Last month, CMS Administrator Seema Verma submitted to an interview with reporter Avik Roy from Forbes Online magazine. The wide-ranging interview captured Verma's opinions of the Affordable Care Act and its individual mandate to purchase insurance, skyrocketing drug prices, and the nomination of her fellow Indianan, Alex Azar, as Secretary of Health and Human Services.
In the interview, Ms. Verma connected those last two discussion topics. She told Mr. Roy that Azar would be a tremendous asset if confirmed because he understands the ins and outs of drug pricing, which she said is a top priority for the President. "I think his experience in the pharmaceutical sector is actually going to be very valuable," she said. "I feel like we'll come out with something that is a balanced solution. I think he'll be a tremendous asset."
The interviewer did not ask her about Azar's activities as President since 2007 of Eli Lilly Pharmaceuticals subsidiary Lilly USA, LLC. He did not ask her about Azar's successful efforts to raise drug prices, described by Hilary McQuie, writing in The Hill, as "his history of working to advance predatory pricing, including tripling the price of insulin." Azar would be the first former drug industry executive to lead HHS since it was created in 1953.
Controlling drug pricing
Ms. Verma told Forbes that her agency is looking at drug costs very closely. "We started with just looking at the data, what does the data tell us? If we look at it, we've got within the Medicare and Medicaid programs, so we've got Part B, we've got Part D, and then we also have the Medicaid program. When we look at, just starting with the Part D program, if you look at where we've been, people are talking about increases with drug prices, but if we look actually at the premiums in the Part D program, they've actually been level. So, our Medicare beneficiaries have not been paying more for their medications in terms of the premiums for Part D. Even just this last year, the premiums went down.
"There's also plenty of examples of what I call bad actors or issues. I think we all remember the stories around EpiPen, but it's really around those new drugs that are coming out, those high cost drugs. Those present challenges not only in the Part B program, Part D, but also for our Medicaid programs where state budgets are not prepared when a new drug, and I think we saw this with the hepatitis C drugs that came out, new drugs coming out on the market, very expensive, and they're not prepared to pay for it because of the way their budgets work. I think that, that's where we have the challenge."
Controlling bad actors
A letter to the Senate and signed by more than 60 interested groups, from physicians' associations to labor unions to advocacy organizations, details Azar's history at Lilly as well as his stated desire to convert Medicaid to a block grant program. "
During Mr. Azar’s time at Eli Lilly, the company more than tripled the price of insulin from $74 to $269," the letter asserts, "with much of the increase occurring during Mr. Azar’s tenure as President of Lilly USA. As a result of Eli Lilly’s insulin price hikes, patients report self-rationing treatment by skipping refills, injecting expired insulin, and starving themselves in ineffective attempts to control blood sugar levels. These unhealthy behaviors resulting from Eli Lilly’s insulin price spikes can lead to kidney disease and failure, heart disease and heart attacks, infection, amputation, blindness, and death.
Other cost-cutting plans
"We just released our C and D proposed rule," Ms. Verma told Forbes. "In that rule we even talked about potentially exploring the idea of whether we should be passing on the manufacturer rebates for patients. What we see there is our data shows us that would actually increase premiums and so that would be a cost to the taxpayers. We're exploring that idea, we put it out for comment. We also proposed some ideas about making generics more available or biosimilars, so there's a lot of things that we're trying to do within the Part D program to hopefully create more competition and hopefully lower drug prices for our beneficiaries."
According to investigative reporter Reis Thebault, writing for online healthcare journal Tarbell, declares, "If Azar wins the job, it would signal a final industry takeover of the levers of influence in Washington, say critics. The drug industry is already one of Washington’s most powerful lobbies, with money that flows to key politicians and groups to ensure assistance or silence." For a 20-year historical chart of pharmaceutical industry campaign contributions, click here.
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