Alex Azar is sworn in as our new Secretary of Health & Human Services. Who is Mr. Azar and what can we expect.

Alex Azar is a Yale educated attorney who just may be uniquely qualified to lead the HHS at this time with the objectives laid out by President Trump.  Mr. Azar has practiced law in the real world as well as being the General Counsel for the HHS under President George W. Bush from 201-2005.

Mr. Azar was Deputy Security of HHS from 2005 until leaving in 2007 toward the end of the Bush administration. After serving at HHS for nearly 7 years, he was hired by Eli Lilly Co in 2007 to be a spokesman and lobbyist before ultimately being named Vice-President of US Managed Healthcare Services organization for Eli Lilly.

One unique fact about Mr. Azar is that he has never been a politician. Dating back nearly 40 years, every appointed & confirmed Secretary at HHS has been a career politician either Governor or Senator. Obviously, being a career politician does not really prepare one to make the decisions and take the actions that are needed to give our citizens the best services from an organization called Health & Human Services. Let’s face it; for most politicians the primary goal always seems to be serving for themselves.

There in lies a unique factor that may prove positive since Mr. Azar has not been be-holding to anyone for an election, a trait he has in common with President Trump. In addition, Mr. Azar was employed at Eli Lilly, a big pharmacy and healthcare company for roughly 10 years. That is important to note because we all know pharmacy costs continue to increase dramatically and nobody seems to be able or willing to control them.

It is also critical to acknowledge that the delivery of pharmacy benefits is a complicated function. In the Rx delivery business you have AWP (Average Wholesale Price), MAC (Maximum Allowable Cost, public plans such as Medicare or Medicaid, private plans such as your Anthem or Aetna plan, dispensing fees, and don’t forget rebates all of which make delivering your Rx very complicated.

Plus, the retail cost of an Rx in the US is much-much higher than in other countries including our neighbors in Canada and Mexico. In fact, people in Canada and Mexico can often purchase their personal prescriptions for 10% of what we pay in the US.  That’s right, what you might pay $100 for in Oregon or Maine is available for $10 in Mexico.
Now, who can understand or make sense of that?

The Rx delivery business is more complicated and potentially more abused than any other aspect of healthcare in the US. With healthcare cost increasing double-digit and premiums increasing sometimes by triple-digit it may serve the public well to have the Head of HHS understand the Rx business as well as how the HHS works.

President Trump publicly tasked Mr. Azar ( directed him actually) to reduce Rx cost dramatically. President Trump also publicly instructed Mr. Azar to continue with the objective of replacing the ACA with a better healthcare financing and delivery system.

How’s that for directions from your boss on your first day on the job?

So, Mr. Azar:

  • Is not a politician.
  • Beholding to no one – except the President.
  • Understands big Pharma and its:
    • R & D processes
    • Patent protection and effect on Generic vs. Brand
    • Profit margins
  • Delivery of Rx through private and public plans.
  • Law & business experience
  • Works for a President that:
    • Wants to lower cost
    • Improve access
    • Make a difference in people’s lives
    • Doesn’t give a darn about the way it has always been done!

In 2010 through 2014 we heard from and about the Secretary of HHS constantly because she was continually making announcements about the rules or regulations being developed for the ACA. On and on it went with restrictive-obtrusive-costly and damaging rules to make the ACA be what the Liberals wanted.

I suspect that we won’t hear that much from or about Mr. Azar except when the Liberal cry out about the piece by piece incremental changes to ACA. If Mr. Azar can reduce Rx costs, which is a huge “if” due to the power in Pharma, then we will all benefit.
But, we should not be overly optimistic about seeing Rx cost drop too quickly.

Can you imagine how hard it would be to make Northrop Grumman, McDonald Douglas or Lockheed Martin  reduce their costs 40% to 50% for the guns, airplanes and missiles our military requires to keep us safe. Believe it or not, that is a reasonable example of the battle Mr. Azar will have as he tries to lower Rx costs in America.
And, I am not exaggerating.

I am optimistic, though, about Mr. Azar’s chances of making a difference. He is experienced with the HHS, understands how Big Pharma works, plus he has a Boss (The President) who is demanding lower cost, better access, and better efficiency. These factors could make it possible to see the changes America needs and deserves.

There is much more we could discuss about Mr. Azar such as his positions on AHPs, selling across state lines, insurer subsidies and so forth. But given that he was just sworn in 20 minutes ago, I think it would be wise to simply watch to see where he starts and what he can do.

The Department of Health & Human Services affects us all, more than most realize, so we are definitely all in this together.
But what do you think?

Until next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf

 

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