National News

Trump’s New Health and Human Services Secretary Is a Joyful Regulator

Posted May 18, 2018 6:55 p.m. EDT

Alex Azar, President Donald Trump’s new man running health policy, was waving a Pilot ballpoint in front of a room full of reporters.

“This pen has a lot of power,” he said, smiling at his own joke.

He is right. As Health and Human Services Secretary, Azar does have a lot of power to change health policy, without having to go through Congress. And in a sharp break from his predecessor — and from most Trump Cabinet secretaries — he seems to be relishing the chance to write new regulations, rather than just crossing out Obama-era ones.

His department is doing its part to support some Trump campaign promises, by allowing health plans that could undermine some Obamacare protections and, as reported Thursday, by working on rules meant to limit federal funding to Planned Parenthood. But Azar has said little about those initiatives in public. Instead, he has embarked on a blitz of speeches and interviews about proposed new policies related to drugs and medical payment.

Azar appears to be a joyful regulator, eager to wield his power to change the way medicine is practiced.

Azar’s predecessor, Tom Price, approached the secretary’s job with a very different perspective (until resigning under pressure in September). As a former doctor, Price was wary of government-mandated changes to the practice of medicine. As a former congressman, he put more focus on legislation. When it came to payment policy, Price’s legacy was largely as a deregulator. He canceled experimental programs started in the latter days of the Obama administration. Those projects, he said, had sought to “commandeer clinical decision-making.”

“Alex is night and day from Tom Price,” said Dan Mendelson, president of the health consulting firm Avalere Health. Mendelson described Azar as more enthusiastic about regulation, and better equipped to undertake it. “He knows where all the levers in the department are,” he said.

In his public appearances, Azar is eager to name-check the president, and he has said that the two of them have met often to discuss the drug policy agenda.

Drug prices have recently been a favorite issue of the president, and one that Republicans in Congress hope to run on this fall. High drug prices are a major consumer issue, and getting them lower is the top health care priority of voters in most surveys.

It’s a bit of a strange fit. Azar came to the job from the big pharmaceutical company Eli Lilly, where drug prices rose on his watch.

A week ago, Azar and the president delivered speeches and a white paper on what they would do to lower prices. But most of the proposals seemed a little vague and speculative. As Larry Levitt, a vice president at the Kaiser Family Foundation, noted on Twitter, the drug price proposal had more than 130 questions, a sign that some important policy details were still unsettled. Pharmaceutical stocks rose on the news.

But since then, Azar has been making the Washington rounds, and declaring that he has a more aggressive regulatory agenda. He gave a longer drug pricing speech Monday, before sitting for an hourlong news conference with reporters on the fine print.

On Monday night, he appeared on PBS NewsHour, saying his job provides him with a “shocking amount of power.” On Wednesday, he delivered a speech still wonkier at the American Enterprise Institute, smiling even more. He warned that if industry didn’t cooperate with his plans to lower drug prices, his office stood ready to “keep turning up the pressure.” On Thursday, he sat down with Politico’s podcast Pulse Check, and emphasized that the president supported his agenda.

Azar has yet to specify details on the most disruptive ideas in his plan. He has also ruled out several of the broad approaches frequently championed by liberals — and by Trump, when he was a candidate. His plans don’t take direct aim at the prices that drug companies charge. Despite Trump’s campaign promises, Azar is not calling for the government Medicare program to negotiate directly with drugmakers, nor will he call for the re-importation of drugs from Canada, where they are generally cheaper.

But Azar’s proposals suggest a detailed knowledge of the different actors who decide what drugs should be bought at what price — and a willingness for smaller, more technical tinkering to their incentives. He held several senior positions in the Health and Human Services Department under President George W. Bush, and it shows.

Peter Bach, director of the center for health policy and outcomes at Memorial Sloan Kettering Cancer Center, and a crusader against the high cost of certain drugs, said he was impressed by the intricacy and ambition of Azar’s ideas. “I feel very much like they are inside the machine, and they have a number of tools that can really change it,” he said. “And my read of the secretary is he comes in with a font of knowledge.” Azar knows, for example, his various sources of authority. “The Secretary of HHS is invested with incredible authority to regulate, to modify programs, to do demonstrations, to experiment, and we intend to use the full scope of the power contained in this pen on any of these rather than sitting back and waiting for Congress,” he said Monday.

A big source of that discretion comes from the Affordable Care Act. Though Trump and the Republican Congress sought to roll back large portions of the health law, Azar specifically cited its innovation authority Monday as an opportunity for policymaking. Obamacare allows the HHS secretary to test new theories about how to pay for medical care, and to expand those pilots program-wide if they prove cost-saving and effective.

His office is taking actions to weaken Obamacare’s regulation of health insurance and to allow states more flexibility to attach work requirements to Medicaid benefits. Overall, he has been critical of Obamacare. But he’s still willing to use the parts of it that are useful to him.

A few of the ideas seem likely to rankle powerful interest groups. He has mentioned changing the way Medicare pays for drugs — like chemotherapy treatments — that are administered in doctors’ offices. An Obama administration attempt to modify that system was withdrawn under intense pressure from doctors, hospitals and the pharmaceutical industry.

Azar has also taken aim at the most common business strategies of the pharmaceutical benefit manager industry, a set of companies that negotiate drug prices for insurers. He is also seeking to weaken rules requiring Medicare to cover all drugs for diseases like HIV and cancer, a change likely to anger both drugmakers and patient groups. From across the conference room, Azar’s powerful pen looked like the basic model it was. We’ll see if it survives the coming battles with industry — and potentially with politicians in his own party, who have been concerned in the past about the secretary’s broad authority.

“There’s a long-standing medical joke: What’s the most expensive medical device?” Bach said. “And the answer is the doctor’s pen. I don’t know if he’s thinking about that as he said it.”