HHS nominee Alex Azar supports mandatory CMMI models

Former Eli Lilly executive Alex Azar faced another grilling before members of Congress, being questioned by the Senate Finance Committee, which will decide whether to advance his nomination to the full Senate. The hearing highlighted one major difference between Azar and former HHS Secretary Tom Price, MD, when it came to mandatory payment models.

Price had been a staunch opponent of mandatory models created through the Centers for Medicare and Medicaid Innovation (CMMI) before taking over as HHS Secretary. During his short tenure at the helm, the agency cancelled two mandatory bundled payment models—Advancing Care Coordination through Episode Payment Models (EPMs) and the Cardiac Rehabilitation Incentive (CRI) model—with CMS later soliciting comments on CMMI’s future with the promise of announcing voluntary initiatives.

Sen. Mark Warner, D-Virginia, assumed Azar should share Price’s view, but Azar corrected him, saying he supports using mandatory models through CMMI in some instance.

“I believe that we need to be able to test hypotheses,” he said. “I want to be a reliable partner. I want to be a collaborative in doing this. I want to be transparent and follow appropriate procedures. But if to test a hypothesis around changing our healthcare system it needs to be mandatory as opposed to voluntary to get adequate data, then so be it.”

Groups that have supported Azar’s nomination, most notably the Federation of American Hospitals (FAH), have been fierce opponents of mandatory models, with the FAH arguing those payment experiments are outside CMMI’s authority.

The questioning before the committee featured many repeated topics from his earlier hearing before the Senate health committee. Democrats questioned price hikes at Eli Lilly during Azar’s tenure at the company like a 124 percent increase for insulin products and doubling the price of osteoporosis drug Forteo. Azar said every incentive in the market goes against pharmaceutical companies lowering prices, and said he wants HHS to combat those incentives through a variety of methods, like promoting competition from generics and biosimilars and fighting “gaming” of drug patents.

“There’s no silver bullet here,” Azar said. “The most important thing we have to figure out is can we reverse the incentives on list prices.”

Some of the blame on higher prices in the U.S., Azar said, falls on “single-payer, socialist” healthcare systems in the European Union and Canada where government regulators determine a “take-it-or-leave-it” prices—in his words, “not paying their fair share.” Azar said those issues could be addressed through trade agreements.

As for lowering drug costs by allowing price negotiation through Medicare Part D, Azar remained opposed, saying it would create a national formulary like those European systems.

“I don’t believe we want to go there,” he said.

On many matters, Azar appeared closely aligned with Republican health policy efforts over the past year. He expressed support for the Graham-Cassidy legislation to replace the ACA, specifically its provisions on turning Medicaid into a state-administered block grant program. He also spoke in favor of finding ways to allow insurance companies to sell plans across state lines as a means to increase competition, though insurers themselves have shown little interest in the idea.

Medicaid changes proposed by CMS Administrator Seema Verma, MPH, were the subject of a testy exchange with Sen. Sherrod Brown, D-Ohio. Brown pressed Azar on whether he supports work requirements for Medicaid beneficiaries and interrupted Azar several times when he didn’t offer a definition of an “able-bodied” adult. Brown said allowing states to impose such requirements in Medicaid could exacerbate the opioid epidemic.

“They will lose their opioid addiction treatment coverage if this administration does what it tried to do earlier,” Brown said, referring to ACA repeal bills which would’ve cut Medicaid funding.

Some Republicans didn’t receive answers to their questions either. When Sen. Dean Heller, R-Nevada, asked Azar how he’d direct HHS to address the pending physician shortage, Azar called it “a vexing problem” but asked for suggestions from Congress rather than offering his own.

Azar’s confirmation looks likely. Despite the Republican majority in the Senate being slimmed down to 51-49 after Sen. Doug Jones, D-Alabama, was sworn in, one Democrat has already announced he’ll back his nomination—enough to put Azar over the top if all other Democrats vote against him.

“Alex is going to go in the right place at the right time with his knowledge and experience—I really think so,” Sen. Joe Manchin, D-West Virginia, told POLITICO. “If you're looking for a reason to be against him, I'm sure they can find it. But I think he can do a good job.”

However, one Republican—Sen. Rand Paul of Kentucky—could vote against Azar. In Azar’s earlier hearing before the Senate health committee, Paul said he needed more convincing that Azar wouldn’t be a representative of Big Pharma, and if Azar didn’t support allowing importation of drugs from countries where costs are lower, Paul wouldn’t support his nomination.