Transcripts For CSPAN3 Health Human Services Secretary Confirmation Hearing 20180109

Nomination of mr. Alex azar to serve as secretary of health and Human Services, one of the most important jobs in any government anywhere in the world. Id like to welcome mr. Azar to the finance committee this morning. I want to thank you for being here and for your willingness to serve in this important capacity. Mr. Azar certainly has his work cut out for him. Health and Human Services is a massive, Sprawling Department that overseas trillions of dollars in spending and liabilities and encompasses all areas of our Nations Health care system. As a result, if confirmed, mr. Azars work will impact the lives of every single american. Now, thats a big job. It requires knowledge, experience, and, most important, strong leadership. Fortunately, our nominee brings all of this to the table having nearly two decades of experience in the health care sector, including about six years working at the highest levels of hhs. During his time at hhs, mr. Azar played key roles in implementing new policies including Medicare Part d and the Medicare Advantage program. He was also a leader in hhss responses to the anthrax attacks shortly after 9 11 the sars and monkeypox crisis and Hurricane Katrina just to mention a few. If confirmed, mr. Azar will be congresss prior contact on all matters relating to our Nations Health care system, he will be responsible for the ongoing effort to bring down costs, provide greater access to care and give nations and patients more choices when it comes to coverage. Whether were talking about work to modernize programs like medicare and medicaid in order to preserve them for future generations, innovating the chip program or reforming the private market mr. Azar will be the administrations primary policy driver. He has made clear his intentions to address the growing Opioid Epidemic and continues to ravage that continues to ravage communities across the country, including my home state of utah. This crisis is robbing families of loved ones, employers of productive enabled workers and communities of the safety and security they once enjoyed. This is important to everybody on this committee but particularly to me. I look forward to working with mr. Azar to figure out how hhs and cms can make improvements to save lives. As many know, i coauthored the ensuring Patient Access and effective Drug Enforcement act which has recently come under scrutiny. This law requires hhs to submit a report to Congress Regarding obstacles to legitimate Patient Access to controlled substances and issues with diversion of controlled substances. The required report is long overdue so today id like toism press upon mr. Azar the importance of getting this report to congress so we can review and make changes in the law that may help to turn the tide of this epidemic. I hope to get the commitment to reduce and release this report as soon as possible once hes confirmed. He has expressed his commitment to succeeding in these important endeavors and i believe his record shows that he is more than capable of leading hhs through these new or next few consequential years. Of course there are some on the committee who have already made up their mind about mr. Azar and are committed to opposing his nomination. This is essentially par for the course for the highprofile nominees that have come before us under this administration and as previous cases none of the attacks leveled at mr. Azar focused on his record, his experience or his qualifications. Instead were hearing talk about supposedly Revolving Doors and nonexisting conflicts of interest. Well, i believe mr. Azar is more than capable of responding to his critics on his own, id like to take just a moment to address the more prominent attacks weve heard thus far. Opponents of this nomination have claimed mr. Azars work in the pharmaceutical industry where hes been a Senior Executive for the past ten years disqualifies him to serve in this position. I would hope that my colleagues would want to avoid creating standards or setting new precedents where work in the private sector is somehow a knock against a nominee. That certainly was not the standard they applied to nominees from the Previous Administration and it should not apply to this one. Mr. Azar has committed to fully adhering to all necessary ethics requirements, including the Trump Administrations requirement prohibiting nominees from participating in matters involving their former employers and clients for two years after the end of their government service. In addition, he has committed to divesting any Financial Holdings that could present a conflict of interest or even the appearance of such a conflict so were not talking about anything unethical. Were not talking about a nominee attempting to unduly profit off this government position. Experience in the private sector in dealing with the policies and regulations that come from Government Agencies is, in my view, a mark in favor of a nominees qualifications. Mr. Azars work in the pharmaceutical industry will give him important insights regarding the impact of policies designed and implemented by hhs and when you add that knowledge to the years he spent as a senior official at hhs you have an extraordinary resume for an hhs secretary. Once again, i believe mr. Azar is more than capable of respond ing to what have so far been empty criticism. By any objective standard, mr. Azar is well qualified to serve hhs. My hope is we can have a hearing today and report his nomination in short order. I want to thank you once again mr. Azar for being willing to go through this and to appear here today. And i want to thank you again for returning to the call to serve the American People. I look forward to your testimony. Before turning to senator wyden i would like to reemphasize my support for the Childrens Health Insurance Program and my commitment to making sure it gets reauthorized. I got that through with the help of senator kennedy and others. We have a bipartisan agreement that was reported out of committee and i believe it improves c. H. I. P. For the longterm. Congress has passed patches and fixes but the time for shortterm solution is over. Chip needs to be extended by january 19 and ill do all i can to make sure we get it done. Children and their families are counting on us. With that, i turn to senator wyden. Thank you very much, mr. Chairman. I very much appreciate your convening the hearings. This is the first time weve been together since chairman hatch has announced his retirement and i would just like to take a moment, because we talked on the phone, to say 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 you say what are my democratic friends up . Who should i be listening to . Youre always there with an ear and i would just like to note something i dont think Everybody Knows but chairman hatch was a boxer and basketball players know a little bit about endurance. But colleagues, just picture 40 years in the ring, 40 years a boxer. That is real endurance. Im sure well have other colleagues but since this is the first time weve been together publicly mr. Chairman i want to note that. I also appreciate the fact that you mentioned c. H. I. P. As you know we have teamed up on this now for quite some time. I like to think that the fact that we came out of the gate early moved the house. They didnt follow all our approaches to being bipartisan, particularly as it came to revenue, but i think we all understand that we have got to get this done and weve got to get it done quickly. And the American People said to me during the break what happened at the end of the year is the kids got a patch. And you were powerful, you ran a multinational corporation, you got permanent relief. Were better than that. Mr. Chairman, i just want to say im looking forward to working closely with you. Weve got virtue unanimity in this committee with respect to c. H. I. P. And getting this across the finish line and ensuring families across this country dont go to bed at night in near panic about the prospect of an emergency illness the next day is critical. So i look forward to working with you on that ch. Now to todays business. The same donald trump who said almost exactly a year ago that price hiking Drug Companies were getting away with murder has nominated a Drug Company Executive with a documented history of raising Prescription Drug prices. Mr. Alex azar is here with the committee nominated to serve as the next secretary of health and Human Services. Its my view the issues hell work on the confirmed are going to 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 health care would be under a 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 the fall of 2016 actually happened. To say the administration hasnt yet delivered would be a wild understatement. Now mr. Azar was the president of eli lillys u. S. Based subsidiary lilly usa from 2012 to 2017. He chaired its u. S. Pricing Steering Committee which gave him a major role over drug price increases for every product lilly marketed in the United States. Now, chairman hatch noted and approaeciate 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 home work on it and i want to spend time looking at the track record. The price of lilys bone growth drug forteo used to treat osteoporosis more than doubled on mr. Azars watch the price of effient more than doubled. The price of a drug used to treat adhd more than double. The price of humalog used to treat diabetes more than doub d doubled. These are some of the drugs under mr. Azars purview are. Similarly, mr. Azar said while he chaired the companys Pricing Committee he never, not even once, signed off on a decrease in the price of a drug. This morning the committee is likely to hear from mr. Azar and colleagues that thats the way things work, its the system thats at fault, its the system that ought to be blamed. My view is theres a fair amount of validity in that. The system is broken. Mr. Azar was part of that system, given ample opportunity to provide specific examples as a nominee of how hed fix it. Mr. Azar has come up empty. If mr. Azar is confirmed it wont be the first time the president and his Health Care Team broke their promises, a virtual parade of Trump Health Care officials came before this committee and the Health Committee 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 there 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. Emphasize, 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 inperson assistance. They attacked a rule that says women have to have guaranteed no cost access to contraception. Fortunately, thats been a move thats been held up in the courts. And whats been particularly troubling to me, because it goes back to my days when i was director of the gray panthers, the Administration Made it easier to sell junk insurance that fails people when they have a healthy emergency. All in all, the Trump Administration has made millions of Peoples Health care worse and there doesnt seem to be a serious plan to undue the damage. Mr. Azar will have to explain whether he will continue that policy. We talked about in the the Office Yesterday and he should because it stands in stark contrast to what mr. Azar did when he was a member of the Bush Administration to help launch Medicare Part d. He was part of a bus road show and public events, local media appearances so when it came to promoting the medicare Prescription Drug benefit which i was one of the democrats who voted for it he toured like he was in the grateful dead. Now hes set to join an administration thats tweeted less about open enrollment than about thanksgiving safety. Finally, theres been a lot of talk about welfare reform coming up. Mr. Azar told me he believes medicaid counts as welfare but everybody asked seems to have a different answer for what exactly welfare reform means. The Common Thread to the republican talk here is pretty obvious substantial draconian cuts to programs that are lifelines medicare, medicaid, Social Security, antihunger programs, support for struggling families. With respect to medicaid, for millions this program is at the heart of health care 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 to end that. Those are public statements, end it. Theyve set in motion plans that make it harder for a lot of people to get the care they need. In some cases its older people, sometimes its folks with disabilities who need longterm care. In other cases, its adults of limited means, people who struggle to climb the economic ladder. Thats kind of my background so im interested in hearing what mr. Azar has in mind with respect to to seniors. To me, risking the medicaid guarantee, so essential for longterm care for eligible seniors, i want everybody to know thats a nonstarter here. Further more, 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. So there are going to be other issues that fall under the welfare umbrella, mr. Azar has no experience in those areas. Im one who feels that people with business backgrounds, those view points can be welcomed. But its got to be combined with the set of values that are in line with what i believe are the real priorities for the American People. So thats why sense of where we are and id like to wrap up this way, mr. Chairman. The leaders on both sides of this committee previously had regular meetings and calls with sitting hhs secretaries. I see mr. Levitt who went out of his way when he was secretary to have those kinds of meetings and Sylvia Burwell and a whole host of democratic secretaries did the same thing. I would like to just note as we wrap up that in my meeting with mr. Azar yesterday he noted that he wasnt going to go along with the last hhs secretary who broke that bipartisan tradition. To the democrat detriment of the senate and mr. Azar said he was interested in having those kinds of meeting that he would revive so mr. Azar, thank you for being here. D here to introduce mr. Azar are two distinguished former secretaries of health and Human Services. Well first hear from former secretary thompson. Its really great to see you again. Been quite a while since ive seen you. We had a lot to do with each other way back when. But you served as the head of hhs from 2001 to 2005. Prior to that time he served four terms as the governor oif wisconsin. The longest tenure of anybody in that states history. As governor he was pioneering a number of initiatives including welfare reform which gained national prominence. As secretary of hhs, he saw the implementation of Medicare Part d and led the department through the aftermath of september 11, 2001. Next, were going to hear from a very personal friend of mine, both are friends. Well hear an introduction from my good friend former secretary micha Michael Leavitt who headed hhs from 2005 to 2009. 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 had 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 are well respected Public Servants. Their opinion should carry quite a bit of weight around here. I know they mean a lot to me, ill tell you that. I want to thank you both for being here to speak on behalf of the president s nomination of mr. Azar. Well start with secretary thompson and then well hear from secretary leavitt. Secretary thompson . Thank you very much, chairman hatch, ranking senator wyden and the distinguished 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 and i feel todays meeting is somewhat bittersweet for me. Sweet so i can be here to endorse my colleague, bitter to find out that you are leaving this august body. Thank you for our office and being my friend. Thank you. I could not be more pleased or prouder to introduce my friend and former colleague alex azar. As the president s nominee to be the next secretary of health and Human Services, alex is an outstanding individual with a great family, his family jennifer, his two children are both here as well as his father alex and im near provide my strongest personal endorsement and to tell you he has the capacity, the capability, the intellect to be an i credible secretary. Is if confirmed, alex will serve our nation honorably and competently. As im sure you know, alex has impeccable academic credentials including having graduated from Dartmouth College and yale law school. The only thing ive got against him is that he didnt go to the university of wisconsin. Hes also a clerk for Justice Antonin Scalia of the United States supreme court. I was privileged to have him as general counsel when i had the honor of serving as hhs secretary under george w. Bush. Alex was an excellent general counsel who developed a deep understanding of hhs its mission and respect for the rules and laws regularly in governing this progr program. As a result he deeply respected and passionately was respected by the Career Civil Service with whom he worked for and led. From his tenure as general counsel he went on to serve as deputy secretary of hhs, further deepening his experience with the understanding of his departmen department, its world class employees, and most recently he successfully led a large and Important Health care company in this country. But the basis of my recommendation is not just alexs intellect, his leadership experience or the deep understanding of the department which he might lead, he is oone most important attributes of alex azar is his character. I know that personal experience that he is a very honest, dedicated, passionate, and trustworthy. He says what he means and he 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 thoughtful partner who truly understands the complexity of our Health Care System and 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 and with you to try and find the solutions to the pressing Health Care Problems and find ways to improve it for our great country. If alex says he will do it, i can assure you that he will. Chairman and all members of this committee, thank you for giving me this opportunity to help introduce alex azar. Well, thank you. Those words are very strong and very good. Governor leavitt . Secretary leavitt. Chairman hatch and senator wyden, members of the committee, i join with my colleagues in expressing gratitude and appreciation for your friendship, senator, and look forward to the coming year and all that you accomplish. I join as well with secretary thompson and want to be completely associated with his comments about alex azar. I, too, unequivocally recommend that he be confirmed as the 24th secretary of the department of health and Human Services. He is supremely qualified for that purpose and he will carry out that duty with fidelity. I, too, along with secretary thompson, feel well equipped to be able to offer an evaluation of alex azar. Alex was general counsel when i became secretary, but subsequently he was confirmed by the senate of the United States as deputy secretary of hhs. As has been related, hhs is a large, very complex federal agency. It not only looks after administering the Nations Health care system but also looks after all of the Human Services that we jointly as a country provide. Hhs oversees the nations Public Health system and much of the national, medical and scientific research. It carries out a significant set of responsibilities related to Disaster Recovery as well as representing the United States of america in various matters around the world. As deputy secretary, mr. Azar functioned essentially as the chief operating officer of the department. I delegated much of the daytoday operation to his supervision. In that role, he demonstrated the skill as a collaborative leader. Ill cite an example. President bush had a management agenda to improve the efficiency of the federal government. They had developed a series, almost three dozen, different areas of evaluation that were to be graded on a chart that had green, yellow, and red. Mr. Azar 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. Im also witness that mr. Azar is a man of good judgment. As secretary, i delegated oversight of the departments administrative rule making responsibility. In a very lawyerly and impartial way he oversaw the rule making process and made recommendations to me as secretary that i learned to have great confidence in. He is a man of good judgment. Ive seen mr. Azar under fire. Its been referenced before. He is a steady leader this crisis. There was a period during my service when we were managing the recovery of Hurricane Katrina, we were preparing for what appeared to be a potential pandemic influenza and we were implementing Medicare Part d all at the same time. Mr. Azar was measured yet he was responsible, he established priorities and he accepted responsibility. Should you choose to confirm mr. Azar i want to assure you that you will find him, as i did, as an effective communicator. I believe you will see bipartisan communication from mr. Azar, it is his way. He is a world class policy leader, a policy thinker, he is a person who brings unique experience from the private sector, something that i believe will be of immense importance over the course of the next years. And lastly ill close with two final observations, the first is alex azar by my experience is a very good person. He is a man of compassion which is an abtribute 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 whos in a position to hit the ground running like alex azar. He will serve the people of the United States well. Thank you, mr. Chairman. Thank you both very much. Thats high prize, indeed, mr. Azar and well turn to you right now. And were grateful to the two of you for showing up here today and helping us to understand this even further. Ive had long experience with mr. Azar. I couldnt have a higher opinion than i have right now and im just very, very pleased hes had this nomination. Well turn to you, mr. Azar, for your comments. Thank you very much, mr. Chairman. If you wouldnt mind, id like to introduce my family thats here today. Im joined today by my wife jennifer, my daughter claire, and my son alex as well as my father dr. Alex azar, my sister stacy and her husband mick. Unfortunately, my mother linda couldnt be here today and, most tragically, my stepmother wilma passed away just last july from cancer. Thank you all to my family members. Having an opportunity such as this simply does not happen without Family Support and guidance as all of you know personally, im sure. Mr. Chairman and Ranking Member wyden and members of the committee, 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 you how touched i am to hear the words of secretary thompson and secretary leavitt. Thank you both so much for those kinds words and for your friendship and mentorship over the last 20 years. I simply cant think of two gentlemen for whom i have learned more professionally and personally in terms of leadership than the two of you and it just means so much to be sitting here with you. I never thought that day would happen. Thank you. I also thank President Trump for the confidence hes bestowed on me in nominating me for this awesome responsibility. 97 years ago, my grandfather, an impoverished teenager who spoke not a word of english stepped out of steerage on the s. S. Argentina completing his long journey from lebanon to america. As he entered the receiving hall of ellis island, he met an individual wearing a military uniform. That person possessed the power to admit him or to send him back to poverty and uncertainty. That person was a member of the United States Public Health servi service. Its a testament to all that i love about this country that just 97 years after my grandfather went through his sixth second fi six second physical on ellis island with no discernible prospects, his grandson might be in charge of that very same Public Health service as well as all of the other world renown components of the department of health and Human Services. The mission of hhs is to enhance the protect the health and wellbeing of all americans, through programs that touch every single american in some way every single day. Through its outstanding leaders and career staff, hhs is primed to meet that challenge. The task is humbling, i will say. Marshalling and 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 these skills in the dark days after 9 11 as we face the health and human consequences of those attacks. Through the subsequent anthrax attacks and preparedness for potential further biological, chemical, radiological or nuclear attacks, in the implementation of our completely novel part d Prescription Drug benefit for seniors and by helping to build global, national, state and local pandemic flu preparedness. In our response to threats such as sars and monkeypox and our efforts to continue to reform welfare programs to make them as modern, responsive and empowering as possible for the individuals and families we serve and through innovation in the private sector to bring lifeimproving therapies to our people and the people of the world and finally in harnessing the power and big data of Predictive Analytics to be more capable to serve our fellow americans. With a department with the size and scope of hhs, it can be difficult to prioritize. Nonetheless, should by 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. Through 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 experiences to the table that can help us tackle these issues while still encouraging discovery so americans have access to highquality care. Second, we must make health care more affordable, more available, and more tailored to what individuals want and need in their care. We all share a common concern for our fellow americans who are struggling to achieve access to Quality Health care even if we do not necessarily agree on how best to go about addressing that challenge. Under the status quo, premiums have been skyrocketing year after year and choices have been dwindling. We have to address these challenges for those who have Insurance Coverage as well as for those who have been pushed out or left out of the Insurance Market by the Affordable Care act. Third, we must harness the power of medicare to shift the focus of our Health Care System from paying for procedures in sickness to paying for health and outcomes. We can better channel the power of Health Information technology and leverage whats best in our programs and in the private competitive marketplace to ensure the individual patient is at the center of decisionmaking and his or her needs are being met with Greater Transparency and accountability. Finally, we must heed President Trumps call to action and tackle the scourge of the opioid de epidemic that is destroying so many families, individuals and communities. We need aggressive prevention, education, regulatory and enforcement efforts to stop overprescribing and overuse of these legal and illegal drugs. And we need compassionate treatment for those suffering from dependence and addiction. These are serious challenges that require a seriousminded sense of purpose and if confirmed i will work with the superb team at hhs to deliver serious results. I thank President Trump for this important opportunity to serve the American People and i thank this committee for your consideration of my nomination. Mr. Chairman . Thank you very much. Youre really qualified for this position. One of the most qualified ive seen in my whole term in the United States senate so im pleased youre willing to zacharys the to come here and help turn this mess around and get it working better. Let me ask this question, mr. Azar. As you know, i fought hard to extent to chip program for a full five years to support the nine million families that rely on it. And i think well get this done as soon as possible. And when that happens, hhs will have the five years of runway to work with. What should hhs be doing to bolster c. H. I. P. And ensure its continued success . Well, mr. Chairman, the Childrens Health Insurance Program is such an important part of your legacy and i do look forward to the very swift reauthorization so we can secure that program for this year and for the years to come for our people. It serves as very important bridge and stable force for the children of our country. I would continue to look forward to working with you and other members of the committee on any ideas that you have following reauthorization in terms of implementation, ways that we can make that program more responsive, more effective for any of the beneficiaries in that program, ways that we can make our programs more efficient so we can spread the dollars you give us to reach as many children as humanly possible but very much just openminded approaches from your learnings, your extensive learnings from the Childrens Health Insurance Program. Thank you. Senator cardin, ill turn to you. Thank you, mr. Chairman, first, let me welcome mr. Azar here. I particularly want to welcome your dad, doctor azar, who is with us. Mr. Chairman, mr. Azar grew up in salisbury, maryland, his father is a distinguished physician and was involved in the policy development in our state of maryland on Health Care Policy and i had a chance to work with him when i was in the state legislature so its good to see the family here and we thank mr. Azar for his willingness to serve in this important position so the first question ill ask you will be a parochial one with maryland. If necessary, ill get your father involved here, and this is protecting some of the initiatives that weve had in maryland. We have, as you know, an allpayer rate system for our hospital care that requires the attention of hhs to make sure we can continue to provide this uniformtype service in our state. Many states have come up with innovative ways to help with our Health Care System and we have a chance to talk about it. I urge you to Pay Attention to these types of initiatives and be understanding that we may need special attention to preserve this type of access to care. Senator, thank you and thank you for the wonderful meeting where we had where we got to discuss this particular issue. If confirmed id love to come home to maryland and spend time learning about the maryland approach. Its very innovativinnovative, cutting edge and you have my commitment that if im confirmed as secretary, i want to work with you and be a good partner. I think that all kinds of innovation and different approaches at the state level, as you said, are what we need to be trying. No one entity, no one person has the right answers and i want to be supportive of you in the state of maryland and what theyre trying to do here. Appreciate that. One of the major accomplishments under the Affordable Care act was to elevate the office of Minority Health and Health Disparities as an institute under the National Institutes of health but also to establish Minority Health offices in all the agencies of hhs. Its important that the secretary get directly involved in these issues, the historic discriminations in our country are well understood. Do we have your commitment that you will pay particular attention to this particular priority to make sure that we do right for Minority Health in america . You do. And thank you for your longstanding commitment in that area. If confirmed id also love to get your ideas of ways we can things that we can do to be better in that space. The color of ones skin, ones sex, whatever, should not where one lives, we ought to be doing everything we can at hhs to ensure people have the highest quality access to the highest care in the United States. I want to talk about one area that the Trump Administration has deviated from previous republican administrations in reimposing the socalled gag order which deals with services on contraceptives and other areas, the mexico city policies. I disagree with this policy. I think it compromises Womens Health in america, compromises our ability to work internationally with different organizations to protect health generally but the manner which this was implemented under the Trump Administration is compromising our ability to work with International Health organizations and dealing with issues from aids to malaria to so many other issues in addition to Womens Health issues. Are you willing to take a look at this to see whether we can get a more rational way . I disagree with the policy to start off with but the way its being implemented now is counterproductive to Global Health priorities and does really require some attention of the secretary and input into the way these policies are implemented. I am not deeply familiar with the ways of which any implementation of the mexico city policy changed at the beginning of this administration compared to past one. My sense is there were some differences as you mentioned. I want to learn more about that and would be happy to discuss that with you. I clearly share the overarching view that the United States needs to be deeply engaged in global Public Health, the rest of the Worlds Health impacts us. As deputy secretarys general counsel was engaged with the leadership of secretary thompson and secretary leavitt so happy to hear from you on that. Thank you. Lastly, you mentioned in your Opening Statement about drug prices being too high. We all know that. We pay a lot and globally its very out of step. Tell me how you intend to address this issue of bringing down the cost of prescriptions particularly in light of your previous experience at lilly. Thank you. And i hope from having worked for this last several years in that space it brings a knowledge anyone else coming in as secretary this is such a complex area, the learning curve would be so high to just know how that system works and what the incentives are bring a great advantage to hit the ground running. We need to deal with issues of competition. We have to ensure we have robust generic competition, branded competition, i want to create a very viable and robust Biosimilar Market to compete against Branded Companies in the highcost biologic space. So thats critical. I want to make sure we go after any types of gaming or exploitation of exclusivities or patents. I fought against this when i was general counsel, Led Development of a rule that changed for the first time fever regulations tht saved 34 billion for patients over ten years as a result of our efforts. Theres no silver bullet. Theres not one action that fixes this. I want to hear ideas from others. The most important thing we have to figure out is can we reverse the incentive on list prices . Theres a lot we know we can do on the discounted prices but i want to work with this committee and anyone who is smart and thoughtful about can we create incentives that pull down list prices so when the patient walks in needing to pay out of pocket at the pharmacy that theyre not hit with that kind of cost. That ice one of the harder issues to solve but im deeply committed to working with you on that. Im sure my colleagues will have other questions on this issue. Thank you. Thank you. I have some obligatory questions that i ask all nominees before in committee that i havent asked yet so ill take the time to do that. First, mr. Azar, is there anything youre aware of in your background that might represent a conflict of interest with the duties of office to which you have been been nominated . No, mr. Chairman, although i will follow the advice of the career designated Agency Ethics officials to ensure that i manage any potential conflicts that come about through the ethics approvals as part of the confirmation process. Thank you. Second, do you know of any reason, personal or otherwise, that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you have been nominated. No, mr. Chairman. Third, do you agree without reservation to summons to appear and testify before any duly constituted committee of congress, if confirmed. Yes, mr. Chairman. Do you commit to proper response any questions addressed to you by any senator of this committee. Yes, mr. Chairman. Thank you very much. Well turn to senator grassley now purcha now. As i promised you in my office, youd know about the questions im going ask. I only have two questions. The first one involves physician payment sunshine act that i worked hard to get passed and is part of obamacare. Background to my question, in march of 2017, the university of iowa report add growing crisis of prescription opioid use and overdoses in iowa. While lower than some states, iowa has seen rates of Prescription Drug deaths quadruple since 1999. In addition to concern about issues of these drugs, i also think its important to protect Patient Access to needed medications. One strategy to achieve that balance is to ensure prescribing decisions are made in the best interest of the patient and not as a result of inducement to Health Care Providers by Drug Companies recent reports raised concern about payments from pharmaceutical companies to Health Professions and the effect on opioid prescribing practices. The bipartisan physician payment sunshine act was designed to provide transparency regarding payments to physicians from Drug Companies. This law created the open payment database at cms. In november senator blumenthal and i wrote a letter to your department thanking for the support that cms center for Program Integrity is given. In that letter, we further encourage the prioritization of funding of open payments database. Now, you may wonder why im asking this question. Before i ask it, mr. Chairman, id like to have the blumenthal grassley letter and university of iowa report 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 gut this legislation. We prevented that. So very simple question to you, will you commit to continuing to collect and post all the Data Currently Available on the open payments website . Yes, senator grassley. As you know, im a big supporter of the sunshine act and your work there and supported it at the time you had first proposed it. I think that transparency is extremely helpful. Yeah. My second and last question, since the epipen misclassification fiasco, i focused a lot of my oversight on medicaid drug Rebate Program. In the course of my oversight, i found that during the Obama Administration, cms did not properly oversee the program causing billions in taxpayer dollar losses. For just the epipen, the taxpayers may have lost out on more than a billion dollars. Its kind of this way. One in 7 10 billion lost but doj record 75 billion so 1. 3 billion loss. Why they didnt go after the 1. 3 billion, i never get an answer from doj. December 17th 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 10 drugs from 2012 to 16, medicaid may have lost 1. 3 billion in rebates. Thats just from a sampling. So still lost we dont know how many billions of other dollars may have been lost. So my question to you by the way, id like to also have submitted a letter i have from former cms administrator for the record. Without objection. This question. Theres a lot of taxpayer money at stake here. How will you approach fixing the medicaid drug Rebate Program so that it is properly overseen and taxpayers loss kept to a minimum. Thank you. I was very concerned to see the media report and read this report from the Inspector General on the Rebate Program. I certainly will work with administrator verma as well as with cms to ensure that the program is improved to get at that. One of the key issues is to ensure are the regulations and guidance clear so those companies knew what their obligation is. And if necessary moving to enforcement to ensure they understand these are obligations that need to be held up. Thank you. Because doing that, you can save a lot of taxpayers money. Mr. Chairman and mr. Speaker azar, im going to ask some questions about the charts. If you have any questions about the charts we welcome your response. During the five years you were president you had direct responsibility of pricing strategies of the biomedicines unit, including osteoporosis drug. You chaired the u. S. Pricing committee. Im going to quote from how you described your role. You said to the committee as chairman of the pricing reimbursement and Steering Committee for lilly ufa and relevant loss and profit leader for biomedicines unit in the United States, i approve pricing recommendations for this medicine. That is your quote. During your time in these positions, based on the committees investigative team, the companys annual Financial Reports showed that forteos revenue increased 58 reaching 770 million in 2016. Each year the company told shareholders that revenue increased caused forteos price went up. You have told the finance committee that you are responsible for approving the price of forteo, so lets look at the prices. This chart that were holding up shows the wholesale package price of forteo. And your watch is the red line where the price is just going up and up and up. The blue line, as i indicated, was the price before you became president. The red line is the price while you were president. The price more than doubled on your watch to a little more than 1,000 to a little more than 2700. Thats a 164 increase in five years. The wall street journal recently showed how these price effects affected consumers when the paper did a profile of one older person who was on medicare who paid 5600 of her own money to buy forteo after she broke her back. Mr. Azar, this certainly indicates the wholesale price of forteo in the United States, in fact more than doubled on your watch. Yes or no . I believe that data is directionally correct. I dont have the actual pricing information but i believe thats correct. Okay. Let me take a look now at trettera, another drug under your purview used tore attention deficit disorder. This chart shows how it changed over the years. Again, the price before you became president is blue. The price while you were president is red. This is another jump in pricing that began shortly, based on our investigations, after you became president. If these were isolated incidents, it could be written off in my view as an anomaly. Seems like people got hurt, anomaly. During your time lillys u. S. Pricing committee when you ran that higher prices drove u. S. Revenue for drug after drug after drug, even when demand for the products fell. So one more question in this line of questioning. As chairman of the u. S. Pricing committee for this company, did you ever lower the price ever of a lilly drug sold in the United States . Drug prices are too high, senator wyden. I said that when i was at lily. Thats not the question. Did you lower the price. I dont know if theres ever a drug of a branded product that has ever gone down in the United States because every incentive in the system is towards higher prices. That is where we can do things together working as the government to get at this. No one company is going to fix that system. Thats why i want to be here working with you. Let the record show that when that specific question of mr. Azar was asked when the bipartisan finance committee was present, did he ever lower a price of a lilly drug sold in the United States, mr. Azar said no. Let the record show that is what we were told and now were going to have to make some judgments about how youre going to approach the issues of helping to shrink pharmacy receipts. You and i talked about legislation i introduced that would ensure that the consumer got the price reduction at the window. I introduced that legislation, so were probably going to ask whether youre going to urge the president to support it. Thank you, mr. Chairman. More questions on the second round. Senator enzi. Thank you, mr. Chairman, and Ranking Member wyden for your quick work holding this hearing so we can move the nomination of mr. Azar for full consideration. Secretary of health and Human Services is a role that should not sit vacant. Too many vital priorities in health care that need immediate attention and i appreciate you moving forward. I also appreciate mr. Azars willingness to serve. Mr. Azar, in my meeting with you after your nomination, i was pleased to get your Top Priorities for your time as secretary confirmed. Appropriately, he will be focusing on the affordability of Prescription Drugs. This is something that everyone around this dais knows about. The problem is complex and doesnt have a simple solution but im very encouraged to hearing his commitment to taking this on and knowing he has real expertise and understanding of the manufacturer side of the equation. I think thats something we really need. This is something i believe can and should have bipartisan approach, and i hope to hear that kind of commitment from my colleagues here as well. Mr. Azar, you have listed and now restated your priorities of drug prices, Insurance Market affordability and choice, working toward a valuebased system in health care and the Opioid Crisis. I completely agree. These are where the secretarys focus must be, and i look forward to working with you to get that job done. Mr. Azar has been before 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. Now, to get to a question, wyoming department of health has had a medicaid 1115 waiver application sitting at the centers for medicare and Medicaid Services for over two years. Its a tribal uncompensated care waiver. 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 long awaited application. This is something that weve discussed before in which i know that you not currently being in the position are not able to comment upon. However, i would appreciate your commitment to examining this application as quickly as possible. Senator, thank you for raising that. Thank you for taking the time to meet with me. I obviously dont know the parameters on the wyoming waiver, but i will tell you im very concerned about the amount of time that youve mentioned there thats been pending. I do want to ensure if im confirmed as secretary that cms works with the states on any demonstration products or waivers as a very good partner and is responsive and timely. So i will, if confirmed, get on that right away, looking at that for you with wyoming. Thank you very much. Now, youve also talked about your priorities on drug pricing, and that seems to be the topic here. I appreciate your willingness to take on that very serious and complicated issue. I appreciate the background that you bring to that issue. Im sure your familiar with the announcement by novartis discussions with cms to think differently how they price the leukemia drug. I know thats not a finalized agreement and not longterm data showing how this works. Seems like a longterm approach and one to explore further. Whats your view of outcomes based contracting in the private sector and possible applicability to public payers like medicare. I think valuebased or outcomebased contracting generally within the Health Care System, especially with medicines, can be important. I also think some regulations in medicare actually get in the way of that. I know when i was doing this in the private sector, i wanted to be able to put our money where our mouth is, to say, if it works, pay us. If it doesnt work take a greater discount. Some rules around government price reporting and other rules can be a barrier to that. I think theres fairly broad bipartisan support to address that so we can get real valuebased paying for value and paying for outcomes on these medicines. Im quite excited and think that can be important part of how we think about drug prices and value for customers. Thank you. Appreciate the expertise you bring but also the record that you have of working in the government in the past. So thank you for being willing to serve and yield the balance of my time. Thank you senator. Senator establistabenow. I want to thank you for your commitment for the Childrens Health program. I have a sense of urgency about this as well as you do and i want to thank you for your commitment over the years. Thank you. Youve indicated welcome. Welcome to your family. Youve indicated you will hit the ground running my question is what direction will you be running. I share the concerns of senator wyden as far as what concerned when you were at eli lilly. I want to talk about another drug, the particular product so critical for people with diabetes from 1996 to 2017, went up 700 . During the time you were at eli l lilly, it doubled, double in pri price. So im wondering when you say drug prices are too high, do you agree 255 for humalog for one vial and multiple are needed, do you believe 255 for one vial is too high. Across the board products are too high. Insulin is too high, all drug prices too high in this country. The increases, this is what is so bizarre about the way the system is organized, that those price increases happen. My former employer said this publicly. During that same period net realized price for the company stayed flat. Yet the patient who is walking into the pharmacy, just to cover for increased rebates, the patient walks into the pharmacy whose insurance may not be paying for that is absorbing that cost. Thats what i want to work with you to try to solve. Mr. Azar, first of all, insulin was first approved 100 years ago so any cost to the company to recoup r d, in addition to what taxpayers pay for would already have been done. I appreciate that you say its too high. Yet in that position, with this system, you doubled the price. So you were taking advantage certainly of that system. That was a choice that you had as president , which is of concern to me, because im assuming the price of manufacturing the insulin didnt double. Is that correct . I dont have the data. I didnt run the diabetes Business Unit at lilly, so i didnt ham the price of manufacturing. The system, it works for those players in the system, but it doesnt work for for the patient walking to the pharmacy. 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 he supports negotiating Prescription Drug prices. Do you believe the government should negotiate Prescription Drug prices . I think where the government doesnt have negotiation its worth looking at. One of the things i talked about is in part d. We do significant negotiation through pharmacy benefit managers that get the best rates of any commercial payers. We dont do that in part b, which is where we have physician administer drugs. We basically pay sales price plus 6 or some other number. Just in the interest of time, im really i dont mean to be rude but in the interest of time youre saying yes to negotiation of Prescription Drugs. Where we can do so preserves innovation, access for patients, i want to look at anything thats going to help us with drug pricing. In part b i think we should be looking at those approaches. National academies of science, 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 purchase the drug at whatever the price. They recommend, they say the effect of not allowing hhs to negotiate prices is to tilt the Bargaining Power further in favor of drug manufacturers. Now, part d, as it was originally in the past, basically prohibited. It was on the side of the drug company saying you cant negotiate. So do you support changing the law so that under Medicare Part d you can negotiate on behalf of seniors and the American People to bring prices down . Right now negotiation is happening in part d. The best rates there are out there. The national academy, they are just wrong on that. These are incredibly powerful negotiators who get the best rates available. When they say its in favor of the Drug Companies they are incorrect. Disagree with that. For the government to negotiate there, we would have to have a Single National form lat i dont think we want to go there. The drug addiction and Opioid Crisis also recommended using Emergency Powers for a drug related to the opioid addiction probl problem. They just recommended that drug for drug addiction. Would you support that . I want to look more about that situation. If the government is the purchaser, buying that as part of the program, supplying that to first spoernsd, theres absolutely nothing wrong with negotiating that. I did that with another drug during the anthrax attacks. Nothing wrong with the government negotiating if were the buyer. I need to learn more about that issue from within the government. Thank you, mr. Chairman. Thank you, mr. Chairman. Thank you, mr. Azar for being here today. Thanks for willing to serve and your family for putting up with the demands involved in public life. I think we autumn share your priorities of lowering the cost of health care and Prescription Drugs. I hope that based upon your past experience its an industry you understand and can help us with suggestion about how to get those drug prices down. That is an incredibly important part of health care today, incredibly costly part. I look forward to working with you on these issues. We discussed this previously but we have providers in south dakota working to innovate and ensure access to care for folks in rural areas and in indian country, yet we have a lot of challenges that exist. For years being in Health Facilities in south dakota have been found to have serious deficiencies and poor quality of care. For instance, pine ridge recently lost its ability to bill medicare and medicaid for failing to meet cms standards. This has to change. Ive been working with senators brasso and another on restoring hhs authority to get back on track. Specifically the bill would give hhs the authority to terminate poorly performing employees, streamline the hiring process and create incentives for quality providers to remain on the job. Is this something that you agree you could work with congress to achieve . Absolutely, senator. I look forward if we could get those additional authorities and also look forward to any ideas you have. Its unacceptable for us to not be providing High Quality Service there. I appreciate that. Look forward to working with you and your team. As you know, ive been supportive. I share this, i think, as well with you on finding solutions to address the application of medicare Competitive Bidding rates in noncompetitively bid areas, an issue that south dakota medical equipment providers report has caused supplier closures and gaps in Medicare Beneficiary access. Hhs was supposed to have issued a report to congress. This came per the 21st century cures act on beneficiary access by january 12th of 2017. I am not aware the report has been completed, so id request that once confirmed you would work to have that report completed quickly. Additionally, if confirmed, i would ask that you commit will you commit to working with the office of management and budget to quickly approve the interim final rule to provide relief for rural providers that have been has been pending since october of 2017 . Yes, senator, id be happy to work on those issues. Thank you. Thank you. In the face of provider shortages, south dakotas Health Systems increased access to care in rural areas through telehealth. You may be aware several senators working on the connect for health act which would further expand use of telehealth in remote patient monitoring in 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 Congress Enacting that provision to provide you the discretion to expand access to Telehealth Services . Senators, as we had the opportunity to discuss together in our meeting, i am a big supporter of telehealth, an alternative means of providing care especially in rural communities. We can sometimes be penny wise and pound foolish. Thank you. I look forward to working with you and your team on that as well. It is something that has tremendous potential to deliver benefits to areas of the country for which in many cases its difficult to get delivery of Health Care Services in a timely and Cost Effective way. So thank you for your answers to those questions. Well hold you to them and follow through with you and look forward to working with you once youre officially installed there. Its a big job, as you know, with lots of moving parts, lots of challenge, but also lots of opportunity to really make a difference in the lives of people who in this country need action to more affordable Health Care Services. Mr. Chairman, with that i yield the balance of my time. Senator casey. Mr. Chairman, thank you very much. I want to reiterate what senator stabenow said earlier about your service. We commender work that youve done in the Childrens Health Insurance Program. I hope we can get that done in the next couple of days by the 19th. Were grateful for that. Mr. Azar, thank you for putting your self forward for service with the federal government. Its good to see your family. You and i have common state roots, scranton and johnstown. But despite those commonalities, we have a lot of disagreements on Health Care Policy. I wanted to explore that first and foremost, appreciate the time you spent in our office going back a couple weeks ago when you were coming before the Health Education labor pensions committee, a committee of which im a member. At that time we talked a good bit about Health Care Policy, in particular medicaid, which is a program that i think Many Americans appreciated over many years but probably never more so or with greater urgency than this year, when there are proposals which in my judgment, i think in the judgment of a lot of folks who followed Health Care Policy for their whole lives, a lot of concern that medicaid would have been decimated by some of the proposals this year that were put forth. I tend to focus on it not only in a programmatic sense but people sense when we get letters from families concerned about medicaid. I got a letter last year from pam simpson. Shes from southeastern pennsylvania. She was talking about her son rowen. This is the letter she sent me back and front. A picture you cant see from where you are. She concluded the letter by making a plea to me to continue medicaid. Her son rowan, she described what life was like without medicaid. All of the treatment and therapies and benefits that rowan received. She ended the letter talking about or as i said pleading with me to make sure we take steps to protect it, saying that we should think of her and her husband and their inability to make ends meet without medicaid, obviously to focus on rowans life wit. Also she said think of my daughter luna, a little girl actually younger than rowan. He was only at the time about 5 years old. Saying she will have to care for him when were gone because of his circumstances. But here is the last line of the letter. Were desperately in need of rowans medical assistance and would be devastated if we lost these benefits. Thats what one mom said about her family and her own circumstances. I ask you a broad question. If the proposals put forth in all the Republican Health care bills this year were enacted into law or i should say and or if the Administration Proposals on medicaid and proposals i think you support would become law, would Rowan Simpson lose his medical assistance . First, as you mentioned, were from the same state. I think we actually share a lot of the same goals for people for access to care, folk access to insurance, access to quality. Sometimes we may differ about role of government, size of programs, techniques, whatever, but we share that equipment. I share the equipment to the medicaid program. Its a vital Safety Net Program for our folks. I dont know that individuals particular circumstances and how they qualify for medicaid. But obviously for so many families medicaid is a vital link or bridge to independence eventually or longterm need for them. If confirmed, my job is efficient, effective and responsible to everybody as possible. As you know, under current law, theres a guarantee. As long as youre eligible, or i should say some are eligible, some have a guarantee by way of their disability. But even significant means, jobs and Health Care Coverage can avail themselves of medicaid because of a disability. My question is will that guarantee remain in place not only for children with disabilities but for adults as well. I think whatever we do in medicaid, weve got to make sure its doing its job. For an individual like that with disabilities that needs to be categorically in, we have to make sure its funded and supported to do its job for them. Id also ask just in the context of adults, and i know were running low on time, if you have an individual that relies upon a Disability Service provider, someone who needs a wheelchair, durable medical equipment, will those individuals continue to get those services . Again, any type of reform thats the situation we have to look at to make sure were still able to deliver for those individuals. Mr. Chairman, i know were running low 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 azar in his previous roles in government. In fact, when he worked in the Bush Administration at hhs, i got to see him in action. I can tell you from personal experience, he knows his way around the department. Hes got a lot of integrity, a lot of friends and allies here on the hill from those days on the jobs. You wouldnt know it from some of the comments it made here today but hes actually been confirmed twice as general counsel and secretary. Both times, it was by unanimous consent. So not a Single Member objected. Thats because hes got the experience, hes got the background, and im glad someone with his experience is willing to step forward. Frankly weve got a lot of challenges. Its a big, complicated department. In our conversations we spoke a lot about the opioid commitment, what can be done. Hhs plays a central role. Right now helping us implement comprehensive recovery act through samhsa, cdc, medicaid, medicare in particular. This is all going to be part of your bailiwick should you be confirmed. There is an issue that has a very specific hhs that i want to get your views on today. Im not sure we talk about this specifically in our meeting, thats improving access to care. This has been something many of us worked on over the years. Senator durbin and i have a bill called the medicaid care act, which would lift this medicaid institutions for mental disease exclusion, otherwise known as imd cap. This 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 that i visited. They literally turn people away because they dont have the ability based on their taking medicaid and being involved in the program to be able to have access. It makes no sense. I understand why it was put in place in the first place, why on the Mental Health side, fight back against institutionalization, so my question would be knowing cms trying to be supportive, 1115 waivers supported in some cases but still a lot of restrictions. Would you support legislation, ours raises from 16 to 45 beds, some pay fors were working on. Would you be successful in those efforts . Obviously as a nominee i cant commit the administration. I dont understand restrictions in the face of opioid and pressing demand and need for treatment of those individuals. Id love to work with you on that if im confirmed as secretary. I dont get it and id love to work with you on it and fix it. I appreciate the answer. Not something you expected me to raise. Im not sure we talked about it in our meeting as much as other issues that had to do with the prevention and treatment side. Thank you for that comment. Thats another reason i think youd be good in that job. We need to get that cap raised. Again, we have to pay for it. We understand that. We have some thoughts on how to do that i think its absolutely crucial in my state and so many other states getting hit so hard by this Opioid Epidemic. Another you talked about was wellness and prevention. You touched on it in your comments to think how we approach health care in the country, paying good health, includes in my view providing incentives for Wellness Programs. Senator wyden has been in on this, introduced a better rewards bill. It basically says for medicare beneficiaries, they would be given an Incentive Program to be able to help them with whether its smoking cessation, diabetes, things over time will save the government money but most important to me, make their lives more healthy so they can live longer, healthier lives. Its worked in the private sector. No question about it. Cleveland clinic in ohio the best place for that, they put this in place for their employees, have seen enormous improvements in their health. By the way, its a modest incentive. I know it works, works in private sector. Among seniors it will work better. My question for you, senator wyden and i are looking at maybe trying to make some changes for the legislation because frankly Budget Office doesnt give us the score they should in my view. What is your view of this kind of legislation . Would you support it . I dont think it should be limited to medicare, i think medicaid also has an application for this kind of Prevention Wellness program. So senator, i have long been supportive of these types of Wellness Programs even when i was deputy counsel at hhs, we looked at regulations around hipaa to enable these types of programs in the first instance and happy to work with you on. I do think it comes up so often that where medicare and medicaid were designed in the 60s, silos, pay for this, wont pay for that. Now 40 or 50 years later penny wise and pound foolish saying what we will or wont cover because it doesnt fit in a category even if its going to be Better Health for our people and save us money. Very happy to work with you on that. I appreciate that attitude. My time expired. I look forward tower confirmation. Thank you, mr. Chairman. Thank you. Senator nelson. Thank you, mr. Chairman. Its either congratulations to you but also thank you for four decades of extraordinary service. And thank you also for your personal friendship. Mr. Azar, theres a lot of chatter up here about now weve got a trillion and a half dollar ho whole additional budget deficit over the next ten years thats added to the national debt. Theres a lot of chatter among our republican colleagues that we need to make up for that. So they are specifically looking at Social Security, medicaid or medicare under the guise of socalled, quote, welfare reform, end of quote. Tell me, do you think in welfare reform that it ought to be medicaid, medicare and Social Security that would be cut . Senator, im not involved in discussions. Im a private citizens, not involved in discussions about whats being contemplated. Im not aware of cuts im asking you for your opinion. You dont have to comment on what all the republican senators are saying. Your opinion. Would you consider an order to make up this huge budget deficit hole cutting medicare, medicaid and Social Security. The president has stated his opposition to cuts to medicare, medicaid or Social Security. He said that in the campaign. I believe he maintained steadfast in his views on that. As secretary i would enforce that. Would you advise him to keep his word . Hes kept his word. I would stick with him keeping his word on that. I dont have the broader context of any discussions going on. Im here on the sidelines. Hes made that commitment. I will live up with that if im confirmed to keep his commitments. 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 . Ive 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 effectively more to driving value and outcomes. I think you can stretch that program and make it more sustainable over time just by how we operate it. We can as a result of that lead to transformation and broad er Health Care System. Thats where my energies are. Let the record reflect that the witness did not reject increasing the medicare eligibility age. I might say if you get out with the people, you might run into people who are in their 50s and 60s and just holding on for dear life because they dont have any Health Insurance until they get 65 dawes they know they get med kamplt medicare. They dont want it expended. Are you aware of a Voucher Program . Im not aware of turning it into a Voucher Program. What i want to do again is make sure our Medicare Advantage program which twothirds of new enrollees are signing up for Medicare Advantage and i played a role in helping to launch i think is a great option for seniors as they come into the program. They are liking high levels of satisfaction. I want to make sure were going everything for a strong alternative. Again, thats where my energies are, my thoughts there. Do you support closing the doughnut hole in the medicare law . Closing the doughnut hole . The Affordable Care act did have funding that helped Senior Citizens when they arrived at the pharmacy. I think it gives up to 75 coverage in the doughnut hole, which im very supportive of. You are . Yes. Keeping all of that. Yes. Tell me about medicaid. I want to make sure we run the programs in ways that meet the needs of the citizens. As i said earlier, i want to make sure working with the states, who have the on the ground responsibility that were being responsible and responsive partner of theirs looking at flexibility, trying new things. Excellent. Excellent. How about puerto rico . Puerto rico. Medicaid for puerto rico. Its a block grant. It cuts off. We all need to work on that puerto rico cliff issue. I agree with you we need to work to find solution theres. Senator scott. Thank you, mr. Chairman. Mr. Azar, good morning. Thank you for being here. I know that drug pricing is very important. I think also beyond drug pricing, so is the issue of Health Insurance cost. Very important. South carolina four years, 120 increase, last year 31 increase on the exchange. Theres no doubt that we have to find a way to rein in the prices our consumers are being impacted by in the Health Insurance arena. One of the way we do that section 1332 waivers giving states more flexibility, at the same time looking at aca for foundation because we have to. Catastrophic plans are limited to 30 years old and below. I have legislation cosponsored by senator carper, warner and cassidy that would allow for cat disro catastrophic plans for those who want and need coverage. One of the things in the aca, design plans are not suited for individuals who want to buy the plans. So as our next secretary, what would you do to expand Consumer Choice and encourage americans to make healthy, proactive decisions . So i think in terms of the Affordable Care act, im glad you raised the issue of increasing premiums and lack of choice that youre experiencing in South Carolina. I believe if im confirmed as secretary, i have a very important obligation to make whatever program that i am entrusted with to work as well as possible. What we have is not working for people. Not working for the 10 million in the individual market fully. For many of those people it can be false insurance card, insurance but very high deductible or not having access to providers. Its unaffordable use of care. I want to solve the program for them. I want to solve the program as you just mentioned for the 28 Million People who sit outside of that market still, who dont have access in that individual market. By not being in that market are actually causing the premiums to go up for the 10 million in it. So can we make those offerings . Can we create more choice and make those offerings more attractive to create a better risk pool to help the taxpayer and people in that market . I fully share that commitment. I want to work with states on these 1332 waivers and work with our authorities to try to make that Health Insurance more affordable, make it real insurance and make it for what they feel they need. Next question for you is on the Opioid Crisis were having throughout this country. In 2016 there were 61,000 deaths related to opioids. Thats a crisis. In South Carolina 616 folks lost their lives, 9 increase. I would love to hear your commitment, not only to address the issue from washington, but my ask of you, lets get outside of washington. Lets go to the rust belt. Lets go to the places where people are suffering today because of opioids. Lets create remedies that actually work, that are not top down simply but truly bottom up. Evidence suggests the best remedies so far have been created through collaborative effort starting local level and moving its way up. I would love to hearing you commit to not only running hhs but going to places in West Virginia where they have the highest per capita, 41 out of 100,000 deaths associated with opioids, places like myrtle beach where we have the highest level in South Carolina. But if were going to understand and appreciate this issue in a very favorable way, were going to have to do so by putting a face on the issue, not in washington but somewhere around the country. Are you committed to actually going to those places with us . Absolutely. Senators, you know im a hoosier, so im right in the epicenter of the crisis also in indiana. I do believe that there is not necessarily spectacular whulg you had ko to trultd praltz in order a wo also so we can replicate and make those available elsewhere at these ep centers whats driving thats in addition to we can do things at the center with regulatory authority, with education programs, et cetera, that have to drive solutions on this crisis. I only have about 30 seconds left so i wont ask a question but make a statement that encompasses my last two points. Number one, your expertise in the valuebased arrangements will be helpful, i think, when you look at the opportunities of the future from bci to crispr, a lot of opportunities that will enhance life in ways we couldnt imagine five or ten years ago. Id love to find ways to make access to life changing opportunities affordable. Second, as we think through drug pricing, i also think that we have to understand and appreciate the necessity of nonaddictive alternatives. And the pipeline to get there. So i hope there is a plan in place youre thinking through for an expeditious approach to nonaddictive remedies as well as things that eliminate abuse deterrent or provide abuse deterrent. The last is core nih focus and partnership to try to drive nonaddictive pain treatment therapies to replace addictive opioids getting us in this mess. Thank you. Thank you, mr. Chairman. Let me join all my colleagues as well in acknowledging and recognizing your Great Service to this committee and to the people of utah and the senate. Thank you. Were going to miss you. I very much appreciate our opportunity to Work Together and the fact that when you had a chance to drop me off this committee, you kept me on this committee. Im grateful for that. Mr. Azar, great to see you again. I know some of my colleagues have been asking about drug pricing. One of the areas i felt for some time while there are specific policies that we can implement, ive been concerned that in many ways americans pay for the r d for drug pricing for the whole world. Part of the ways we can make programmatic changes here but some of this has to be dealt with in our trade policies amongst all the oecd nations we pay the highest percentage on drug prices. Recognizing you bring more than a little experience in this matter in your role at lilly was involved in will whole pricing issu issues, what do you think about how we bring down americans cost of drugs visavis all the industrial nations in the world. Senator, thank you for meeting with me and raising that important question. Ive talked about this as a critical issue for i think over 15 years when i was in government before, the fact europeans, japan are not paying their fair share. They started investing more through the program at European Union and nih like basic primary research and funding. They are able to have single payer socialist systems with singer formularies, take it or leave it pricing. I do think we have to address that through trade agreements and trade negotiations with trading partners the fact they are not paying. That, of course, doesnt solve the pricing here. That helps with relieving some of the burden of r d abroad. We have to address that here with some of the measures i talked about, other measures you or others have. Were going to solve this issue at the list price level and net price systemic savings level. How much more transparency should we have after Companies Raise prices in terms of ration al, seems like a mismatch. Im in favor of more transparency in the system. I think its helpful. We have to be careful around pricing to make sure were not doing something anticompetitive or counterproductive in what were trying to do. If youve got ideas there, i do think transparency can be part of the solution as we bring understanding writes the money flowing in the system, who is getting the benefit from it and whats the consumer whats the benefit or harm to the consumer . I have to tell you as someone who for a long time did accept the premise we need to do r d here, that argument has run thin with me as weve seen americans disproportionately bear this burden. Were going to need more radical system than we have in the past. Im going to touch on two other items. I know in your statement you said harness the power of medicare to shift the focus in our hel Health Care System from paying to sickness and paying for outcomes. Obviously everyone makes those comments. One of the things that came out of the Affordable Care act was cmi. And you know i hope while its not been as productive as id like to see it, it is still a tool that is useful and would like your comments on what would you see as the role going forward. Cmi is an important leg to drive this transformation, Health Care System through medicare. We need to idiate, pilot and generalize. I would hope we realize some of those pilots may, we may have a disagreements on this one, may include mandatory pilots because too often those on the voluntary system are the ones able to bring about efficiency. We need to force more into the syst system. Senator we couldnt disagree there. We have to test hypothesis. If we have to test hypothesis i want to be a reliable partner, transparent in doing this, follow appropriate procedures. To test a hypothesis on changing Health Care System it needs to be mandatory as opposed to voluntary to get appropriate data so be it. Let me get my last bit in 15 seconds. An issue senator isaacson and i have been working on for a long time advanced Care Planning, cmi made a major step forward a few years back where they went ahead and put a coding in for that consult. I would like to get you on the record in terms of recognizing we dont want to limit anyones choices but we also want to honor and respect peoples choice about Care Planning and end of life issues. I think its a very important part of all of our personal Care Management and life as we think about our life and health care and family members that we engage in that kind of thoughtful, directive planning what do we desire. As you said, none of us, not about imposing anyones views, actually about ensuring to respect that individuals choice. Enabling that is very important for us. Thank you. Thank you, sir. Senator heller. Mr. Azar, welcome and congratulations. Thrilled to have you in front of our committee. I welcome your family also that are being very patient through this hearing. I may ask you questions that have already been asked because ive been down at the Banking Committee and going back and forth here. I apologize if anything i do or say is duplicative. I was produced last year to work with some of my colleagues on this committee as we worked through historic tax reform bill. As youre aware of, portions of that eliminated the individual mandate tax penalty. Obamacare mandate was probably the most unpopular element of that law and its penalty. Disproportionately affected hardworking across the company struggling to get by. Repealing that mandate restores individuals ability toss make their own choices about Health Insurance and prevents federal government from penalizing these individuals who cannot aforth this insurance. I guess my main question to you as weve discussed both in my office and will discuss here is where will under your leadership will hhs what will improve, what are you looking for in quality of access, Affordable Care, some of these issues as were trying to move forward . Clearly with you in this position, im pleased to see it here and taking time to answer these questions but we really need to look at affordability and access, affordability for all americans. The way were doing it now is not working for everybody. Thats going to be, if im confirmed, my job to take whatever ive got. The Affordable Care act is there, make whatever is there work as best as it possibly can. Part of that is driving a system that is more affordable. More affordable insurance, more choice of insurance, insurance that actually gets them access to providers, not a meaningless card for them but real access. Finally, insurance that fits their needs as opposed to what i happen to say they should have. And i want to work with states like nevada and others to come up with different approaches. Theres no one size fits all. Also theres not necessarily one right answer here. This is very complex. I agree. We all, on both sides, we all share the goal. We want people to have access to affordable insurance. How do you feel about the office of graham cass idaho, Heller Johnson bill have you formed an opinion or direction on that, portions you do like or perhaps dislike on that proposal . With the Graham Cassidy heller legislation, the elements that are very positive are empowering states to run their budgets. Right now the way we run our medicaid system, for instance, as you know is the matching system. If the state comes up with more money, things just increase from the federal government. It also means running that program, its not all their money. They dont always exercise the createativity or fiscal fraud waste and stewardship as if they own 100 of the money so i think the incentives can be reoriented in a very positive way be more state empowerment. In your Opening Statement, you talked more about access and competition. And one of the proposals i have here in congress is competition and that is access across state lines. You know, you can get your Car Insurance, your house insurance, you can insure anything across state lines except your health care. You can even get, i guess, your Car Insurance from some lizard in connecticut, the way it works now. Have you advocated for this . How do you feel about access across state lines . I know the president has pushed hard to allow this kind of competition, this kind of access. And i think this is the next step. I think the administration agrees with that. Just wondering what your opinion was. Im supportive of those efforts. Frankly, anything that can help increase choice, as you said, access and choice, more options available to patients and consumers of what they can buy. The more likely theyre going to find something thats affordable for them and that works for them. And i only have a short time left, with the chairman, but what were looking at is shortage. According to the American Medical Association of medical colleges, 150,000 physicians by 2020, what effort do you anticipate that will be needed to cover those shortages . Thats a vexing problem. We have programs, of course, at hhs that help with physician shortages and support training, whether its graduate medical education or the Health Professions programs. The tuition subsidies and reimbursement program, some are directed toward underserved, the most rural and remote areas. I think its going to be an enduring challenge for us. I would love your ideas if youve got any on how to address that shortage. And ill end with this, mr. Chairman, but i did introduce legislation last year with senator nelson, called the residential physicians shortage reduction act. And i hope we have a chance and opportunity to take a look at this legislation which would allow medicaresupported residency of over 15,000 in the next five years. I appreciate your help and support and your chairmanship on this committee. Youll be missed. Thank you, senator. Senator brown. Thank you for your earlier comments in support of c. H. I. P. I appreciate that. I know you were there at the creation. I hope you can convince leader mcconnell, who frankly has resisted moving on c. H. I. P. September, october, november, december, and now its january. I hope you can use your gravitas and hard work to do the right thing. Well get it done. Thank you. 2016, 4,000 ohians, one of your home states, died from opioid over dose, more than any other state in the country. 11 people in my state a day. You say if confirmed, one of your Top Priorities will be addressing our nations Opioid Epidemic. You said were in a tastate of war. Yes or no, will you commit to prioritizing this issue . Absolutely. Thank you. We obviously need Stronger Leadership than we have seen. We need the president more engaged. We need the secretary of hhs more engaged as part of the c p comprehensive approach, will you commit to holding the integrity of medicaid. If we look at changes to medicaid, the issues of how we address people who are suffering from Substance Abuse that are currently Getting Service under medicaid is obviously something we would have to look at and meet that need if theres any different structure. Let me stop you there. I have heard both you use the term ablebodied adults a lot when speaking about medicaid. Its clear you both have given medicaid reform the idea of work requirements and medicaid a great deal of thought. Let me ask you this. Does an individual who has been diagnosed with severe Mental Illness or a Substance Use disorder, is that person ablebodied . I dont have a definition in hand. It would be something we would work on with congress. I would share your concern. That would seem a pretty obvious you have no definition of ablebodied adult that would be appropriate for differentiating among, between and among medicaid recipients you can share with us . I just have philosophically, i would like us to work in our programs to help avoid any type of cliffs that we have in benefits to try to smooth out the approach so that the individuals have an ability you can understand im sorry to cut you off. You can understand our skepticism and concern that we hear top elected officials and appointed officials in this country talk about ablebodied adults and disqualifying them from medicaid, and then we realize that my state, 200,000 right now, 200,000 ohians are getting medicaid, are getting opioid treatment who are getting it because of the Affordable Care act, mostly through medicaid. I was with a gentleman in cincinnati at the talbott house, sitting next to him and his 30yearold daughter. He turned to me and said she wouldnt be alive if it werent for medicaid. You spent six years at hhs. You looked at definitions of medicaid and much else. If confirmed, youll be in charge of regulation. Thats why all of us want to know exactly how you could rationalize requiring individuals struggling with an illness, whether its cancer, whether its opioid addiction, whether its some kind of severe Mental Illness, how you will rationalize requiring individuals struggling with those illnesses to work in order to remain eligible, especially when such a requirement is in direct, in direct contradiction to the objectives of medicaid program. I mean, if you consider someone with cancer to be ablebodied, what about an individual diagnosed with depression . I would like you to do this. Please submit your proposed definition of ablebodied adult to this committee, included in today, in the record included in todays hearings before this Committee Votes on your confirmation. Senator, i dont have a proposed definition of ablebodied. Youre impugning to me a desire i have not stated. I want to work on are there ways we can make the program be customized to the different types of beneficiaries. Again, i apologize i have never singled out i understand, i dont question your motives. I understand that, but i have sat here and seen members of this committee, all of whom have insurance provided by taxpayers, trying to strip medicaid away from, as my governor, a republican and i, a democrat, have fought to keep medicaid in place, to keep the expansion in place. Virtually everybody on the other side of the room here has voted to cut Medicaid Eligibility, to throw many of those 200,000, 200,000 ohioans right now getting opioid treatment who get it because the Affordable Care act, and they, getting Government Insurance themselves, are willing to take it away. I apologize, perhaps, but excuse my skepticism that nobody in your department, ms. Verna, you, youre not there yet, i understand, have thought about what the definition of ablebodied is . Then you come in here, senator nelsons comments about you have blown a hole in the deficit, and we have to close that huge hole. You go after things that generally conservatives dont like, medicare, Social Security, medicaid, unemployment insurance, to cover this hole. What happens to these people . I hope, and my time has run out, but i hope you will think about those 200,000 people in the state you lived in for part of your childhood, how they will lose they will lose their opioid Addiction Treatment coverage if this administration does what it tried to do earlier. I know you said President Trump is living up to his promise not to touch medicaid or medicaid and Social Security, but the fact is he isnt because he wanted to sign a bill that would strip medicaid from those 200,000 ohioans. I just need answers for that. Senator mccaskill. Thank you, mr. Chairman. At the company you worked at, mr. Azar, welcome, by the way, thank you for your willingness to serve the public. Which was larger in the last year you were in charge, the budget for research and development or the budget for advertising . The budget for research and development should have been. I think the budget at lilly for r d was 5 billion out of 20 billion. How much for advertising . I dont know the number. It would have been vastly smaller. Would you mind getting me the figure . I wouldnt be able to get the figure. I have been gone from lilly for a year. Overall, the cost of advertising has dramatically gone up for pharmaceutical companies in this country. Americans know it because you cant watch an hour of tv without being told to what you should ask your doctor to prescribe for you. Do you believe the american taxpayer should be subsidizing consumer advertisinadvertising. A call to action taaddress thats not my question. I share your concern. Theres a lot of drug advertising on television. I share that view. I want to work i can be thin, i can be happy. I can even i mean, the one that kills me is the one for erectile dysfunction where they have them in two bathtubs. How crazy is that . That isnt happening. Its nuts. I just do not understand why the american taxpayer is subsidizing this gross overuse of television advertising, not for, you know, pepto bismal, not for over the counter, where you need information, but rather tell your doctor you want it. Of course, we have taxes for business expenses across the board on so many practices in everything that we do in business. I do agree with you, though, that there are a lot of television and other Consumer Advertising that does seem there is so much of it out there, and i would love to work with dr. Gottlieb to think at fda, is our approach and balance to how we authorize and approve direct to consumer advertisinadvertisi correct, and do we have data . Is it working and are patients taking the right messages. Its working. People, the most heavily advertised are the most heavily prescribed. My question, should taxpayers be helping foot the bill by it being deductible. Capitalism, you believe in capitalism. I do. You believe in a free market. I do. One of the most basic tenants of free market is negotiation based on volume. Walmart became the behemoth they are because they negotiated with their suppliers based on volume to get lower and lower cost to them, which they then passed on to the consumer. Correct . Yes. Okay. You said earlier today that, quote, every incentive is towards higher prices in the pharmaceuticals. So do you believe that negotiation in fact would be an incentive to lower prices . Negotiations do lower net prices off list price. They do in fact, and if succeeds quite well. Thats an incentive. That would be an incentive that is currently in your testimony, theres no the incentives for prices right now. List prices. Its not an incentive on list prices. We have negotiation that pulls down what the taxpayer pays and what the individual pays. But that list price, the incentive im very aware theres a lot that goes on behind the curtain. Im very aware that for most folks that are getting their drugs, theyre getting more and more expensive and we do not have the ability in the federal government to negotiation for lower prices based on volume. We actually do. No, we dont. We dont on medicare. The largest prescription benefit programs get the best net pricing of any commercial payers in the United States. I did that. I know that world. What youre saying is there would be no difference in the price if we removed the provision in the law that prohibits the federal government from negotiating for lower prices . Thats what the congressional Budget Office, what peter ort sack have all said, you wouldnt get better pricing by removing that. Thats crazy, thats nuts. Then theres something really wrong where the system. What youre telling me with a straight face is if we remove the provision that prohibits negotiating for lower prices, its not going to make a difference in the prices. No provisions for negotiating for lower prices. Thats happening right now. The government has these entities that do this notionation theyre paid to do that. The government could do it directly. By the way, and wouldnt that save us money . They wouldnt do any better. No, no, theres a middleman now. Theres a middleman now doing that negotiation. Its not the government. Right, and they do it better than the government would right now. The benefit is a government benefit. So if you take youre saying because its private sector, we should pay somebody to do it in the middle because the government cant do it . What we should do is those techniques that drive such good net pricing in part d, what can we take from the learning there into part b where i would focus, part b, which is physician administered drugs where we pay Sticker Price plus the markup on that. Right. No negotiation out of the government or any other entity can we take learning from how were managing to be under budget in part d on our expenses and managing a Program People enjoy and have satisfaction and take some of those for part b, and if we can drive prices down, that hits the patient, the Senior Citizen out of pocket because they pay a percent of it. The pharmaceutical industry wanted that in the law for a reason. They lobbied for it. The guy who helped get it through went to run pharma after he finished getting it through. It wasnt average consumers that wanted to make sure that it was illegal to negotiate for lower prices. It was pharma. And they were powerful, and they did it. I refuse to believe that they didnt want that there for a reason. Thank you, mr. Chairman. Thank you, senator. Senator cantwell. Thank you, mr. Chairman. In light of your news of your decision, i wanted to thank you for your work on the lowincome housing tax credit, not just this year but for several years in making sure that Program Continues to work Cost Effectively. Thank you so much. Could i make one comment before you begin . I believe having listened to senator browns questioning, i believe senator mcconnell is supportive of our c. H. I. P. Agreement. And i hope that our colleagues on the other side, especially senator brown, will help convince senator schumer to support this as well. Mr. Chairman. I havent seen it so far. All i can say is that i intend to get it done. Mr. Chairman. Yes. I appreciate your interest in getting this done. I spoke on c. H. I. P. On the floor yesterday, senator schumer came right after me and said he was very much committed to our legislation. Our bipartisan legislation. So thank you for that. Okay. Senator cantwell. Thank you, mr. Chairman. I would be remiss not to mention i met with my Provider Community on the c. H. I. P. Issue, and the level of anxiety in making sure we have continuity, notices that patients are getting is starting to definitely cause anxiety. Anyway, i wanted to go back to medicaid, if i could. Our expansion was over 600,000. And our uninsured rate was cut by 60 , uncompensated care was slashed. So to me, the expansion has been a success. Do you support an end or sunset or curtailing of the Medicaid Expansion . So i want to implement the program weve got. If we end up looking at any changes on the Affordable Care act Medicaid Expansion, i dont believe any of the proposals the president or i would support involve cutting medicaid or cutting the expansion. But rather slowing the rate of growth over the next ten years in the interest of sustainability. Thats my understanding of the math on that. So youre saying you actually support the block granting . Whether its block granting or other changes. Block granting, the devil there is in the details. Is there enough money for the program . You would have to figure out appropriate formulas and approaches around what the amount of money there. There is a that can appeal from notions of block granting because i think it helps the lines and the incentives where the states have the empowerment and the accountability to manage the dollars as their own, as washington does, really be creative and customize the use of the program and stretch it for their citizens. So i do think theres much that can be appealing. Listen, i get youre a nominee by this administration, but i want to be really clear on this point because my state has been really clear on this point. The proposals that have been considered on block granting and per capita cap, my providers have been very clear. Very clear. It is no innovation. Its simply a budget mechanism to cut medicaid. And the cbo saying that it would end up cutting one third over the next two decades, i think, is supportive of that. My support of you is going to be based on this, not because of politics of who you are or any of that, is going to be on whether im casting a vote to continue these policies or not. Theyre working. And my state will be the first, the first to innovate because we already are, and we had some conversations about that. So i just want to be clear that i view the previous proposals of block granting and per capita cap as cuts, as my Provider Community has made very, very clear to me. They have also said that with that kind of approach, they expect a private market insurance rate to go back up. That they have seen downward pressure on the prices given the expansion. And they dont want to see those go back up. Okay. Do you support the delivery another example of that is the Delivery System reforms we were able to do to get the population to move off of longterm care to communitybased care. Im assuming you support those kinds of efforts, as a true way of reforming and driving down costs. As we have spoken in your office, im completely supportive of notions. Sometimes institutional care for some individuals makes sense, but alternative home based, other care, im completely supportive of these kind of innovations. What could we do to drive that to a faster implementation, because we incented states to do it under the Affordable Care act, but if we took a more aggressive approach, thats where you would see savings. I dont know where the barriers are. I dont understand it. It seems so attractive to me. I dont understand it. I would love if confirmed to get your ideas if there are things hhs is doing that are getting in the way of that, i would like to know that because im 100 committed on this issue. Do you support medicares move from fee for service to value based . I absolutely do. One of the four priorities i would try to focus on as secretary. What about the basic health plan which is part do you support the concept of allowing some states to bundle up their low end population and drive down costs . It seems to me, i was delighted to learn more about it from our meeting, it seems to me a very attractive notion of how one help in that transition between the Medicaid Eligibility and the subsidy elements of the Affordable Care act, i want to learn more about it, but it seems to be very attractive. Thank you. Thank you, mr. Chairman. Senator widen. Thank you very much. Mr. Chairman, i have a couple questions. I want to make two unanimous consent requests to put documents into the record at this point because i think mr. Azar has in response to colleagues given incorrect answers. Senator nelson, for example, asked whether he was supportive of the president s position with respect to these issues, medicare, medicaid, Social Security. Mr. Azar said that the president promised he wouldnt cut it, and he has adhered to that promise. That is simply untrue. The president s first budget proposed cutting medicaid by hundreds of billions of dollars through proposals like block grants. I would like to put the budget into record, not the entire budget, mr. Chairman, but the part that indicates the answer to senator nelsons question is incorrect. Also, we have just gotten information well be happy to do that, but we should let mr. Azar respond to that. This is just a request to put information into the record. To further your statement, i wonder if he has any comment about that. I think this has to do with washington speak. A slower the rate of growth of a growing program is simply not a cut in my mind or the president s mind. Well, were talking about hundreds of billions of dollars, and the state medicaid directors point blank said, no flexibility is going to make up for the fact were talking about hundreds of billions of dollars worth of cuts. I also ask unanimous consent, mr. Chairman, that we put into the record documents from pugh trust and global data that certainly suggests the answer to senator mccaskill with respect to advertising and r d was incorrect because in 2013, according to these documents, they spent 5. 7 billion in sales and marketing and 5. 5 billion on r d, and he said that these budgets were not remotely close to each other. Without objection. Let me now, if i could mr. Chairman, i would like to clarify. The senators question is the advertising budget, which was about direct to consumer, and there is no way that was even remotely close to 5 billion at lilly. Not overall sales, general administratorive expenses. I dont have the Balance Sheets in front of me, so i cant speak to that, but theres no conceivable way the advertising budget was cles to r d spending. Well let people evaluate the data. You said the two were far apart. Let me go to the two questions quickly. Mr. Azar, weeks before the Health Committee, you said you supported proposals that would wipe out the medicaid guarantee for our Senior Citizens. This is the guarantee that picks up the tab for two out of three older people in nursing homes. 4,000 seniors in oregon each day, and you would wipe out that guarantee by folding medicaid into a block grant. I would like to know whether you still support walking back the medicaid guarantee for these older people and again, as i indicated, the nonpartisan medicaid director stated, and i quote, no amount of flexibility, their words, not mine, are going to compensate for those types of cuts. Would you like to walk back your earlier position with respect to that commitment to older people who did everything right, theyre still going to have a guarantee of nursing home coverage . I believe what we talked about at the Health Committee hearing was around the fact that block granting, i can find a lot of appeal in block granting, as i said here and i said here, which is the devil is in the details of how one structures the notion of any type of block grant, both enterms of the dollar amount and what strings from the government are attached to it, in terms of who needs to be covered, who is eligible but not necessary to cover. That all would need to be worked out in legislation, which were far from. Why dont you amplify this for the record because the chairmans courtesy, im going to do the last one quickly. It looks to me like you still want a block grant which the state medicaid directors say no amount of flexibility is going to be able to compensate for those cuts. My last question, you havent talked about. Thats title 4a of Social Security, what people know as welfare. Afdc, hugely Important Program to help families escape poverty and findwork. Right now, it looks to me like the pressure of success, the major measure for success is reducing the case loads at that program. I would like a different measure and would like to see if you would work with us on it. I would like the measure of success to be finding jobs for people so you can get out of poverty. So the question is, thats not the measure today. Would you work with democrats and republicans to change the measure, to actually change the program so that the measure is not reducing case loads but it is having people find work to get out of poverty . Yes or no. Absolutely. Thank you. Thank you, mr. Chairman for the extra time. Thank you. As i understand it, senator casey has one question, and then well wrap it up. You have one, too . Mr. Chairman. Go ahead. Thank you very much, mr. Chairman. Mr. Azar, i wanted to ask an additional question regarding the approach the administration has taken with regard to implementing the Affordable Care act, making our Health System work. Health care system work. It came to my attention and i think the attention of people across the country from a story in politico by efforts made by the administration to what i would argue would be sabotage the Affordable Care act. I have a report coming out that will outline some of those actions taken. Restricting enrollment is one. Canceling coverage, all kinds of efforts undertaken that resulted in us pushing to get a document from health and Human Services. It took months to get. Now were told that theres a new document that we referred to in a letter that we sent december 21st to mr. Hargen, the actor secretary. We state, and im quoting from the letter, hhs has developed a list of hundreds of other actions to sabotage health care for people nationwide. We go on to say, reference a spreadsheet. We conclude by saying please provide the spread sheet reference above, which lists more than 200 regulatory actions the administration is planning to take to further undermine health care. Thats our request. The response from health and Human Services on january 5th said they will not turn that over. In our Health Committee hearing, you said the following when i asked you about faithfully implementing the Affordable Care act. You said, quote, my job is to faithfully implement the program thats passed by congress, whatever they are. That would include the Affordable Care act is the law of the land and remains such. To implement it as faithfully as possible. Unquote. So my question is, in light of this recent history, history of what i would argue is sabotage, do you commit to providing that document that i referred to in the letter sent on the 21st, detailing the more than 200 planned regulatory actions that was developed and maintained by hhs, would you provide that and provide it in a timely manner without redaction . Ill be happy to look at that. As a nominee, i cant commit to governmental action. I dont know if that document was prepared in the Obama Administration or during the Trump Administration. What i can tell you is if i am confirmed as secretary, im a problem solver. I want to work with you and every member of this committee and other committees here to make this program work for people as best it can. I do think changes are needed. I think statutory changes are under way, but whatever we can do, i want to make insurance affordable. I want to make it work. Thats great. You have my commitment. I appreciate that, but this document developed under this administration, more than 200 actions, and its hard to square your statement in the Health Committee and other statements today with faithful implementation with this undermining of the Affordable Care act, with your support, which is evident from some other questions for legislation that would further undermine it, especially on medicaid. But i hope that the American People will have the kind of transparency that they should have a right to expect when it comes to this kind of sabotage. Thank you, mr. Chairman. The last question, senator carper. Thank you, oh, no. Did you have one more question . I had questions, yeah. Well, let me first go to senator mccaskill and then im coming to you, senator carper, and youre going to be last. Senator Susan Collins and i did a long and thorough investigation in the committee on aging last year. On price hikes. A couple of really good poster children for hedge funds who found a drug that was being sold for pennies and then they managed to spike them up to thousands and thousands of dollars. You have a chance to read the report from our investigation . I have only seen summaries of it, but i do want to look at that and get any ideas that you all were able to come up with there that we could do if im confirmed at hhs to work on these issues. I would appreciate that. We spent a lot of time looking at it. Its obscene. Nobody was happy when mr. Wutang was convicted. I dont know if you have worked with dr. Gottlieb on this yet. Hes very concerned. Theres this issue of these generics distortions that have happened and how can we build more competition and invite it in. Im very committed on that. Do you believe the patent system is being abused . I believe there are abuses. Do you believe that the orphan drug law is being abused . I do think we need to i dont know if i want to call it abuse. I want to look at it more because i dont know enough to use that word. But i know that there are issues around continued exclusivity across all indications or expansion where theres an orphan indication. I want to look at that. It may be simply what the law provides in which case if we dont like that, thats a legislative question for us as opposed to manipulating a loophole. I dont know. I would like to learn more about that. When we were there last week, it was announced it went from zero to 15,000 a bottle. That drug has been around for decades. And they slapped 15,000 on one bottle of it. Theres something really wrong here. Im going to take you at your word. Were all skeptical over here because of what we have been through the last 12 months. I hope i can i hope if im confirmed i can earn your trust and your confidence of my treatment on these issues. Me too, because drug prices are a huge problem in the country right now. I want to work with you, and i hope a year from now, you say you proved me wrong. I hope so, too. Thank you. Senator carper. Would you briefly tell us who the folks are behind you . Yes, thank you very much. So im joined by my wife jennifer, my daughter claire, my son alex, my father, dr. Alex azar, who was in newark delaware, when he worked at dupont when i was a child growing up. My sister stacey and her husband mick. Glad youre here. As governor, one of the things we focused on, Family Services family council, it involved half of my cabinet. We focused on the basic Building Block of our society family, how do we strengthen and stabilize families. We started with a statewide campaign on teenage pregnancy. Delaware had one of the highest teenage pregnancy rates. We put together a bunch of kids in the state to tell us what we ought to do in a comprehensive statewide approach, we did it. The teen pregnancy rate is a lot lower than it used to. But the unplanned pregnancy rate in our state, in our country, is still around 50 . Think about that. Around 50 . One of the most reliable forms of contraception available is something called lux. Long acting reversible contraception, the most reliable form of contraception. Less than 10 take advantage of inuterine devices or implants, but they work. You dont have to worry about taking them every day or stopping what youre doing and, you know, get ready for making children or not. But at any rate, what are the policy and economic barriers to expanding the use of these longacting reversible contraceptives. What are the steps we could take to expand access to them and lower the rate of unplanned pregnancies in the United States. Again, roughly half of the pregnancies are unintended. A lot of them young people who are involved. Im not as knowledgeable as i would like to be and would love to learn mow about it from you. I would assume we provide it through title 10 at hhs. If there are barriers, i would love to learn more about it from you. You have studied this more than i have. I believe in going after root causes. The problem, one of the big problems in our society is poverty. And i think it was mare yn wright adelman who said you can take a 16yearold girl who is in high school, she becomes pregnant. Has a child, drops out of school, doesnt marry the father. The theres an 80 chance theyll live in poverty. Same 16yearold girl does not become pregnant, does not drop out of school, waits to 21 to have a child, and married the father of the child. The likelihood that family will end up in poverty is 8 . 80 on the one hand, 8 on the other. When i found out that, i got serious. Last year, i think massachusetts under the leadership of governor charlie baker, very impressive government there, very impressive leader. They passed legislation to require all Health Insurance plans to cover Birth Control without cost sharing. I want to ask if, again, this may not be a fair question, if its not, you can say so, but do you agree with the massachusetts requirement that all Health Insurance plans in their state should cover all forms of Birth Control without cost sharing . I have no issue with states making those choices. Thats exactly the kind of competition states making choices like that, thats what they ought to be doing, is making their choices about how to run their Health System. All right, thank you. Senator mccaskill was asking questions, i came in the room on drug pricing. And i hope im not going to cover the same territory, but let me ask this question nonetheless. If youll bear with me, i appreciate it. Current administration has repeatedly promise said to tackle high drug prices. They neglected to back up the rhetoric with meaningful results. Several Drug Companies have tried to address the challenge of high drug prices with more Price Transparency and proposals for valuebased pricing. What regulatory and statutory barriers impede the use of valuebased pricing to lower drug costs, and as hhs secretary, how will you bring together the Drug Companies, one of which you used to lead, how would you bring together pharmacy benefit managers, Health Insurancers, to put together valuebased drug pricing proposal that can be implemented quickly to bring some relief to consumers . So, its a great question. You put your finger on one of the key issues, is around valuebased pricing, how can we have outcomebased, valuebased, you pay for the value youre getting on the drug. One of the Biggest Barriers is the price reporting regulations that hhs has. It really has to do with how you report over time, because of course, youre striking an agreement and paying for a drug here. But then it might be several quarters later until you get the data on the results. And the problem is then you would end up having a trueup or a change on past price reporting, which is generally not viewed as a good thing. So i do believe this is within hhs jurisdiction, if im there, we can fix that and we can address that to create pathways where you can really put your money where your mouth is and support the value on the drug. If it doesnt deliver, then pay more discounting or rebates in return. So i actually think this is very actionable, senator. Thats great. I want to commend you on your choice of people to sit up there with you at the beginning of the hearing. Mike levts succeeded me. Tommy thompson from wisconsin, who preceded all of us as chairman of the nga. One of my favorite people, loved being their colleague. You couldnt have two finer people sitting next to you. You got good ones sitting behind you as well. One of them works for dupont for many years. My wife is retired from dupont. Went to work there over 35 years ago and had a great career there. We love dupont in our state. Thank you. Good luck and congratulations. Okay, well, we finally got to the end. I want to thank you for what i consider to be a very elevated testimony. Theres no question in my mind and there shouldnt be in anyones mind of your competence and your abilities to be able to handle this very, very important job. In all the time i have served in the United States senate, i have worked with hhs and other agencies as well. And i have to say that youre one of the best Public Servants that i have seen in the whole time that i have been here. And i think you handled yourself very well in front of this committee, and hopefully we can get you up and out as soon as we possibly can. So with that, i just want to welcome your family and thank them for sitting through this. And im going to come back and say hello to everybody, but god bless you, and with that, well recess until further notice. Wrapping up the Senate Financial Committee Hearing on the confirmation of alex azar, President Trumps nominee to head the department of Human Services. If you missed any of the hearing its available to watch any time on our website, go to cspan. Org and search alex azar or Senate Finance Committee Hearing. While we do offer you the option to see it later, we will show you the hearing again from the beginning of what happened today starting with Opening Statements, right now. The committee will come to order. Welcome, everybody, to this mornings hearing. Today, the committee will consider and examine the nomination of mr. Alex azar, to serve as the secretary of health and Human Services, one of the most important jobs in any government anywhere in the world. I would like to welcome mr. Azar to the finance committee this morning. I want to thank you for