Specter of Shkreli Looms over Trump HHS Pick, Under Barrage of Criticism for Eli Lily Price Hikes


President Trump’s second pick to run the Department of Health and Human Services acknowledged that he oversaw the jacking up of drug prices, as as a pharmaceutical executive.

Alex Azar deflected criticism from Democrats on Tuesday, while testifying before the Senate Finance Committee. The nominee said high prices were a systemic problem, and that he wasn’t personally responsible for the trend, as the former President of Eli Lily.

“I don’t know that there is any drug price of a branded product that has ever gone down from any company, on any drug in the United States, because every incentive in this system is toward higher prices,” he said.

Azar was responding to questions from Sen. Ron Wyden (D-Ore.). The top ranking Democrat on the committee produced graphs during his inquiry to illustrate sharp increases in the prices of two drugs while Azar headed Eli Lily, from 2012 until early last year.

The wholesale prices of Forteo and Stratera increased by about 270 percent and 210 respectively, while Azar was at the helm of the pharmaceutical giant. Forteo is used to treat Osteoporosis, while Startera is prescribed for Attention Deficit Hyperactivity Disorder.

Sen. Claire McCaskill (D-Mo.) seized on this line of questioning during the hearing, referencing Martin Shkreli, the now-imprisoned ex-pharmaceutical executive, convicted in August 2017 of securities fraud.

Shkreli became infamous in September 2015, when The New York Times reported on how he purchased the rights to the drug Daraprim, then increased its price by over 5,000 percent. Daraprim is used to treat parasitic infections.

“No one was happier when Mr. Wu-Tang was convicted,” she said, referencing Shkreli’s similarly controversial purchase of a Wu-Tang Clan album. One copy was sold by the Staten Island, N.Y.-based rap group at an auction, in November 2015.

Azar told McCaskill he would read a report on price spikes in the drug industry coauthored by the senator and her colleague, Susan Collins (R-Maine). The investigation, which was released in late 2016, was sparked by The Times’ report on Shkreli. The former executive’s Daraprim price gouging was itself perfectly legal.

Earlier in the hearing, McCaskill also pressed Azar about another controversial pharmaceutical industry practice–direct-to-consumer marketing. She honed in on tax write-offs drug companies receive for advertising, and how the subsidies encourage patients to effectively prescribe themselves.

“I can be thin. I can be happy. The one that kills me is the one for erectile dysfunction where they have ’em in two bath tubs,” McCaskill said, alluding to TV commercials for Cialis, an Eli Lily drug.

“How crazy is that? That isn’t happening,” she added.

On Tuesday, Politico reported that while Azar was in charge of Eli Lily, the company tested Cialis for off-label use on children with a type of muscular dystrophy. Competitor Pfizer did the same with Viagra, on kids with respiratory problems, the paper also noted.

Through the experimentation, under a law ostensibly crafted to promote research, companies are able to get extensions to their patents.

Azar was nominated by President Trump in November to run the Department of Health and Human Services. Trump’s first choice to run the agency, former Rep. Tom Price (R-Ga.), stepped down after Politico reported he spent hundreds of thousands in government funds on personal travel.

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Since 2010, Sam Knight's work has appeared in Truthout, Washington Monthly, Salon, Mondoweiss, Alternet, In These Times, The Reykjavik Grapevine and The Nation. In 2012, he worked as a producer for The Alyona Show on RT. He has written extensively about political movements that emerged in Iceland after the 2008 financial collapse, and is currently working on a book about the subject.


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