquial one with maryland. That is protecting some of the initiatives out of maryland. Many states have come up with innovative ways to try to open our Health Care System. We just urge you to Pay Attention to these types of initiatives and be understanding that we may need some special attention to preserve this type of access to care. Senator thank you and thank you for this wonderful meeting. Alex if confirmed, i would love to come home to maryland and spend some time with you and learn more about the ireland approach you have my commitment that it confirmed the secretary i will work with you and be a good partner in that. I have all kind of innovation in different approaches as you said and no one entity or person has the right answer and i want to be supportive of you in the state of maryland and what theyre trying to do here. I appreciate that. One of the major a competence under the portable correct facility the office to make it a National Institute of health but establish Minority Health offices in all divisions of hhs. It is important that the secretary get directly involved in these issues and the historic disc relations in our country are well understood. You have your commitment that you will take particular attention to this particular priority to make sure that we do right with Priority Health in america . Thank you for your longstanding commitment in that area. If confirmed, id love to get your ideas and ways that things that we can do to be better in that space. The color of ones skin or sex or where one lives and we ought to be doing everything we can add hhs to ensureouou that peope have the highestquality access to a value care in the United Stateses. I want to talk about one area that the Trump Administration has deviated from previous republican administrations in re imposingio the socalled gag order which deals with services on contraceptives and other areas to mexico city policy. I disagree with this policy and i think it compromises Womens Healthse in america to protect tell that generally but the manner in which this was implemented under the Trump Administration is compromising our ability to work with International Health organizations in dealing with issues from aids and malaria and so many of the other issues in addition to Womens Health issues. Are you willing to take a look at thiss to see a more rational way and again, i disagree with policy to start off with but the way its important now is counterproductive to Global Health priorities and does require some attention of the secretary and input into the way these policies are permitted. Senator, i am not deeply familiar ways in which imitation of mexico city policy change at the beginning of this administration compared to past one and my sense is there were some differences as you mentioned. I want to learn more about that and i would be happy to discuss it with you. I clearly share the overarching views that the United States needs to be deeply engaged with global, Public Health, the rest of the world Health Impacts us and his deputy secretary general counsel was deeply engaged in these issues the leadership of secretary compton and secretary leavitt and so, have to look at that, and learn more about changes that were made in hear from you on that. Thank you. You mention in your Opening Statement about drug prices being too high in this country. We all know that we pay twices the average cost of prescriptions and globally its even more out of step. Tell me how you intend to address this issue of bringing down the cost of Prescription Drugs to consumers in this country particularly in light of your previouss experience . Senator, thank you. I actually hope that from having worked for the last several years in that space it brings knowledge that anyone coming in the secretary this is such a complex area, its a learning curve for any other individual is a high but to know how that system works and the incentives are bring a great advantage to being able to hit the ground running. We need to deal with issues of competition and ensure that we have robust, generic competition, printed competition and i want to ensure we create a very viable and robust by a similar market to compete against Branded Companies in that high cost biologic space so that is critical. I also want to make sure we go after any types of gaming or expectation of exclusivitys or patents by branded Drug Companies. I thoughteses it gets as far as general counsel and Led Development of a rule that changed for the first time regulation that saved 34 billion from patients over ten years and theres no Silver Bullet here. I want to be clear. Is not one action that all of a sudden fixes this. I want to hear ideas from others and the most important thing we have to figure out is can we reverse the incentive on list prices. Theres a lot we need to know about the discounted prices but i want to work this committee and anyone who is smart and thoughtful about can we create incentives that pull down so that when the patient walks in and they need to pay outofpocket to the pharmacy they are not hit with that kind of cost and thats one of the harder issues to solve but im deeply committed to working with you on that. Im sure my colleagues have other questions. Thanks. Thank you can senator. I have some questions i ask all nominees prefer this committee and i havent asked you yet take the time to do that. First, is there anything that you are aware of in your might represent the conflict of interest the duties of office to which you have been nominated . No, mr. Chairman. I will follow the advice of a career designated agent ethics official to ensure that i manage any potential conflicts that come about through the ethics approval of the conversation process. Thank you. Second, do you know any reasons personally or otherwise that would in any way prevent you from honorably discharging responsibilities which have been nominated. No mr. Chairman. Third, do you agree without reservation to respond to any sevens reasonable and testify between committee of congress, if confirmed yes mr. Chairman. Finally, do you permit upon responding to any senator of this committee yes, mr. Chairman. Thank you very much. Will turn to senator grassley now. As i promised you in my office you would know about the questions i was going to ask and i only have two questions. The first one involves the physician payment sunshine act that i worked hard to get past and as part ofan obamacare. The background to my question is in march of 2017 the university of iowa recorded a growing crisis ofep prescription opioid use in over toys in iowa while lower than in some states iowa has seen rates of Prescription Drug deaths quadruple since 1999 and in addition to concern about issues of these drugs i also think its it is written to protect the Patient Access and it needed medications and one strategy to achieve that balance is to ensure that prescribing decisions are made in the best interest of the base and not as a result of inducement to Healthcare Providers by Drug Companies. Recent reports have raised concerns about payments from pharmaceutical companies to Health Professions and the effect on opioid prescribing practices and the bipartisan position payment sunshine act was designed to provide transparency regarding payments to physicians from Drug Companies in this law created the open payment data base at cms and in november senator blumenthal and i wrote a letter to your department thinking for the sport that cms center for programs and care integrity has given. In that letter we further encouraged the prioritization of funding and administration of the open payment database. You may wonder why am asking you this question and for i ask it i would like to ask blumenthal, grassley letter and the university of iowa reports put in the record. Without objection. A year ago i think it was in the omnibus appropriation bill a group of doctors and house of representatives tried to get this legislation and we prevented that. Very simple question to you will you commit to continuing to collect and post the data currently a available on the opn payments website . Yes, senator grassley. Im a huge big supporter of the sunshine act in your work they are and supported it at the time that he first proposed it. I think that transparency is extremely helpful. Yeah, my second and last question since the epipen misclassification fiasco i have focused a lot of my oversight on the Medicaid Drug Rebate Program and found in oversight during the Obama Administration cms did not properly oversee the program causing billions in taxpayer dollar losses and for just the epipen the taxpayers may have lost out on more than 1 billion and its kind of this way. One in seven tenths billion dollars loss but doj recovered 475 billion so one in pretense billion dollar loss and why they didnt go after theey other onei never get an answerio from doj. In december 2017 the hhs Inspector General released a report on the Rebate Program and found that hundreds of drugs were potentially misclassified. For instance, out of a sampling of just ten drugs from 21,222,016 medicaid may have lost pretense buildings in abates and thats just from sampling. Still lost we dont know how many other billions of dollars may have been lost. My question to you, by the way, id like to also add submitted a letter that i have from former cmsve administrators for the record. Without objection. So this question. Theres a lot of taxpayer money at stake here and how you approach fixing the Medicaid Drug Rebate Program so that it is properly overseen and taxpayers loss are kept to a minimum . Thank you. I was concerned to see the media reports and read the report from the Inspector General on the Rebate Program and i will work with administrative burma as well as with cms to ensure that the program is improved to get at that. One of the key issues is to ensure is the regulations and guidance that are clear so as Companies New with her obligation is and if necessary moving into enforcement to ensure that they understand these are obligations that needed to be held up. Thank you. Doing that you can save a lot of money. Rs senator wyden. Thank you, mr. Chairman and mr. Azor i will ask the questions about the price issues and will hold up charts and certainly if you have questions about the charts are being used we welcome your comments during the five years that your president of [inaudible] usa you drink responsibly for pricing strategies of the biomedicine unit. It included the osteoporosis drug [inaudible]. He also chaired the companys us Pricing Committee. Im going to quote from how you describe your role as a related to forteo in a recent statement to the committee and you said to the committee as a chairman for the pricing reimbursement for [inaudible] usa and is a relevant process there was a biomedicine business United States and i approve pricing recommendation for this medicine and that is your quote. During your time in these positionste based on the committees investigative team, the companys annual Financial Report shows that forteo revenue increased 58 reaching 770 in 2016. Each year the companys told shareholders that revenue increased because portales price went up. You have told the finance committee that you were responsible for approving the price of forteo but lets look at the price. This chart that we are holding up shows the wholesale package price of forteo. And your watch is the red line where the line is going up and up and up. The blue line as i indicated is the price for president and the red line is the price while you were president. The price more than doubled on your watch from a little more than 1000 to more than 2700. Thats a 164 increase in five years. The wall street journal recently showed how these price affects affected consumers when the paper did a profile of one older person who was on medicare who paid the 600 of her own money to buy forteo after she broke her back. Mr. Azor this certainly indicates a wholesale price in the United States in fact more your watch. On yes, sir no. I believe that data is directionally correct and i dont have the actual pricing information but i believe that is correct. Okay. Let me take a look now at strattera, thisan is another drg yunder your purview which is ud to treat attention deficit hyperactivity disorder. This chart shows just how the price of the drug changed over the year. Again the price for you became president is blue. The price while you were president was red. This is another big jump in pricing that began shortly based on our investigations after he became president. These were isolated incidences they could be written off, in my view, as an anomaly and it seems like people a have gotten hurt d it would be an anomaly in the companys annual financial sports is during your time Pricing Committee and when you iran that higher prices drove us after drug drugs after drug even when demand for the products felt. One more question in this line of questioning. As chairman of the us Pricing Committee for this company did you ever lower the price ever of a lily drug sold in the United States . Drug prices are too high, senator wyden. I said that and i said that when i was at lily and every incentive that is not the question. Did you ever lower the price . I dont know there is any drug price of a branded product that has ever gone down from any company on any drug in the United States because every incentive in the system is ports higher pricesbe and that is whee we can do things together herking as the government to get at this no one company will pick that system enough i want to be here working with you. Let the record show that when that specific question for mr. Azor was asked when the bipartisan Senate Finance committee was present did he ever lower the price of a lily drug sold in the United States mr. Azor said no. Let the record show that is what we were told and now we will go have to make judgments about how you will approach the issues of helping to shrink pharmacy receipts, you and i talked legislation that i have introduced that would ensure that the consumer got the price reduction at the window. Ive been introduced that legislation so we will probably asked whether you urge the president to support it. Your time is up senator. All save my press my questions for the second round. Thank you. Thank you, mr. Chairman. Thank you mr. Wyden for your quick work in holding this hearing so that we can move the nomination of mr. Azor to the full senate for consideration. The secretary of health and Human Services is ao role that should not sit vacant. There are too many vital priorities and healthcare thatou need immediate attention and i appreciate you moving forward. I also appreciate mr. Azor willingness to serve and in my meeting with you after your nomination i was pleased to get your Top Priorities for your time and secretary confirmed. Appropriately he will be focusing on the affordability of Prescription Drugs and this is something that everyone around asks and hears from constituents about the problem is complex and doesnt have a simple solution but im very encouraged to hear his commitment to taking on this and nobody has real expertise in understanding of the manufacturer side of the equation. I think thatoa is something we need and its something i believe can and should have a bipartisan approach and i hope to hear that commitment from my colleagues here as well. Mr. Azor you have listed in our restated your priorities of drug prices, Insurance Market up ability in choice, working toward a value based system and healthcare and the Opioid Crisis. I completely agree and these are the secretary focus must be and i look forward to working with you to get the job done. Mr. Azor has been for the senate before but i think this environment this time around is obviously very different. Im impressed by his willingness to go through this very difficult process and appreciate his willingness to serve. Toa get to the question wyomings department of health has had a medicaid 1115 waiver application sitting at the center for medicare and Medicaid Services for over two years. Its a tribal uncompensated care waiver and i understand that the waiver is under consideration but i would encourage you, if confirmed, to take expeditious action in making a determination on this longawaited application. This is something that weve discussed before in which i know that you not currently being in the position on it able to comment on but however i would appreciate your commitment to examining this application as quickly as possible. Senator, thank you for raising that and thank you for taking the time to meet with me. I obviously dont know the parameters on the wyoming waiver but it will tell you im concerned about the amount of time you mentioned that it has been pending. I want to ensure that if confirmed as secretary that cms works the state on any of these demonstration projects or waivers as a very good partner and responsive and timely and so if confirmed i will get on that right away looking at that for you with wyoming. Thank you very much. T you also talked about your priorities on drug pricing and that seems to be the topic here and i appreciate your willingness to take on that very serious and completed issue and i proceed the background to bring to that issue. Im sure youre familiar with the announcement on discussions of cms to think differently about how they price the new leukemia drug. I know that is not a finalized agreement and i know there is not at lot of longterm data showing how these arrangements work but it seems to be an interesting approach and one that is worth exploring further. What is your view of value outcomes based contracting in the private sector and the possible applicability to public pairs like medicare . Senator, i think value based or outcomebased contracting around first generally within the Healthcare System but especially with medicines can be vitally important. I also think that some of the regulations and approaches we have within medicare that get in the way of that. I know that when i was doing this inbe the private sector i wanted to be able to put our money where our mouth was in to say if it works pay up, if it doesnt work, take the greater discounts. Some of the rules run government price reporting can actually be in other roles can be a barrier to that. I think there is barely broad subipartisan support to address we can open the door and get real value based pain for value and paper outcomes on these medicines. Quite excited to think that could be important part of how we think about and taxpayers and customers. Thank you. I proceed the expertise you bring but also the record that you have of working in the government in the past. I yield the balance of my time. Senator stepanov. Thank you, mr. Chairman. I want to personally thank you for your commitment on the Childrens Health program and i want to thank you for your leadership of years. Mr. Azor you have indicated welcome, welcome to your family. You have indicated that you hit the ground running and my question is in what direction will you be running . I think thats the question. I share the concerns and i share the concerns about what happened with you were at eli lilly. Ist particular product which so critical for people, obviously with diabetes, from 1996 to 2017 went up seven 100 and during the time that you are at eli lilly and doubled. It doubled in price. Im wondering when you say that drug prices are too high do you agree that the 255 for [inaudible] for one bio and multiple files are needed do you believe that 255 for one bio is it too high . Across the board drug prices are too high including for any product like that. Insolence prices are too high. All drug prices are too high in this country. The increase, as you know, this is what is so bizarre about the way the system is organized that those price increases happen in my former employee who said this publicly, during that same. The net realized price by the company stayed flat and yet the patient is walking into the pharmacy just to cover for increase, patient walks in the pharmacy is observing the cost and thats what i want to try to solve. Well, mr. 28, this was proved to it already would have been done andy i appreciate that you say it is too high and yet in that position with the system you doubled the price so you are taking advantage, certainly, of that system and that was a choice that you had as president which is a concern to me because im assuming. The price of manufacturing the insulin didnt double is that correct . I dont not have the data and i didnt run the diabetes unit at lily so the system it works for those players in the system but it doesnt work for the. [inaudible conversations] lets talk about how to make it work. Id love to. President trump has been back and forth on this but he said in the past that he supports negotiating Prescription Drug prices. Do you believe the government should negotiate Prescription Drug prices . I think where the government doesnt have negotiation is worth looking at so for instance one of the things i talked about is in part the we do significant negotiation pharmacy benefit to get the best rate of any commercial payers and we dont do that in part b which is where we have position administer drugs and retail sale price of 6 or other number and in the interest of time, im not trying to be rude but in the interest of time so you are saying yes to negotiation of alPrescription Drugs. Where we can do so to preserve innovation and preserve access for patients i want to look at anything that will help us with drug pricing and in part b i think we should look at those approaches. So the National Academy of sciences and engineering and medicine has indicated that buyers in the biopharmaceutical sector buyers often appear to be in a weak position with little alternative but to push the drugs and the price and they recommend and they say the effect of not allowing hhs to negotiate prices is to choke the Bargaining Power further in favor of drug manufacturers. Part d as was originally passed basically prohibited and it was on the side of the Drug Companies that you cant negotiate and do you support changing the law so that under Medicare Part d you can ofotiate on behalf of seniors and the American People to bring prices down. Right now negotiation is happening in part d and the best rates are out there. The National Academy they are wrong on that. These are incredibly powerful negotiators who get the best rates. So when they say [inaudible] [inaudible conversations] to get the government to negotiate would have a Single National formulary that restricted access to all seniors for medicines even cbo and that would be the only thing that could change. I dont believe we want to go there in restricting Patient Access. Will the president s commission combating the Opioid Crisis also recommend using Emergency Powers for a lifesaving drug related to the opioid addiction problem and they just recommended that negotiation be used for that lifesavingco drug against opiod addiction. Would you support negotiation for that drug . Senator, i want to look at that situation but if the government is the purchaser and lets say for instance, we will be buying it that is part of the Opioid Crisis program and we are directly buying that is blinded out to state and for suppliers theres nothing wrong with the government in i did that with [inaudible] and secretary thompson during the anthrax attacks. Thereser nothing wrong with wee the purchaser for value or supplying thatin out. I look forward to looking and i need to look at that issue. Thank you. Thank you mr. Azor. Thank you for putting up with the demands of becoming a being involved in public life. I think we all share your priorities flooring the cost of healthcare and i hope that based on this is an industry you can understand and you. Can help us with suggestions about getting those drug prices down. Its incredibly important part of healthcare today and incredibly costly part unfortunately. I look forward to working with you on these issues and we have discussed previously but we have providers in south dakota working to ensure access to care for folks inn rural access and n Indian Country we have a lot of challenges thatt exist. Three years being a Health Services have been found to have a serious deficiencies and quality of care. Pineridge recently lost its ability to bill medicare and medicaid for failing to meet cms standards. This has to change. Ive been working with senator brussels in restoring the accountability to ihs act to give hhs Greater Authority to get ihs back on track. Specifically the bill would give hhs the authority to terminate employees, streamline the hiring process and create incentives for staying on the job. Is this something you would work with congress to achieve . Absolutely. I look forward to getting those additional authorities look forward to any ideas you have. It is unacceptable to not provide highquality service there. I appreciate that and look forward to working with you and your team. As you know, ive been supportive and i shared this finding solutions to address the application of medicare Competitive Bidding rates in noncompetitive bid areas, an issue that south dakota medical women providers report has caused supplier closures and gap and medicare access and hhs was supposed to have issued a report to congress and this came for the cures act on beneficiary acts by january 12, 2017. I am not aware of the report so i request that once confirmed he would work to have that report completed quickly and additionally it confirmed would ask that you commit, will you commit to working with the office of management and budget to quickly approve the interim final rule is provide rural providers that has been pending, as i say should say, the rule is since 2017. Yes, i would be happy. They keep it in the face of the provider shortages southth dakota systems have increased access to care in rural areas for telehealth and you may be aware several senators have been working on the connect poor health act which would further expand the use of telehealth in remote patientnd monitoring and medicare. Importantly, one provision of that legislation would provide secretary of hhs the authority to waive certain restrictions in current law where telehealth would reduce spending or improve quality of care. If confirmed would you support oncongress in acting that provision to provide you the access to provide teleHealth Services. As we discussed in our meeting, im p a big supporter f telehealth in alternative means to providing care especially in rural communities. I think sometimes we can be penny wise, pound foolish in these areas. Thank you. I look forward to working with you and your team as well. You have thehe potential to deliver benefits to those in the country for those who its difficult to get delivery of Healthcare Services in a timely and costeffective way. Thank you for your answers to those questions and we will hold you to them and follow through and look forward to working with once youve officially installed and its a big job that you know with lots of moving parts in challenge but lots of opportunity to make a difference in the lives of people who in this country need access to more affordable Healthcare Services. German, i yield the balance of time. Senator kennedy, senator casey, excuse me. Mr. Chairman, thank you very much. I want to reiterate what senator stepanov said earlier about your service and we commend you for your service in the work youve done over many years in the veterans Health Insurance program ande. I hope we can get that done in the next couple of days and i hope by the 19 but we are grateful for that. Mr. Azor you for putting yourself forward for your service again in the federal government and its good to see your family. You and i have common estate roots, scranton in johnstown but despite those commonalities we have a lot of disagreements on healthcare policy and i want to explore that. First and foremost i appreciate the time you spent in her office going back a couple of weeks ago when were coming for the Health Education Labor Pension Committee of which i am a member and we talked a good bit about how the policy and in particular medicaid which Many Americans appreciated over many years but probably never more so or never with greater urgency then these proposals in my judgment and i think in the judgment of a lot of folks who follow healthcare policy for their whole life a lot of concern that medicaid would have been decimated by some of the proposals the sheer that were put forward. I tend to focus on it not only in a problematic sense but in a people sense when we get letters from families that are very concerned about medicaid. I got a letter last year from pam simpson, from southeastern pennsylvania talking about her son rowan this is letter she sent me back in front, the pictures you can see from where you are but she concluded the letter by making a plea to me to protect medicaid because her son she described in the letter what his life was like for medicaid which we call medical assistance in pennsylvania and how much better it was. All of the treatments and therapies and benefits that he receives. She ended the letter talking about, or as i said pleading with meki to make sure we take steps to protect it. She said we should think of her and her husband and their inability to make ends meet without medicaid. Obviously, to focus on the little boys life with it and the police think of my daughter luna the girl who is younger than rowan and at the time he was only five years old saying that she will have to care for him when we are gone because its his own circumstances. This is the last line of letter she said we are desperately in need of medical assistance and would be devastated if we lost these benefits. That is what one mom said about her family in her own circumstances. I ask you a broad question, if the proposals put forth in all of the public and healthcare bills this year were enacted into law or, i should say, and or if the administrations proposes on medicaid and proposals you support would becomeme law would Rowan Simpson looses medical assistance . St first, as you mentioned from the same state i think we share a lot of the same goals for our people for access to care and access to insurance and access to quality and sometimes we may differ about role of government, size ofet programs, techniques, whatever but we sure that commitment and i share the commitment to the medicaid program. Its a vital Safety Net Program for our books. I dont know that individuals particular circumstances and how they qualify for medicaid but obviously for so many families that is a vital link or bridge to independence eventually or a longterm need for them. If confirmed my job will be to make that program as efficient and effective and responsive and available to everyone as possible. As you know under current law there is no guarantee and as long as you are eligible or i should say some are eligible or have a guarantee by there in the disability soe those with healthcare coverage can s avail medicaid but my question is will that guarantee remain in place not only for children but for adults as well. I think whatever we do in medicaid we have to make sure its doing its job and bring individual like that with disabilities need to be categorically and we have to make suree its funded and supported to do its job. You in the ask context of adults i know were running low on time but if you have an individual who relies upon a Disability Service provider to someone who needs a wheelchair, medical equipment will they continue to get the services . On any type of form those are the situations we have to look at to make sure that we are still able to deliver those individuals. I know we are running on time but ill try to come back in the second round. Thank you. Thank you, mr. Chairman. Ive had the pleasure of getting to know alex azor in his previous roles in government. In fact, when he worked in the bush and ministration at hhs i got to see him in action and i can tell you from personal experience he knows his way around the department and hes got a lot of integrity, a lot of friends and allies here on the hill from his days in those jobs and in fact, you wouldnt know from the comments made today but he has been confirmed twice by the United States senate as a general counsel and deputy secretary. By the way, both times it was unanimous consent. Not a Single Member affected and that is because hes got the experience and got the background and im glad someone with his experienced step forward because frankly, we have a lot of challenges. Is a big, competent department. In our conversations we spoke about the Opioid Epidemic and what i believe can be done and what isay being done and progres has been made in the last couple of years but hhs plays a central role. Right now youre implementing the recovery act through samsara and the cdc and medicaid and medicare and this is all going toto be part of [inaudible] if u should be confirmed. There is an issue that has a specific hhs and i want to get your views on it today. Im notov sure we talked about e specifically inner meaning but thats improving access to care. This is been something that many of us have worked on over the years andli senator durbin and i have a bill called the medicaid care act which would lift this medicaid institutions from mental disease exclusion otherwise known as the ind cap and this is for residential treatment programs, as you know. It is crazy to me that there is a cap of 16 beds on some of the really good, successful residential treatment programs in ohio thatle i have visited ad they turn people away literally because they dont have the ability based on taking medicaid and being involved in the program to be able to have access. It makes no sense. I understand why was put in place the weather trying to fight back against the visualization but i think it needs to change. My question to you would be knowing that cms is trying to be supportive in the 1115 waiver seven accepted and in some cases but there still a lot of restrictions on those. Would you support legislation and it raises the cap from 16 to 40 beds. Would you be supportive of such efforts . As nominee i cant commit but i tell you personally i dont understand the existing restrictions and especially in the face of the Opioid Crisis and the pressing demand and need for treatment for these individuals. I love to work with you on that if confirmed as secretary. I dont get it and i love to work with you on it. I appreciate the answer and again, that is something, i think, you expect me to raise and i know we talked about it not asno much of some of the otr issues in our meeting but prevention treatment side but thank you for that comment and its another reason i think to be good in that job. We need to get that cap raise. We have to pay for it we understand it and we have thoughts onfo how to do that i think its crucial right now in my state and so many other states when we get hit so hard by this Opioid Epidemic. We also talked to on his profession and he talked on that in your comments today to rethink how we approach healthcare in this country paying for good health includes, in my view, providing incentives for better wellness programs. Senator wyden has been a leader on this and weve introduced legislation on the past called the bed of rewards bill which basically says that for Medicare Beneficiaries they would be giving an Incentive Program to be able to help them with whether its Smoking Cessation or Heart Disease or Diabetes Prevention things that overtime will save the government money but mostly to make their lives more healthy so they can live longer, healthier lives. It has worked in the private sector and no question about it. Cleveland clinic ine. Ohio is probably the bestrk case for thats where they put this in place for their own employees and facing enormous improvement in peoples health. Its a modest incentive and i know it works because it works in the private sector and i believe among singers it will work even better. The question for you is senator wyden and i might try to make changes to introduce the legislation because frankly they dont give us the score they should, in my view, but what is your view of this kind of legislation just like when you support it . I dont think its delivered to medicare but medicaid also has an application for this kind of prevention while this program. Senator, i have long been supportive of these types of wellness prevention programs even when i was general counsel and deputy secretary at hhs. As we looked at her own regulations along the bus to enable these types of programs in the first instance and happy to work with you on that. I do think it comes up so often that medicare and medicaid were designed in the 60s to silo and will pay for this and not proof that to now 40 or 50 years later we can be penny wise, pound foolish, as i said before, about what we will cover because it doesnt sit in the category even if its better for the health of people and will save us money. Happy to work with you on that. I appreciate. My time is expired and i look forward to confirmation. Thank you, mr. Chairman. Senator nelson. Thank you, mr. Chairman. Congratulations to you but it is also thank you for four decades of extraordinary service. Thank you also for your personal friendship. Mr. Azor, there is a lot of chatter appear about now we have a trillion and a half dollar full additional budget deficit over the next ten years and that has added to the National Debt and there is a lot of chatter among our republican colleagues that we need to make up for that. Theyre specifically looking at socialcu security, medicaid or medicare under the guise of socalled quote welfare reform. Tell me, do you think it welfare reform that it ought to be medicaid, medicare and Social Security that wouldcu be cut . Im not involved in discussions and im a private citizen and im not involved in what is being translated so not aware of cuts in any way be supported by the administration. So, i am asking you for your opinion. You dont have to comment on what republican senators are saying, your opinion, would you consider in order to make up all this huge budget deficit hole cuttingg medicare, medicaid and Social Security. I will say the president has stated his opposition to the cuts and has said that the pain and i leave hes remained steadfast in his viewsse on tha. Would you advise him to keep his word . Hes kept his word, i would stick with him on keeping his word on that but i dont have the broader context of any discussions going on. Im on the sidelines of this. Hes made a commitment and i will live up to that if confirmed to keep his commitments. Nelson what was the last hhs secretary made some interesting statements about what he preferred. Im curious as to what you prefer. Do you support raising medicare eligibility age . Mr. Azar so i have not voiced support for that. That would have to be considered in the context of everything else. What we have to do, senator, is make sure that medicare is going to be sustainable for our beneficiaries over the long run. I know you agree with that. We need to come up with the right approaches. I, frankly, would like us to run medicare more efficiently and drive value and outcomes but if we stretch the program to make it more sustainable over time, just how we operate that we can resolve that take the broader commercial Healthcare System. Let the record reflect the witness did not reject increasing the medicare eligibility age and i might say if you get out among the people you will run into people that get into their 50s and 60s just holding on for dear life because they dont have any Health Insurance until they get 65 because because then they get medicare. So do you support turning medicare into a Voucher Program . I am not aware of any of those proposals i want to make sure the Medicare Advantage program and i played a role to help launch that is a great option for seniors as they come into the program with high Level Satisfaction so i want to make sure we are doing everything wes can to make sure it is a strong and robust alternative. That is where my energies are. You support closing the donut hole . Closing that but the Affordable Care act did have some funding that actually help Senior Citizens when they arrive at the pharmacy it is up to 75 coverage of the donut hole that yes i am supportive of that. Absolutely. Tell me about medicaid. What is your idea about medicaid . That we have flexibility for states to run those programs in the ways that meet the needs of their senate citizens. So to work with the states with on the ground responsibility we are being a responsive partner looking at flexibilityir. Excellent. Excellent. Your time is up. Medicaid for puerto rico is a block grant and cuts off. We all need to work on that issue. I c agree we need to find solutions. Good morning. Thank you for being here. So beyond drug pricing is Health Insurance cost as well. South carolina four years had 120 increase last year there was an increase with the exchange so there is nood doubt to reign in those prices that theal consumers are impacted by. Er through the section 1332 waivers with the catastrophic plans i have legislation that would allow for the catastrophic plans to cover anyone but one of the things i have often criticized is the design plans are not suitable so what would you do for encouraging americans . In terms of the Affordable Care act. If i am confirmed as secretary i have an important obligation that i am entrusted with what we have now is not working it is not working for the 10 million in the individual market right now. With very high deductible. I want to solve a program for them. Those 28 million that still sit outside that market so can we make those offerings and more attractive to create a better risk pool to help the task the taxpayer and i want to work with states on the 1332 waivers to make that more affordable what they feel that they need. With this your aid crisis there were 64000 deaths related to opioids. That is a crisis and in South Carolina 616 lost their lives at the 9 increase. I would love to hear your commitment not only to address the issue from washington but go to the rustbelt or the places where people are suffering today and create remedies that work better not topdown but bottomup that were created through a collaborative effort moving its way up i would like to hearno you commit not only to running hhs but in West Virginia withh the highest per capita per 100,000 deaths. Like in places of myrtle beach with the highest levels if we understand andhi appreciate this issue we have to do so to put a face on the issue. Are you committed to going to those places with us . Yes. I am a hoosier so i am in the center of the crisis there isnt necessarily a question coming to prevention or treatment programs but we need to get out there to see what is working with different programs so we can replicate to make those available elsewhere. We also tend to think withth Regulatory Authority to drive solutions on this crisis. Your expertise willl be helpful there are a lot of innovative opportunities improving the quality of life in ways that we cannot even imagine ten years ago. I look for us to find ways to find access for those lifechanging opportunities affordable. Looking at drug pricing we have to understand the necessity of nonaddictive alternatives and that pipeline and hope there is a plan in place to the nonaddictive remedies as well that have a deterrent. That is a core area that we try to drive nonaddictive pain treatment therapies that have gotten us into this mess. I join my colleagues to acknowledge and recognize your Great Service to this committee. We will miss you and we appreciate the opportunity to Work Together. You kept me on this committee so i am grateful for that. I know some of my colleagues have been asking about drug pricing. Although there are specific policies to implement i have been concerned in many ways paying for the r d pricing for the r whole world we can make changes but some of this has to be dealt with in trade policies. We pay the highest percentage on drug prices recognizing you bring some experience in this matter with eli lilly so what you think about how we rented down americas cost of drugs . Thanks for raising that question. I have talked about this as a critical issue that europeans canada and japan are not paying their fair share. They started to investyi more through the European Union and the basic primary research and funding but on the commercial side they are not paying more to have social systems with a singleer formulary taking a lead on pricing but we have to do that with the trade agreements and negotiations with the fact they are not paying does not solve that pricing here so that helps relieving the burden abroad. We have to address that here with the measures i talked about and other measures because we will solve thisur at the list price level. But how much more transparency should we have . It seems like it is a mishmash and arbitrary. I am generally in favor of more transparency. We have toma be careful with pricing to make sure it isnt anti competitive or counterproductive but i do think transparency can be part of the solution where the money flows into the system and who gets w the benefit or harm to the consumer. Somebody accepted the premise we had to do r d here that has run thin with me as we see americans bear the burden maybe we need more radical thinking than what we had in the past. I know in your statement you said you shift with health and outcomes but obviously everybody makes those comments one of the things that came out of the Affordable Care act and i hope while that has not been as productive as i would like it is a tool that is useful Going Forward. I agree Going Forward and that would be a very important way to drive this transformation through medicare. We need to pilot and test and generalize. I would hope because too often those on the system are one bring about better efficiency. We actually dont disagree there i believe we need to test that hypothesis and i want to be a reliable partner and collaborative and transparent but if you test that hypothesis it needs to be mandatory to get data then so bee it. Senator isakson and i have been working on a long time is endoflife issues and we made a few steps forward a few years back going in for that console but i would like to get you on the record in terms of recognizing we want to honor and respect peoples choices about Care Planning or endoflife issues. That is a very important part as we think of life in healthcare and family members to engage in that thoughtful and directive planning. Its not about imposing anyones views but respect to enabling that is very important. Mr. Azar congratulations and welcome and im ask you some questions may have been asked because i was down in the Banking Committee going back and forth. So i apologize. I was proud and the last year to work withth my colleagues on this committee working through this bill and as you are aware of, portions eliminated that individual mandate penalty. That Obamacare Mandate the biggest part of the law and the penalty disproportionately affected hardworking americans across the country that are really struggling to get by. So those individuals abilities to make their own choices prevents the federals government from penalizing as individuals so my main question to you as we discussed is where will hhs under your leadership improve or what are you looking for quality and access because clearly with you in this position we need to look at affordability and acces access. Absolutely. What were doing now isnt working for everybody. My job is to. Take whatever i got make it work as best as it can to drive a system that is more affordable. More affordable insurance and more choice that gives access to providers and then insurance that fits their needs stand what i say they should have two work with other states to come up with different approaches. This is very complex. On both sides we all share the goal we want people to have access to affordable insurance. Have you formulated an opinion on the direction from that proposal . With a grand Cassidy Heller legislation the element is very positive to empower states to run their budgets right now the way we run the medicaid system is the matching system if the state comes up with more money things increase from the federal government but also it isnt all their money so they dont exercise level of creativity or stewardship as if they owned 100 so they could be reoriented in a positive way as you could see through grand cassidy helle heller. Talk about access and competition. One of p the proposals is access across state lines. You can get your Car Insurance, Health Insurance except healthcare. You can get a Car Insurance from a lizard in connecticut. Have you advocated for this how do you feel about access across state lines . I know the president has pushed to allow this competition and access i do think this is the next step and the administration agrees. I am supportive of those efforts and frankly it can increase choice. With more options available to patientse and consumers more likely they will find something affordable for them and what works for them. According to the American Medical College more than 100,000 physicians by 2020 so what effort do you anticipate will be needed to cover those shortages . It is a problem we have programs to help with shortages whether the Health Profession program like tuition subsidy and reimbursement is directed to the underserved i love your ideas if you have any how to address that shortage. I did introduce legislation through senator nelson the physician reduction act i hope we have a chance to look at this legislation to allow supporting residency of 15,000 over over the next five years. I appreciate yourw help and yours. Chairmanship. Thank you for your comments and in support of chip you were there at the creation i hope you can convince leader mcconnell who has resisted moving since september and now january. If you can convince him to do the right thing. We will getav it done. 2,164,000 ohio residents died from opioid overdose. Eleven people in my state per day0 youon said if confirmed yr stressing on the epidemic that we are in a state ofof war but will you commit to prioritizing this . Absolutely. We need Stronger Leadership with the president more engage in hhs so will you commit for to protecting the integrity of the medicaidar Program Including expansion . If we look at any type of changes to medicaid the issues of how we address people that are Getting Service under medicaid we have to meet that need. I will stop you there i have heard you use the term ablebodied adults but it is clear the idea for creek requirements have a great deal of thought so does an individual who is diagnosed with severe Mental Illness ablebodied . I dont have a definition in hand but i do share your concern that would seem pretty obvious. You have no definition would that be appropriate to differentiate between and among recipients . Philosophically i would like us to work and our programs to help avoid any types of a cliff of benefits to smooth out those benefits. You can understand our skepticism and concern we hear top elected and appointed officials talk about able bodied adults with medicaid then we realize in my state 2000 people right now are getting opioid treatment because of the Affordable Care act mostly through medicaid. Gentleman and woman in cincinnati said she would not be alive if not for medicaid. Spending six years working at hhs looking at those definitions come if confirmed he would be in charge of regulation that is why we want to know how do you rationalize requiring individual struggling with illness whether cancer or opioid addiction or Mental Illness how you rationalize that to remain eligible . Especially when the requirement is in direct contradiction to the medicaid program. If you consider with someone with cancer . Depression . Please submit your proposed definition to this committee included in todays hearing before we vote on your confirmation. I dont have a proposed definition you are giving me a desire i have not stated i want to work on other ways to make thenio program to be customized to beneficiaries i have never singled out. I dont question your motives but i have sat here to see members of this committee all have insurance provided by taxpayers to strip medicaid as my state have fought to keep medicaid in place and keep expansion in place virtually everybody on the other side has voted to cut Medicaid Eligibility to throw those 200,000 residents getting treatment getting Government Insurance themselves are willing to take it away. I apologize perhaps but excuse my skepticism nobody in your department . Nobody has thought the definition of ablebodied . Then was senator nelsons comments. Now we have to close that whole you go after things that generally conservatives stall like or Unemployment Insurance then what happens to these people . My time is out but i hope you 200,000nk about those people you lived in for part of your childhood how they use their opioid treatment coverage if this administration does what it tried to do earlier. He said President Trump is living up to his promise that he wanted to sign a bill to strip medicaid from those and i just need answers. As a company that you worked at, thank you for your willingness to serve by theai way which was larger . The budget for research and development or advertising . R d was approximately 5 billion out of 20 and revenue. Advertising . I dont know it would have been vastly less than 5 million. Could you get that to me . I cannot get that for you it is proprietary i have been gone now over a year. Overall the cost of advertising has somatically gone up for pharmaceutical companies. America does not know that because you cannot watch an hour of Television Without telling you to ask your dr. What they should prescribe you should american taxpayers subsidize advertising . It canin be helpful to think about a condition they have and assess that with that call to action. I share your concern there is a lot of drug advertising on television and i share that view. I can be thin and happy the one that kills me. [inaudible] it is not so i do not understand why the american taxpayer is subsidizing the gross overuse. Not for peptobismol or over the counter were you need information but to tell your doctor you want it. We have taxes for business expenses and everything we do in business. But i do agree there are a lot of advertising that there is so much of it out there i would like to think of the approach and balance do we have data and isur it working . Its working. They are the most happily advertised and prescribed that is why they see so much money on it but should taxpayers be footing the bill . So withh capitalism you believe in that in freemarket when the most basic tenets is negotiation based on volume. Walmart became the behemoth that they are so you said earlier today every incentive is toward higher prices of pharmaceuticals. Do you believe the negotiation so they do succeed quite well. That is the incentive in your testimony not to lower prices right now. That is unfortunate is not the incentive we have the negotiation to pull down the taxpayer and the individual but that list price. I am aware that goes on behind the curtain and for most folks it is getting more expensive and we do not have the ability of the federal government to negotiate on lower prices based on volume. Actually we do. No we dont. The largest prescription benefit programs get the best net pricing of any commercial payers in the United States. I know that world. So you say there is nohe differencemo in the price if we remove the provision. That is what the cbo have all said you do not get better pricing by removing that. Thatdo is crazy there is something wrong with the system so you tell me if we remove the provision that prohibits negotiating it will not make any difference . There is no provision for negotiating lower prices it is happening right now the government cangh do that make the government can do that directly wouldnt that save us money . There is a middleman now. Doing that negotiation not the government to make they do that better than the government. So you say because it is private sector we should pay somebody because the government cant do it . The techniques that drive net pricing what can we take from the learnings there . Part b which is fish physician administered we play Sticker Price and markup there is no other negotiation so learn how to be under budget with expenses with that they enjoy to have High Satisfaction and if we cang drive prices down there that helps the Senior Citizen because they always pay a percent of that medicare reimbursementtth. I agree on part b but i refuse to acknowledge that the pharmaceutical industry that they lobbied for that. It wasnt the average consumer to make sure it was illegal to negotiate it was pharma they were powerful and they did it i refuse to believe they didnt want that they are for aan reason. In light of your news of your decision thank you for your work on the low Income Housing tax credit to make sure that Program Continues to work costeffectively. Can i make one comment . Having listening to senator browns questioning senator mcconnell is supportive of the ship agreement and our colleagues on the other side will help convince senator schumer to support this ast. Well i have not seen that so far. 2i appreciate your interest to get this done i spoke on the floor yesterday senator schumer came right after me to say he was committed to our legislation and bipartisan legislation. Thank you for that. And obviously and to have continuity and then to cause anxiety. And that expansion is over 600,000 so that expansion to curtail of that medicaidpr expansion . To implemente that program i dont believe any ofrt those proposals cutting the expansion slowing the rate of growth of interest of sustainability. So use support block grant . That or other changes so that you have to figure out that approach what is the amount of money and to have that empowerment to manage those dollars as washington does to be creative to customize the use of the program there is much that can be appealing so to be really clear on this point the proposals my provider has been very clear. Simply a budget mechanism to cut medicaid. The cbo says it will cut one third over the next two decades so this is based on this not based on the politics but whether i am casting a vote. My state will be the first to innovate. So i want to be clear i view those previous proposals on block grants as the community has been made very clear and have said with that kind of approach they expect the private market insurance rate to go back up they see downward pressure given the expansion and they dont want to see those go back up. Do you support the Delivery System reform to get the population to move off of longterm care or communitybased care . As a true way to drive down cost . Sometimes institutional care make sense but alternatives i am completely supportive. What can we do for a faster implementation . If we took a more aggressive approach that is where you see savings. I dont understand it seems so attractive to me so i would love to get your ideas what hhs is doing to get in the way of that i am 100 committed on this issue. To support the move feeforservice to value based . Absolutely one of the core things i would focus on as secretary. Do you support the concept of allowing states to bundle up there low and population . It seems a very attractive notione, how in that transition between Medicaid Eligibility and the subsidy elements i want to learn more but it seems very attractive. Mr. Chairman i have a couple of questions so i wonder if there is any comments about that . This is washington speak but slowing the rate of growth is not in my mind are the president s mind. The state medicaid directors point blank said making for hundreds of billions of dollars and then to put into the record that certainly suggests with respect to rnd because according to these documents with sales and marketing with 5 billion onke r d. That the budgets were not remotely close to each other. The advertising budget that was nowhere remotely close i dont have the Balance Sheet but i cannot speak to that there is no advertising budget you live is remotely close. So let me go to my two questions. One week before the Health Committee that you submitted proposals with the medicaid guarantee. To pick up the tab for two out of three older people. What about the seniors in oregon and each day to wipe out that guarantee by pulling medicaid into our block grant. I would like to know if you still support walking back the medicaid guarantee for these older people with the nonpartisan medicaid directors and no amount of flexibility will compensate for those types of cuts. Would you like to walk back your earlier position with respect to that commitment to those older people who did everything right without a guarantee of nursing home coverage . What we talked about was the fact that block grants i can find appeal now the devil is in the details how you structure that notion with the dollar amounts and what strings are attached in terms of who needs to be covered in who is eligible but not necessary. It looks to me like you still want a block grant that the state medicaid directors say no amount of flexibility can compensate. Talking about Social Security what people know as welfare a hugely Important Program but right now it looks the measure of success is reducing the caseload. I would like a different measure to see if you can work with us on that. Es the measure of success be finding jobs to get out of poverty when you work with democrats and republicans to change the program to not reduce caseloads but finding work . Absolutely. I understand senator casey has one question then we will wrap it up. Mr. Azar i want to ask an additional question regarding the approach the administration hasti taken with regard to implementing the Affordable Care act making the Health Care System work. Its came to my attention about efforts made by the administration to sabotage the care act. A report coming out like restricting enrollment or canceling coverage all type of efforts undertaken to result in pushing to get a document from hhs. Now we are told there is a new document to the acting secretary stating that hhs has developed hundreds of other actions to sabotage healthcare for people nationwide. Please provide the spreadsheet that lists more than 200 regulatory Actions Administration is planning to take that is our request the response said they will not turn that over. You said the following quote mac my job to faithfully implement the program wherever they are including the Affordable Care act to implement as faithfully as possible. So in light of this recent history of sabotage, do you commit to providing that document detailing more than the 200 planned regulatory actions would you provide that and a timely manner . I cannot commit to that as a nominee i not know if that was during the obama or trunk administration but what i can tell you is if i am confirmed i am a problem solver, i will work with you and every member of this committee to make this program work as best i can. Changes are needed and statutory changes are in the way w but make it affordable and make it work. You have my commitment to make i appreciate that but this developed under this administrationnt with proposed 200 actions. It is hard to square your Statement Today with the implementation undermining of the Affordable Care act which is evidence for legislation. But l i hope the American People will have the transparency when it comes to this type of sabotage. Last question. I have questions then first i will go to senator mccaskill. Senator collins and i did a long and thorough investigation on the committee of aging last year. Some really good poster children were hedge funds they sold them ona pennies then spike them have you had a chance to read the report . I have only seen summaries but i do want to look at that for any ideas to work on those issues. Nobody was happier when he was convicted. I havent worked with doctor gottlieb yet but there is an issue of the generic and how can we build more competition there i am very committed. Do you believe the tax system is abused . Yes. Do you believe the orphan drug law is abused . I dont know if i want to say abused because i dont know enough to use that word but i do know that continued exclusivity i want to look at that. Maybe that is what the law provides than that is a legislative question as far as manipulating the loophole. I was there last week and went from zero up at 15000 a bottle and it has been around for decades. Now 15000 on one bottle . I will take you at your word we are all skeptical over here because of what we have been through. I hope it confirmed i can earn your trust and confidence. Drug prices are a huge problem right now. I hope one year from now you wills. Say you proved me wrong mac i hope so. Briefly tell us who is behind you. I am joined by my wife and my daughter and y my son my father who is a doctor when he workedex at dupont when i was a child and my sister and her husband. To set up a Family Services cabinet counsel we focused eight years on the basic Building Block of societys starting with the statewide campaign on teenage pregnancy. One of the highest pregnancy rates in the country to tell us what we ought to do. The team pregnancy rate is lower but it is still too high but the unplanned pregnancy rate is still about 50 . One of the most reliable forms is c long acting reversible contraception about less than 10 in take advantage or intrauterine device and they work. You dont have to stop whatad you are doing and worry about making children or not. What is the policy and economic barriers for this reversible contraceptive . How do we expand access and lower the rate of unplanned pregnancies . Many of them are young people. I am not as knowledgeable there is i would like to be and would like to learn more. I assume we provide that but if there are barriers i would love to learn more. You have studied this more than i have. I like to go after the root cause. The problem in Society People say is poverty. But you take a 16yearold girl in high school who becomes pregnant has a child and drops out of school they are at 80 likelihood they will live in poverty. Same 16yearold makes it to 21 to have a child the likelihood they will end up in poverty is 8 . Laste year massachusetts passed legislation to require Health Insurance plans to cover all forms of Birth Control without costsharing. But do you agree with the agreement all Health Insurance plans should cover all forms Birth Control without costsharing . I have no problems with the states making those choices. That is what they ought to be doing is making their choices how to run their health system. Senator mccaskill is asking . Drug pricing i hope i dont cover the same territory but there with me the Current Administration is tackling those high drug prices several Drug Companies try to address the challenge of the high prices with more Price Transparency for value based pricing with regulatory and statutory barriers so how you bring together those Drug Companies or the pharmacy benefit managers or stakeholders to put together a proposal to be implemented quickly to consumers. It is a great question it is around value based pricing how do we have outcome based one of the Biggest Barriers is price reporting and it has to dodo over time because you strike an agreement and pay for drug here but it could be several quarters later until you get the results and you have a change on past price reporting which is viewed as a good thing. This is within the jurisdiction to address that to create a pathway put your money where the mouth is then then pay more rebates in return. I think this is very actionable. Ha i want to commend those who sat there with you at the beginning of the hearing. Two of myve favorite people you cannot have two finer people sitting next to you. And behind you as well. My wife has retired from dupont working there almost 35 years ago. Congratulations. We finally got to the end. Without very elevated testimonies no question in my mind of your confidence and your ability to handle this very, very importantnt job. Of all the times in the Senate Working with hhs and i have to say you are one of the best Public Servants i have seen in the whole time i have been here. You handled yourself very well in front of this committee and hopefully we can get you up there as it is we can. Welcome to your family and thank you for sitting for this i will come back to say hello and god bless and we will recess until further notice and we will recess until further notice. [inaudible conversations]. [inaudible][inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] sundances failed q a, author aj being with his book, the accidental president. As truman in the form is the change the world. Roosevelts funeral was on saturday and sunday. Shuman was terrified to give the speech. He talked about the night before that he would not mess it up. He climbs the four stairs looks out sees his wife and crowd and is crying. Shes crying because roosevelt is dead in the nation is in shock. She never wanted to be first lady and she is right for him. Meanwhile, he has to get up there and inspire confidence in his administration in the whole world. The whole world has to understand that america will continue. The war will continue. The cspan bus continues his 50 capital store this month with stops in raleigh, columbia, atlanta, and montgomery. On each visit will speak with officials during our live washington journal program. Janice wednesday at 9 30 a. M. Eastern for stop in raleigh north carolina. Next on cspan2, here former white house communication officials talk about their experiences working with former president s in the Trump Administration relations with the press. This is about one hour