CABINET HEARINGS: Xavier Becerra, Nominee for Secretary of the Department of Health and Human Services

Xavier Becerra’s nomination to lead the Department of Health and Human Services (HHS) was considered by two Senate committees this week: Health, Education, Labor and Pensions, and Finance. While both committees held hearings on the nominee, only the Senate Finance Committee will vote on Becerra’s nomination. Becerra is currently the California Attorney General and previously served in the U.S. House of Representatives for 24 years. 

PRIMARY ISSUES RAISED

  • Drug pricing: Several senators asked Becerra about his approach to addressing drug costs. In each case, Becerra responded in broad terms, and was deferential to the role of Congress.
    • Senator Charles Grassley (R-IA), the previous Chair of the Senate Finance Committee, offered his support for Congressional action on drug pricing, noting the bipartisan proposal he developed with Ron Wyden (D-OR) in the last Congress, and contrasting that effort with partisan policies put forward by Democrats that are unlikely to garner Republican support.  
    • Senator Maria Cantwell (D-WA) expressed concern about price spikes of certain drugs, specifically referencing insulin. 
    • Senator Sherrod Brown (D-OH) discussed the need for action in broad terms. 
    • Senator Bill Cassidy (R-LA) expressed concern that the list price of drugs – on which beneficiary copays are based – continues to grow. In his answer, Becerra acknowledged the conflict between manufacturers and PBM, and the role of the rebate rule, without taking sides on the issue. 
    • Senator Pat Toomey (R-PA) pressured Becerra on his previous support for so-called “march in rights,” that would allow the federal government to seize the intellectual property behind a drug. 
  • 340B: Senator Bill Cassidy (R-LA) raised concerns with the growth of the 340B program and asked Becerra whether a statutory definition was needed for the term “contract pharmacies” and “patients.” Senator John Thune (R-SD), the Minority Whip, asked Becerra to ensure that hospitals and other entities participating in the 340B program are providing a community benefit, which Becerra said he would.  
  • Pharmacy Benefit Managers/Rebates: Senators Tommy Tuberville (R-AL) and Roger Marshall (R-KS) expressed concern with the role of pharmacy benefit managers (PBMs). Senator Tuberville was specifically concerned with the impact of PBMs on rural pharmacies, and Senator Marshall expressed concern with market consolidation in the PBM industry. Senator Cassidy asked if rebates on insulin products should be provided to the consumer. Becerra indicated he would be happy to look at the issue. Becerra stated that PBMs “have a role,” and indicated that he would be willing to work with both Senators moving forward.
  • Medicare Advantage: Multiple senators asked Becerra about his opinion of the Medicare Advantage program. Finance Ranking Member Mike Crapo (R-ID) praised the program, while Senator Brown expressed concern that Medicare Advantage payment rates were too high, and that Medicare beneficiaries in fee-for-service were not eligible for the supplemental benefits offered under Medicare Advantage. Becerra provided little specificity in his response.
  • Provider Funding: Senator Susan Collins (R-ME) raised concerns with the financial health of nursing homes and other providers and expressed disappointment the COVID-19 relief package moving through the House does not include additional funding for the Provider Relief Fund. 
  • Becerra’s Experience: While HELP Chair Patty Murray (D-WA) touted Becerra’s experience, Ranking Member Richard Burr (R-NC) raised questions as to whether Becerra is prepared to run HHS. He voiced concerns that being a Member of Congress on a committee with jurisdiction over health care does not mean one is qualified to run a department, and that all previous HHS secretaries have had extensive experience with health care issues and government administration. 
  • Transparency: Senator Mike Braun (R-IN) asked if Becerra would support transparency in health care, specifically calling out the American Hospital Association, the American Medical Association, and other groups that have supported Becerra’s nomination. Becerra responded that “the American people are entitled to know what they are buying,” and that “we will do robust enforcement to ensure that price transparency is there for all Americans when they walk into a hospital.” Becerra also referenced transparency when responding to a question from Senator Chris Murphy (D-CT) about how best to lower prices in the health care sector, arguing consumers can push prices down with greater visibility not price.
  • Lowering Medicare Eligibility: Senator Mitt Romney (R-UT) asked Becerra to justify President Biden’s proposal to lower the Medicare eligibility age given the Hospital Trust Fund is already in a difficult financial position. Becerra indicated that Biden’s proposal would not rely on the Hospital Trust Fund and would perhaps use support from the general fund. 
  • Mental Health: Numerous Democratic Senators raised concerns about mental health, ranging from parity in coverage for services, to infrastructure and resources. Becerra repeatedly acknowledged the challenges and committed to working with the Senate on the issue. 
  • Religious Freedom and Abortion Rights: Several Republican senators pressured Becerra on how he would approach religious liberty and recognize differing views on abortion. Becerra repeatedly iterated his responsibility as HHS Secretary would be to follow current law.  
  • Telehealth: Senators Thune and Ben Cardin (D-MD) asked Becerra about his perspective on telehealth. Becerra referenced the key role telehealth has played in the COVID-19 pandemic and stated he does not see a “return to the old days.” 

TAKEAWAY

Republicans came into the hearings with a goal of convincing at least one Democrat to oppose the nomination, focusing on Becerra’s lack of experience and his legal work in support of abortion rights as California Attorney General. 

To this point, those efforts have fallen short. No Democrats in either Committee showed any hesitation in supporting Becerra, and the key moderates in the Chamber – Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) – have not spoken out against him either. 

In addition, some moderate Republicans struck a cordial tone in the hearings, leaving open the possibility of at least one defector. Senators Collins and Lisa Murkowski (R-AK) used their question time to ask tempered, substantive policy questions.  

We aren’t holding our breath the vote will be bipartisan, but it does appear Becerra’s nomination is in good shape. 

One other interesting takeaway – Senator Grassley appears none too pleased that Minority Leader McConnell did not offer to move the drug pricing package he constructed with Senator Wyden in the last Congress. Grassley’s push for the Biden administration to consider a bipartisan package yields hope for a package passing under regular order with support from both sides – IF Democrats are willing to forego Medicare price negotiation.  

WHAT’S NEXT?

The Senate Finance Committee will vote on the nomination, perhaps as soon as next week. At this point we expect his nomination to be approved along a party line vote.