Health nominee reaped big earnings from drug industry tenure

WASHINGTON (AP) - Newly disclosed financial records show that President Donald Trump’s nominee to become Health and Human Services secretary reaped big earnings during his tenure as a top pharmaceutical executive.

As a top drug industry veteran from 2007 to 2017, former Eli Lilly and Co. executive Alex Azar built a substantial financial portfolio now worth $9.5 million to $20.6 million, and he was paid nearly $2 million in his final year at the company.

Azar was a former general counsel and deputy secretary at HHS during President George W. Bush’s administration. If confirmed, he would replace Tom Price, who resigned under pressure after using private charter flights at taxpayer expense.

In remarks Monday before a Cabinet meeting at the White House, Trump said he was “proud” of Azar’s nomination and urged the Senate to “swiftly confirm” him, citing the nominee just before a discussion of the national opioid epidemic.

Azar oversaw Eli Lilly’s lobbying of the federal government during a sensitive two-year period when the pharmaceutical firm was under investigation by the Justice Department for improperly marketing a medication used for schizophrenia.

From 2007 to 2009, when Azar worked as a senior vice president in charge of corporate affairs and communications, Eli Lilly’s lobbying of federal officials and Congress surged. The firm’s payments for internal and outside lobbying rose from $4.2 million in 2007 to $12.4 million in 2008 and $11.2 million in 2009 as President Barack Obama’s administration steered his health care program into law.

In January 2009, the Indianapolis-based Eli Lilly settled with the Justice Department, agreeing to pay $1.4 billion to the government and to several states for improper marketing of Zyprexa, a schizophrenia medication that was marketed for other nonauthorized uses.

During 2007 and 2009, Eli Lilly’s lobbyists at times contacted Justice Department officials as part of their work on behalf of the pharmaceutical firm. Congressional lobbying disclosures do not indicate whether the contacts included any discussions of the then-pending federal investigation.

Azar’s compensation at Lilly during that period was not provided in the 22-page financial disclosure filed Friday with the U.S. Office of Government Ethics. But his final year’s earnings showed how far his drug industry work had catapulted Azar’s financial worth far beyond the $160,000 annual salary he earned as HHS general counsel in the early 2000s.

In addition to the $2 million he earned in 2016, Azar also was given a $1.6 million severance and sold off more than $3.4 million in Eli Lilly stock, noting in his disclosure: “I no longer hold any Eli Lilly & Co. stock.” He also declared between $100,000 and $1 million in capital gains from the sales along with millions more in stock and bond holdings.

HHS spokesman Ryan Murphy said Azar’s private- and public-sector experience make him “uniquely positioned to accomplish the president’s goals on health care policy.” Although the administration has not yet detailed whether Azar will need to recuse himself from decisions concerning Eli Lilly or other health care matters, Murphy noted that “the administration takes seriously the need for appointees to resign, recuse and divest where required.”

Azar served for two years as director of HMS Holdings Corp., a health care processing firm. According to Equilar, an executive data firm, he held $292,000 in equity ownership.

Azar left Eli Lilly in December and started up a private health care consulting firm, Seraphim Strategies, LLC. He listed its value as between $15,000 and $50,000.

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AP investigative researcher Randy Herschaft in New York contributed to this story.