January 16, 2018

Who's Alex?

Alex Azar is almost certain to be confirmed as the next head of the Department of Health and Human Services, taking the place of Tom Price, the previous chief, who resigned after a few months following the revelation that he frequently used taxpayer money to pay for chartered flights for himself. Azar will likely be confirmed despite a major conflict of interest: for ten years (2007-2017) he worked for Eli Lilly, the 14th largest pharmaceutical company in the US, starting out as a top lobbyist and ending up as President. He left Lilly to start a consulting company, Seraphim Strategies, which doesn’t seem to have a website but reportedly consults to the pharmaceutical and health insurance industries. My guess is that the consultations involve helping Pharma and the insurance companies get what they want from Congress.

The reason I suspect this conflict between Azar’s work for Pharma and his role as head of HHS won’t matter to Congress is that Tom Price’s purchase of stock in a biomedical firm when he was a member of the House of Representatives didn’t bother Congress, even though Price bought the stock just before Congress was to pass legislation that would benefit the company in which he was investing. And Azar, unlike most of Trump’s cabinet appointees, is both smart and knowledgeable about the agency he is to head—he served as deputy secretary of HHS under Bush 2.

There are some positives with respect to the Azar nomination. I was pleased to learn that during his confirmation hearings this past week, he supported mandatory participation in “bundling;” an approach to payment introduced under Obama in which physicians, hospitals, and rehab facilities receive a single payment for a given “illness episode” such as hip replacement, giving them an incentive to work together to optimize care. The reason that Azar didn’t favor voluntary participation in such a program is that he understands that if we are to collect meaningful data on its efficacy, we mustn’t confine participation to those institutions that wanted to participate. He’s right, and seems to endorse the value of assessment of new programs and to understand what constitutes scientifically valid evaluation. There’s another aspect of his background that is in Azar’s favor: his grandfather immigrated to the U.S. from Lebanon, which he would do well to remember when he participates in Cabinet meetings at which immigration is discussed.

As I already indicated, I’m not sanguine about stopping the nomination of someone just because of his past dedication to the pharmaceutical industry. Yes, prices of drugs such as insulin tripled during his tenure as President of Eli Lilly. Yes, Lilly paid a $1.415 billion settlement to the Department of Justice in 2008 for illegally promoting the off-label uses of the antipsychotic drug (in particular, Lilly peddled the drug to nursing homes, alleging it was effective in treating dementia, which has not been established). And yes, the settlement included a $515 criminal fine, the largest ever health care payment of this kind—but the bad behavior occurred before Azar’s time at Lilly and the settlement with the DOJ occurred before he became President.

But I do think that Azar is the most conspicuous case yet of the “revolving door” in which former government employees draw on their experience and contacts in Congress to serve as highly paid lobbyists. Azar left his modestly paying job as deputy secretary of Health and Human Services for a far better paying job at Eli Lilly. The current value of his portfolio, according to disclosures he made to the Office of Government Ethics, is somewhere between $9.5 and $20.6 million.

Why is this phenomenon so pernicious? We’ve heard a growing chorus of complaints about the corruption that results because members of Congress spend so much of their time fundraising. Not only do legislators spend more time on the phone to potential donors than on the floor of the House or Senate; they are then beholden to their donors to pass legislation that is in their interest, not necessarily that of the public. But as Zephyr Teachout, a lawyer and would-be politician, argues in Corruption in America, the problem is both broader and deeper, and it’s something the founding fathers sought to guard against through constitutional prohibitions against public officials’ receiving gifts. “Corruption, in the American tradition,” she argues, “does not just include blatant bribes and theft from the public till, but encompasses many situations where politicians…serve private interests at the public’s expense.” And unlike England or France, the US “felt the need to constitute a political society with civic virtues and a deep commitment to representative responsiveness at the core.” Temptation and influence, in short, undermine the ability of our elected representatives to work in our interest.

How can we close the “revolving door” which Alex Azar waltzed through before and will no doubt use again? We already have a “cooling off -period,” following public office, during which lobbying is not permissible. But former government employees get around this by managing a group of lobbyists rather than serving on the front lines and registering as a lobbyist. Banning lobbying altogether seems too draconian and Congress is unlikely to shoot itself in the foot this way. 

What we need is a fundamental revision of the entire lobbying system that profoundly undercuts the ways in which corporations exert influence over government. In medicine, a multi-pronged effort was undertaken by state legislatures, hospitals, and professional physician associations to limit the baleful influence of pharmaceutical companies on the practice of medicine. “Pharmaceutical representatives,” otherwise known as “drug reps,” are now persona non grata in most hospitals and physicians’ offices. True, the industry responded by using more direct-to-consumer advertising than ever before, and by introducing “point of marketing” ads, in which they bombard patients with infomercials as they sit in physician waiting rooms. Constant vigilance is necessary to keep Pharma at bay. But surely putting a long-time advocate for the industry in the position of head of the Department of Health and Human Services is the wrong way to start. We need to double down on this major problem.

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