LLY Eli Lilly and Co

By Stephanie Armour and Thomas M. Burton 

Alex Azar, a former pharmaceutical executive selected by President Donald Trump to lead the Department of Health and Human Services, told senators Wednesday that he has the experience to lower drug prices and supports steps to roll back the Affordable Care Act.

Mr. Azar used his first confirmation hearing to become HHS secretary to assure lawmakers that his position as past president of an Eli Lilly and Co. affiliate gives him the knowledge to help bring down drug costs. His tenure there has prompted criticism that Mr. Azar would tread softly on pharmaceutical companies.

He also said the ACA has fundamental problems that need to be addressed.

"I obviously believe statutory changes would be good to change that system," he said, adding, "I would disagree that there's any effort to sabotage the program."

Mr. Azar said he supports a Senate Republican proposal to repeal the ACA requirement that most people have health coverage or pay a fine. He also backed the idea of potentially turning Medicaid into a block grant program, saying that would give states more stewardship. Democrats warn that such an approach would lead to significant funding cuts.

If confirmed, Mr. Azar would head a $1 trillion agency that implements the ACA, runs the Medicaid and Medicare programs, and oversees such critical agencies as the Centers for Disease Control and Prevention and the National Institutes of Health.

He would replace former HHS Secretary Tom Price, who resigned in September over his use of private and military planes for official travel. The Senate Finance Committee will hold a separate hearing on Mr. Azar's nomination.

Mr. Azar has previous experience at the agency. After working for the George W. Bush campaign in 2000, he became general counsel at HHS and stayed on as deputy secretary. "For me, if I were confirmed, this is returning home," he said. "This is the place I want to be."

Mr. Azar would take over the department at a turbulent time. Following the failed Republican effort to repeal the ACA, the Trump administration and GOP lawmakers have been seeking ways to chip away at the law, while Democrats scramble to fight off those moves and bolster the law.

Senate Republicans have attached a provision undoing the individual mandate to their tax overhaul. At the same time, more Republicans are supporting a plan by Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.) that would bolster the individual insurance markets, hoping to offset any premium increases that would result from repealing the mandate.

The nonpartisan Congressional Budget Office damped those hopes Wednesday, saying the Alexander-Murray bill wouldn't significantly change the fact that repealing the individual mandate would result in 13 million fewer people having insurance and premiums rising about 10% a year over each of the next 10 years.

Democrats are hoping large numbers of people will sign up in the ACA for 2018 during the current open enrollment period, which began Nov. 1 and extends through Dec. 15. HHS said Wednesday that almost 2.8 million people have selected plans so far.

At the hearing, senators quizzed Mr. Azar on his plans to bring down drug prices, his potential implementation of an emergency declaration on the opioid crisis, and his support of funding for women's health services.

In his first direct comments on drug prices since his nomination, he said the system works well for drug companies but it "is not working for the people who have to pay out of pocket." He said he "absolutely" believes the department must take regulatory steps to lower pricing.

Pushed for specifics, Mr. Azar largely mentioned steps that Food and Drug Administration Commissioner Scott Gottlieb has already undertaken. Dr. Gottlieb is fighting attempts by drug companies to make it hard for generic companies to get enough of a brand-name drug to test it and produce a generic version.

Mr. Azar also said he opposes letting companies file multiple patents as a means of warding off competition from generics.

Democrats zeroed in on Mr. Azar's tenure at Eli Lilly because the company has been criticized for raising prices. "The fox guarding the henhouse, is what I hear," Ms. Murray said.

Mr. Azar said that if confirmed he would return in six months with solutions to prevent the pharmaceutical industry from manipulating the system to keep drug prices high.

"These private and public sector experiences do prepare me very well for the role of secretary," he said. "The current system of pricing insulins and other medicine may meet the needs of many stakeholders, but it is not working for patients who have to pay more out of pocket."

Regarding the ACA, Mr. Azar said he would uphold it as long as it is in place but made it clear he is critical of the law. He said he supports a Trump administration rule giving employers wide latitude to avoid providing birth-control coverage to employees.

"I do believe we have to balance, of course, a woman's choice of insurance she would want with the conscience of employers and others," he said.

Mr. Azar is widely expected to be confirmed, in part because Republicans hold a 52-48 advantage in the Senate.

Write to Stephanie Armour at stephanie.armour@wsj.com and Thomas M. Burton at tom.burton@wsj.com

(END) Dow Jones Newswires

November 29, 2017 15:14 ET (20:14 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.