HHS Nominee Oversaw Big Drug Price Increases at Lilly
November 13 2017 - 3:45PM
Dow Jones News
By Peter Loftus
President Donald Trump said in a tweet Monday that his nominee
for secretary of Health and Human Services will be a "star" for his
ability to lower drug prices, but during Alex Azar's tenure as an
Eli Lilly & Co. executive prices rose dramatically for some of
the company's top drugs.
Mr. Azar, a lawyer who served as a deputy HHS secretary in the
George W. Bush administration, joined the Indianapolis company in
2007 as senior vice president of corporate affairs and
communications. He rose through the ranks and in 2012 was promoted
to president of Lilly's U.S. pharmaceuticals unit, Lilly USA.
As head of the U.S. business, Mr. Azar oversaw sales teams for
drugs including the erectile dysfunction treatment Cialis and the
blood thinner Effient. He also oversaw negotiations with health
insurance plans aimed at persuading them to pay for Lilly's
products.
While Mr. Azar headed the U.S. business, Lilly came under
criticism for raising prices for some of its drugs, including a
more than doubling in the U.S. list price for Humalog insulin
between 2011 and 2016.
Lilly has said it pays undisclosed rebates and offers discounts
to health insurers and pharmacy-benefit managers that reduce the
cost of its products, including Humalog. In 2016, Lilly said the
average U.S. list price across all of its drugs rose 14%, but the
average net price after rebates and discounts went up by just 2.4%.
Those averages can obscure significant price boosts on individual
drugs.
Moreover, a growing number of patients don't benefit from the
discounts, because they have high-deductible health-insurance plans
that require them to pay the full list price for drugs, or a
portion of it, for at least part of the year, until they meet their
deductibles. That helped drive public anger about insulin
prices.
Other insulin makers including Sanofi SA and Novo Nordisk A/S
also were criticized for raising prices substantially.
An Eli Lilly spokesman said Mr. Azar "had a successful career at
Lilly, and we wish him the best in his future work." Mr. Azar
couldn't be reached for comment.
The attorneys general in states including Minnesota, California
and Florida have requested or demanded information from Lilly about
insulin pricing, Lilly disclosed in regulatory filings. Lilly has
said it is cooperating with the requests.
Sanofi and Novo Nordisk also have received state attorney
general inquiries about their insulin pricing, and have said they
are cooperating.
Lilly's American revenue was choppy during Mr. Azar's tenure as
U.S. chief because of patent expirations for top-selling drugs such
as the antidepressant Cymbalta and osteoporosis drug Evista, which
allowed competitors to sell cheaper generic versions. Lilly's U.S.
sales declined sharply in 2014, but have risen since, helped by new
drugs such as Taltz psoriasis treatment and Jardiance for
diabetes.
In January 2017, shortly after David Ricks replaced John
Lechleiter as Lilly's chief executive, the company said Mr. Azar
was leaving Lilly to pursue other career opportunities.
Mr. Azar this year started a business, Seraphim Strategies, that
provides consulting to drug companies and health insurers,
according to his LinkedIn profile.
Last year, HMS Holdings Corp., which provides services to health
insurers, named Mr. Azar to its board of directors. A spokeswoman
couldn't immediately be reached to comment.
Write to Peter Loftus at peter.loftus@wsj.com
(END) Dow Jones Newswires
November 13, 2017 15:30 ET (20:30 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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