Watchdog group takes aim at HHS' new PBM rebate rule, asks ethics officers to evaluate Azar's conflicts of interest

House Committee on Education and the Workforce
HHS Secretary Alex Azar's relationship with former employer Eli Lilly has been a frequent point of concern for his critics. (CSPAN)

HHS Secretary Alex Azar has once again come under fire regarding his relationship with former employer Eli Lilly, this time from the watchdog group Campaign for Accountability (CfA).

The group specifically took issue with the way HHS' new proposed rule would reduce pharmacy benefit manager (PBM) rebates—a change drug companies like Eli Lilly have long sought after. CfA suggested that ethics officers at HHS look into whether Azar's relationship with his former employer could be affecting his decisions.

“Sec. Azar appears to be using his position to implement a top policy goal for his former employer. The only question is whether Sec. Azar has been working in tandem with his old coworkers to push the company’s agenda. HHS must investigate Sec. Azar’s conduct to determine whether he is working to change government regulations to benefit consumers or to benefit the company where he worked for a decade,” CfA Director Daniel E. Stevens said in a statement.

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This isn't the first time Azar's relationship with Eli Lilly has raised questions. In a letter to Azar earlier this month, Senators Elizabeth Warren, D-Mass., and Tina Smith, D-Minn., took aim at allegations the secretary made about PBMs' role in raising drug prices. The senators suggested Azar could have a conflict of interest stemming from his time with the company.

"If you have coordinated with the pharmaceutical industry to concoct a scenario in which the drug company failure to reduce prices is blamed on industry middleman rather than attributed to the drug companies themselves, it would raise very serious questions about your commitment to enhancing and protecting the health and wellbeing of all Americans,” the senators wrote (PDF).

RELATED: Senators confront Azar on drug pricing comments after PBMs refute his testimony

It's not surprising that critics would target Azar's history with Eli Lilly. The line on his CV is an easy target, one that Democrats have pointed to as far back as Azar's confirmation hearing.

HHS said it wouldn't comment in matters where an investigation has been requested, but asserted that the secretary has been forthright and independent regarding his relationship with his former employer.

“Secretary Azar fully disclosed his former employment with Eli Lilly to the Senate, the U.S. Office of Government Ethics, and the HHS Ethics Office prior to his appointment at HHS. He has been completely transparent and agreed to recuse as required by the Ethics Pledge. Under the guidance of the HHS Ethics Office he has instituted a robust screening arrangement to help ensure that, as required by the Ethics Pledge, he does not participate in any particular matters where his former employer is a party to the matter, or a party representative,” Caitlin Oakley, a spokesperson for HHS, told FierceHealthcare in an email.

Still, when it comes to PBM rebates, Azar has enabled his critics by staking out a that is at odds with other stakeholders in the health system. Eliminating the rebates has become a priority item in the administration's efforts to tackle rising drug prices although policy experts have long pointed to list prices as the driving force behind drug costs.

RELATED: AHIP: Rebates not driving rise in drug pricing

“If you're talking about rebates as a solution, or doing something to rebates as a solution for the drug pricing problem, you're really only focusing on a small section. It's really, at the end of the day, more of a distraction from some of the solutions that might actually work,” said Daniel Nam, executive director of federal programs for AHIP, in a previous interview with FierceHealthcare.

As a consequence, it's easy for watchdogs to be skeptical that Azar's hostility toward rebates is really motivated by the best interests of patients.

“The intensity of both Sec. Azar’s and Eli Lilly’s support for the proposed safe harbor provision calls into question Sec. Azar’s motivation for seeking to implement the proposed rule," CfA concluded in its official complaint (PDF). "While Sec. Azar claims the rule is in the best interests of consumers, the public deserves to know whether he is actually supporting the rule to benefit his former employer."

This article was updated to include comments from HHS.

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