Watchdog Calls for Investigation into HHS Secretary Azar’s Relationship with Former Employer Eli Lilly Following Proposed Rule Change

FOR IMMEDIATE RELEASE: August 28, 2018

Contact: Daniel Stevens, dstevens@campaignforaccountability.org, 202.780.5750

WASHINGTON, D.C. – Today, Campaign for Accountability (CfA), a nonprofit, nonpartisan watchdog group focused on public accountability, called on ethics officials at the Department of Health and Human Services (HHS) to open an investigation into HHS Secretary Alex Azar and his relationship with his former employer, the pharmaceutical manufacturer Eli Lilly and Company. HHS recently proposed a new rule that would greatly benefit Eli Lilly, and Sec. Azar has championed the issue while at the helm of HHS.

Read the complaint here.

CfA Executive Director Daniel E. Stevens said, “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.”

On February 14, 2017, Eli Lilly called on HHS to limit the rebates that drug manufacturers are forced to negotiate with pharmacy benefit managers (PBMs). Drug companies, like Eli Lilly, have long complained that the rebates drive up drug prices and put money into the pockets of PBMs.

On July 18, 2018, HHS essentially acceded to the drug makers’ demands and submitted a proposed rule to OMB that would drastically reduce PBM rebates.  The text of the rule has not been released, but it appears that Eli Lilly would greatly benefit from the new regulation.

Notably, between June 2007 and January 2017, Sec. Azar worked for Eli Lilly, serving most recently as the company’s president. While at Eli Lilly, Sec. Azar championed the pharmaceutical industry’s goal of limiting the ability of PBMs to negotiate rebates.  Since joining the Trump administration, Sec. Azar has continued to criticize PBM rebates.  For instance, he authored the administration’s “blueprint” to reduce prescription drug prices, and the document specifically cited PBM rebates as one of the causes of high prescription drug costs.

Recently, members of Congress have questioned Sec. Azar’s motivation for supporting the new rule.  On August 17, 2018, Sen. Elizabeth Warren (D-MA) and Sen. Tina Smith (D-MN) sent a letter to Sec. Azar seeking to answer whether he had worked with Eli Lilly to limit PBM rebates.  Additionally, on August 9, 2018, Sen. Orrin Hatch (R-UT) and Rep. Greg Walden (R-OR) sent a letter to OMB Director Mick Mulvaney expressing concern about the effect the rule would have on consumers.

After joining the Trump administration, Sec. Azar signed President Trump’s ethics pledge, which prohibits presidential appointees from working with their former employers on government business for a period of two years.  If Sec. Azar contacted Eli Lilly or worked with the company’s representatives to curb PBM rebates, he may have violated Executive Order 13770: Ethics Commitments by Executive Branch Employees, issued by President Trump on January 28, 2017. The order directs each agency’s designated ethics official to administer an ethics pledge and directs the attorney general to investigate any alleged violations of the pledge.

Stevens continued, “It’s not that difficult: public officials should be working for Americans’, not drug companies’, interests.  HHS officials should investigate whether Sec. Azar has violated ethics rules by engaging with Eli Lilly while pushing one of its key issues.”

UPDATE: On August 30, 2018, CfA filed a Freedom of Information Act (FOIA) request with HHS seeking communications between Sec. Azar, and any representative or lobbyist for Eli Lilly and Company.

Campaign for Accountability is nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.