Alex Azar: Can There Be Uglier Scenarios than the Revolving Door?

By Lambert Strether

Clearly, Alex Azar, nominated yesterday for the position of Secretary of Health and Human Services by the Trump Administration, exemplifies the case of the “revolving door,” through which Flexians slither on their way to (or from) positions of public trust. Roy Poses (cross-posted at NC) wrote, when Azar was only Acting Secretary:

Last week we noted that Mr Trump famously promised to “drain the swamp” in Washington. Last week, despite his previous pledges to not appoint lobbyists to powerful positions, he appointed a lobbyist to be acting DHHS Secretary. This week he is apparently strongly considering Mr Alex Azar, a pharmaceutical executive to be permanent DHHS Secretary, even though the FDA, part of DHHS, has direct regulatory authority over the pharmaceutical industry, and many other DHHS policies strongly affect the pharmaceutical industry. (By the way, Mr Azar was also in charge of one lobbying effort.)

So should Mr Azar be confirmed as Secretary of DHHS, the fox guarding the hen house appears to be a reasonable analogy.

Moreover, several serious legal cases involving bad behavior by his company, and multiple other instances of apparently unethical behavior occurred on Mr Azar’s watch at Eli Lilly. So the fox might be not the most reputable member of the species.

So you know the drill…. The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption. As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door from industry to the Trump administration once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism.

Poses is, of course, correct. (Personally, I’ve contained my aghastitude on Azar, because I remember quite well how Liz Fowler transitioned from Wellpoint to being Max Baucus’s chief of staff when ObamaCare was being drafted to a job in Big Pharma, and I remember quite well the deal with Big Pharma Obama cut, which eliminated the public option, not that the public option was anything other than a decreasingly gaudy “progressive” bauble in the first place.) In this post, I’d like to add two additional factors to our consideration of Azar. The first: Democrat credentialism makes it hard for them to oppose Azar. The second: The real damage Azar could do is on the regulatory side.[1]

First, Democrat credentialism. Here is one effusive encomium on Azar. From USA Today, “Who is Alex Azar? Former drugmaker CEO and HHS official nominated to head agency”:

“I am glad to hear that you have worked hard, and brought fair-minded legal analysis to the department,” Democratic Sen. Max Baucus said at Azar’s last confirmation hearing.

And:

Andy Slavitt, who ran the Affordable Care Act and the Centers for Medicare & Medicaid Services during the Obama administration, said he has reason to hope Azar would be a good secretary.

“He is familiar with the high quality of the HHS staff, has real-world experience enough to be pragmatic, and will hopefully avoid repeating the mistakes of his predecessor,” Slavitt said.

So, if Democrats are saying Azar is “fair-minded” and “pragmatic” — and heaven forfend that the word “corruption”[2] even be mentioned — how do they oppose him, even he’s viscerally opposed to everything Democrats supposedly stand for? (Democrats do this with judicial nominations, too.) Azar may be a fox, alright, but the chickens he’s supposedly guarding are all clucking about how impeccable his qualifications are!

Second, let’s briefly look at Azar’s bio. Let me excerpt salient detail from USA Today:

1. Azar clerked for Supreme Court Justice Antonin Scalia.

2. Azar went to work for his mentor, Ken Starr, who was heading the independent counsel investigation into Bill and Hillary Clinton’s Whitewater land deal.

3. Azar had a significant role in another major political controversy when the outcome of the 2000 presidential election hinged on a recount in Florida. Azar was on the Bush team of lawyers whose side ultimately prevailed…[3]

For any Democrat with a memory, that bio provokes one of those “You shall know them by the trail of the dead” moments. And then there’s this:

When Leavitt replaced Thompson in 2005 and Azar became his deputy, Leavitt delegated a lot of the rule-making process to Azar.

So, a liberal Democrat might classify Azar as a smooth-talking reactionary thug with a terrible record and the most vile mentors imaginable, and on top of it all, he’s an effective bureaucratic fixer. What could the Trump Administration possibly see in such a person? Former (Republican) HHS Secretary Mike Leavitt explains:

“Understanding the administrative rule process in the circumstance we’re in today could be extraordinarily important because a lot of the change in the health care system, given the fact that they’ve not succeeded legislatively, could come administratively.”

We outlined the administration strategy on health care in “Trump Adminstration Doubles Down on Efforts to Crapify the Entire Health Care System (Unless You’re Rich, of Course)”. There are three prongs:

1) Administratively, send ObamaCare into a death spiral by sabotaging it

2) Legislatively, gut Medicaid as part of the “tax refom” package in Congress

3) Through executive order, eliminate “essential health benefits” through “association health plans”

As a sidebar, it’s interesting to see that although this do-list is strategically and ideologically coherent — basically, your ability to access health care will be directly dependent on your ability to pay — it’s institutionally incoherent, a bizarre contraption screwed together out of legislation, regulations, and an Executive order. Of course, this incoherence mirrors to Rube Goldberg structure of ObamaCare itself, itself a bizarre contraption, especially when compared to the simple, rugged, and proven single payer system. (Everything Obama did with regulations and executive orders, Trump can undo, with new regulations and new executive orders. We might compare ObamaCare to a child born with no immune system, that could only have survived within the liberal bubble within which it was created; in the real world, it’s not surprising that it’s succumbing to opportunistic infections.[2])

On #1, The administration has, despite its best efforts, not achieved a controlled flight into terrain with ObamaCare; enrollment is up. On #2, the administration and its Congressional allies are still dickering with tax reform. And on #3…. That looks looks like a job for Alex Azar, since both essential health benefits and association health plans are significantly affected by regulation.

So, yes, there are worse scenarios than the revolving door; it’s what you leave behind you as the door revolves that matters. It would be lovely if there were a good old-fashioned confirmation battle over Azar, but, as I’ve pointed out, the Democrats have tied their own hands. Ideally, the Democrats would junk the Rube Goldberg device that is ObamaCare, rendering all of Azar’s regulatory expertise null and void, but that doesn’t seem likely, given that they seem to be doing everything possible to avoid serious discussion of policy in 2018 and 2020.

NOTES

[1] I’m leaving aside what will no doubt be the 2018 or even 2020 issue of drug prices, since for me that’s subsumed under the issue of single payer. If we look only at Azar’s history in business, real price decreases seem unlikely. Business Insider:

Over the 10-year period when Azar was at Lilly, the price of insulin notched a three-fold increase. It wasn’t just Lilly’s insulin product, called Humalog. The price of a rival made by Novo Nordisk has also climbed, with the two rising in such lockstep that you can barely see both trend lines below.

The gains came despite the fact that the insulin, which as a medication has an almost-century-long history, hasn’t really changed since it was first approved.

Nice business to be in, eh? Here’s that chart:

It’s almost like Lilly (Azar’s firm) and Novo Nordisk are working together, isn’t it?

[2] Anyhow, as of the 2016 Clinton campaign, the Democrat standard — not that of Poses, nor mine — is that if there’s no quid pro quo, there’s no corruption.

[3] And, curiously, “[HHS head Tommy] Thompson said HHS was in the eye of the storm after the 2001 terrorist attacks, and Azar had an important role in responding to the resulting public health challenges, as well as the subsequent anthrax attacks…”

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

11 comments

  1. MedicalQuack

    Oh please, stop quoting Andy Slavitt, the United Healthcare Ingenix algo man. That guy is the biggest crook that made his money early on with RX discounts with his company that he and Senator Warren’s daughter, Amelia sold to United Healthcare. He’s out there trying to do his own reputation restore routine. Go back to 2009 and read about the short paying of MDs by Ingenix, which is now Optum Insights, he was the CEO and remember it was just around 3 years ago or so he sat there quarterly with United CEO Hemsley at those quarterly meetings. Look him up, wants 40k to speak and he puts the perception out there he does this for free, not so.

    1. diptherio

      I think you’re missing the context. Lambert is quoting him by way of showing that the sleazy establishment types are just fine with him. Thanks for the extra background on that particular swamp-dweller, though.

      1. a different chris

        Not just the context, it’s a quote in a quote. Does make me think Slavitt must be a real piece of work to send MQ so far off his rails…

  2. petal

    Alex Azar is a Dartmouth grad (Gov’t & Economics ’88) just like Jeff Immelt (Applied Math & Economics ’78). So much damage to society from such a small department!

    1. sgt_doom

      Nice one, petal!!!

      Really, all I need to know about the Trumpster Administration:

      From Rothschild to . . . .

      https://en.wikipedia.org/wiki/Wilbur_Ross

      Since 2014, Ross has been the vice-chairman of the board of Bank of Cyprus PCL, the largest bank in Cyprus.

      He served under U.S. President Bill Clinton on the board of the U.S.-Russia Investment Fund. Later, under New York City Mayor Rudy Giuliani, Ross served as the Mayor’s privatization advisor.

    2. Jen

      Or from a “small liberal arts college” (which is a university in all but name, because alumni).

      Tim Geitner (’82 – Goverment)
      Hank Paulson (’68 – English)

  3. Alfred

    I don’t believe that the President’s “swamp” ever consisted of crooked officials, lobbyists, and cronies I think it has always consisted of those regulators who tried sincerely to defend public interests. It was in the sticky work of those good bureaucrats that the projects of capitalists and speculators bogged down. It is against their efforts that the pickup-driving cohort of Trumpism (with their Gadsden flag decals) relentlessly rails. Trump has made much progress in draining the regulatory swamp (if indeed that is the right way to identify it), and no doubt will make considerably more as time wears on, leaving America high and dry. The kind of prevaricator Trump is may simply be the one who fails to define his terms.

  4. Henry Moon Pie

    I think we’ve moved past the revolving door. We hear members of the United States Senate publicly voice their concerns about what will happen if they fail to do their employers’ bidding (and I’m not talking about “the public” here). In the bureaucracy, political appointees keep accruing more and more power even as they make it clearer and clearer that they work for “the donors” and not the people. Nowhere is this more true than the locus through which passes most of the money: the Pentagon. The fact that these beribboned heroes are, in fact, setting war policy on their own makes the knowledge that they serve Raytheon and Exxon rather than Americans very, very troubling.

    I suspect Azar’s perception is that he is just moving from one post to another within the same company.

  5. Larry

    Big pharma indeed has so much defense from the supposed left. It combines their faith in technological progress, elite institutions, and tugs on the heart strings with technology that can save people from a fate of ill health or premature death. Of course, the aspect of the laws being written to line the pockets of corrupt executives is glossed over. While drug prices and medical costs spiral ever higher, our overall longevity and national health in the US declines. That speaks volumes about what Democrats really care about.

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