Trump's choice for HHS secretary made millions off pharma Presented by

AZAR MADE MILLIONS OFF PHARMA — HHS secretary nominee Alex Azar made nearly $2 million in his last year atop drug giant Eli Lilly’s U.S. arm before leaving in January. But since his departure, he’s continued to rake in the industry money, POLITICO's Adam Cancryn reports.

— Looking at his lucrative ties to pharma: Azar pocketed a $1.6 million severance, and recognized as much as $1 million from his subsequent sale of Eli Lilly stock. He also received more than $700,000 in assorted payouts from the company – everything from the distribution from his “excess savings plan” to compensation for unused vacation time.

And since cutting ties with Lilly, Azar has leaned on his pharma experience to find work. President Donald Trump’s pick to run HHS made $46,500 in speaking fees for clients including the National Association of Specialty Pharmacy. And a consulting firm he set up quickly found a couple clients: The National Pharmaceutical Council and drug company UCB Inc. On top of that, Azar served on the board of health care firm HMS Holdings and retains thousands in stock options and restricted stock.

That pharma-based income represents a substantial slice of Azar’s overall fortune, which ranges between $9.5 million and more than $20 million.

— What comes next: Azar is disentangling himself from the corporate world ahead of his Senate confirmation hearings, selling off his entire stake in Eli Lilly and resigning from HMS’ board. In an ethics disclosure, Azar also pledged to recuse himself for a year from matters related to the companies.

That’s not likely to deter progressives already skeptical that Azar will be too friendly to the powerful pharmaceutical lobby. Sen. Bernie Sanders has already come out in opposition to Azar’s nomination, and plenty of Democrats are expected to have sharp questions when Azar faces the HELP Committee on Nov. 29.

— Some perspective: Although Azar has accumulated a comfortable fortune, he’d still rank as one of the poorer members of a Trump cabinet that includes Betsy DeVos, Wilbur Ross and Steven Mnuchin — all of whom are estimated to have fortunes in the hundreds of millions.

In fact, his closest competitor may well be his predecessor, Tom Price, whose wealth the New York Times pegged in April at somewhere between $8 million and $22.1 million.

Keep reading: More for Pros.

Alex Azar, tapped to be HHS secretary, has profited through his work on behalf of pharma. | Evan Vucci/AP Photo

SURVIVING CO-OPS ON STRONGER FINANCIAL FOOTING — Three of the four remaining co-op insurance plans seeded with Obamacare loan dollars operated in the black for the first nine months of this year, according to third quarter financial filings reviewed by POLITICO's Paul Demko.

— Montana Health Cooperative had the healthiest balance sheet, with net income of $18.6 million at the end of September. By comparison, it had lost $13.5 million at the same point last year.

— Wisconsin’s Common Ground Healthcare Cooperative saw an equally stark improvement in its bottom line. The nonprofit insurer had net income of $4.5 million through the first three quarters of this year, compared to $25.7 million in losses last year.

— Maine Community Health Options also ran a surplus through September, with revenues exceeding costs by $6.5 million. Last year at this point it was $3.3 million in the red.

The only co-op not to show a profit through the first three quarters of this year: New Mexico Health Connections. It lost $10.4 million through September, slightly better than the $12.6 million in losses it had accrued at the comparable point in 2016.

COMMUNITY PHARMACISTS PUSH BACK AGAINST PBMs ON PART D RULE — The National Community Pharmacists Association applauded CMS’s proposal to let patients access drugs at whichever pharmacy they prefer, a long-standing ask of the organization, POLITICO's Sarah Karlin-Smith reports.

While PBMs have warned that the agency's proposal would put preferred pharmacy plans at risk, the pharmacists' association says that's not true. Instead, NCPA is arguing that the proposal would allow community pharmacies to more fully participate in standard Part D plans. Currently, pharmacy benefit managers use "arbitrary" reasons to "effectively limit completion and steer patients to PBM-affiliated pharmacies," NCPA claims.

NCPA also added that while their former lobbyist John Coster is a pharmacy director at CMS, he does not have jurisdiction over Medicare.

PROGRAMMING NOTE: PULSE won't publish from Nov. 23-Nov. 26, but we'll return on Nov. 27.

THIS IS TUESDAY PULSE — Where it's almost time to talk turkey, but until then, we're still game to keep haggling over health care news. Tips to [email protected] or @ddiamond on Twitter, per usual.

With help from Paul Demko (@PaulDemko), Sarah Karlin-Smith (@SarahKarlin), Adam Cancryn (@AdamCancryn) and Luis Sanchez (@_luissanchez1).

A message from PhRMA: Today, there are several promising vaccine candidates in stage three clinical trials. These trials have tens of thousands of participants, from every walk of life. From development to robust clinical trials, and throughout manufacturing, these vaccine candidates follow the same rigorous process of other vaccines that have saved millions of lives. More.





Massachusetts requires health plans to cover birth control. Gov. Charlie Baker on Monday signed a bill requiring insurance plans provide birth control coverage without a co-pay, the first state law of its kind in the country.

The law is designed to ensure consumers have birth control coverage in line with the Affordable Care Act’s requirement as the Trump administration has unwound the contraception mandate.

… “Massachusetts leads the country in health care with nearly universal coverage, and signing this important, bipartisan bill into law ensures critical access to contraceptive coverage for women across the Commonwealth,” Baker, a Republican, said in a statement.

The law goes further than Obamacare to require consumers have the option of getting a 12-month supply of contraception at one time. It also prohibits cost-sharing for over-the-counter emergency contraception without a prescription.





Under Trump, pharma faces rough road on trade. That's according to POLITICO's Mike Grunwald, who looks at what's happened after the collapse of the Trans-Pacific Partnership and why the drug industry has been so insistent on 12 years of exclusivity for biologics in trade deals. More.

How existing databases could help unlock new approvals for drugs. Real-world data analysis of patients provided similar results to a randomized clinical trial, according to a JAMA Internal Medicine study, suggesting the potential of using existing data to bolster the drug approval process.

In a study, researchers used nonrandomized, existing data to mirror a randomized clinical trial that had established the supplemental indication of the high blood pressure drug telmisartan. The results strengthen the idea that database studies can provide supplemental evidence when establishing indications for already approved drugs.

The recently passed 21st Century Cures Act empowered FDA to explore approvals for supplemental drug indications using real-world data rather than clinical trials, a move criticized for possibly making it too easy for additional treatments to be approved without comprehensive data.

“There is no substitute for randomization when we need to be confident that a difference in an outcome is caused by a difference in therapy,” former FDA Commissioner Robert Califf wrote in an accompanying op-ed. But Califf said that observational analyses can supplement randomized clinical trials for new indications and providing real-world knowledge.

Tobacco companies to run high-profile ads about dangers of smoking, their business practices. After years of legal battles, a federal judge ordered that the major tobacco companies must run ads on TV and in newspapers that detail the consequences of using cigarettes and the companies' decision to make the products more addictive.

The TV ads will run five times per week for one year, mostly on ABC, CBS and NBC in primetime but also on other heavily viewed networks or during popular programs. The newspaper ads will appear in the Sunday edition of 50-plus newspapers, including the Washington Post and the New York Times, beginning this coming week.

The tobacco companies spent 11 years appealing the court's order to run "corrective statements," which stemmed from a 1999 lawsuit filed by the Justice Department.

See the text of the corrective statements | See details on where they'll run





Dermatologists are more aggressively performing biopsies and recommending radiation, but many procedures may be unnecessary, Katie Hafner and Griffin Palmer write in the New York Times. More.

Some U.S. hospitals are prioritizing liver transplants for foreign nationals, ProPublica's Charles Ornstein and Lee Zurik of Fox 8 WVUE New Orleans report. More.

VA Secretary David Shulkin told the WSJ that he wants private-sector providers to play a bigger role in veterans' care, a plan likely to spark resistance from Democrats and veterans' groups. More.

Writing at the Health Affairs blog, Georgetown's Gregg Bloche and David Hyman call for a health care "grand bargain" that includes striking down the ACA individual mandate but funding more generous subsidies. More.

Mayo Clinic's operating income more than doubled in the third quarter, even as it pulled back from rural communities, Healthcare Dive's Les Masterson reports. More.

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