HHS Deputy Secretary Eric Hargan joined me this morning:
HH: Pleased to welcome back the Deputy Secretary of the Health and Human Services Department, Eric Hargan. Eric, welcome back, good to have you again.
EH: Good to be back, Hugh.
HH: Let’s begin with the children at the border. It is almost a daily occurrence that we get updates on the efforts to reunify all children with their parents when we can find them, and additional stories. You have the overview. You’ve got the lead on this. How do you think the government is doing in the reunification effort?
EH: Well, last week, we had reunified all of the eligible parents who were in ICE custody with children that we had in our care at HHS. So we, you know, fortunately were able to comply with the sort of first phase of the court’s order, which was to reunify the parents in ICE custody and the children who were in HHS care. And that was achieved. And so we are, I’m sure, we’re going to go onto other phases of what we are going to be doing in terms of reunifying the children and the parents.
HH: Now there were reports that some parents had been deported, but their children remained in the country. How widespread is that actual set of circumstances?
EH: Well, there are some parents who return to their country of origin, and you know, we are going to be working with those countries and with people on the ground to make sure that those parents stay in, sort of stay together. We do have a court filing coming up later this week, so we kind of don’t want to get in front of that in terms of talking about the plans that we’re going to be submitting to the court about exactly how we’re going to accomplish what we’re required to do under that, and in terms of the next phases of reunification.
HH: Now Deputy Secretary Hargan, on Monday, a federal judge, Dolly Gee in Los Angeles ordered HHS to stop giving psychotropic drugs to migrant children at a place called the Shiloh Residential Treatment Center. Indeed, it ordered all children out of there who are not deemed by a licensed professional to pose a risk of harm to others and themselves. Did this take you by surprise? I mean, what is this facility?
EH: Well, anytime that, you know, anytime in these facilities where they administer any kind of pharmaceuticals to a child in one of these facilities, they are supposed to comply with any kind of state licensure requirements in terms of administering any pharmaceuticals to children who are in care. And so we will definitely be, we have oversight responsibilities over these facilities, and so we will definitely be, you know, we have requirements on us to make sure we take a look at these things. Again, we have pending litigation, so I don’t want to kind of get an advance of where that’s going in terms of the case.
HH: Okay, last question then. There’s this archipelago of HHS facilities. Are you confident, Eric Hargan, that we are delivering a standard of care to children who may have crossed the border without permission, who may have come from non-ports of entry, they have complicated legal situations, but they are in the custody of the United States. That means they’re in your custody, my custody, the custody of the American people. Do you think you’ve got a handle on these facilities?
EH: Well, as you say, there is an archipelago of these. There are many facilities. And we have seen across here that we have grantees that show a lot of care for the safety and health of these children that are placed into their care. And we have that as part of our mission as well at HHS, is to make sure that these children are cared for as long as they’re in our custody and care. Any time that there is an allegation of problems of abuse, that’s something that we take very seriously, and we have to respond to that. As you know, there are thousands of these children that are in a variety of these, of different places. And, but any time that we get an allegation, we hop right on it.
HH: Well, okay, I lied. Last question is this one. Allegations do trigger response, but do you proactively send out teams to do sort of the secret shopper approach…
HH: …where Eric Hargan’s specially designated deputy is just doing drop-ins to make sure that these facilities are working?
EH: Yeah, we definitely conduct, you know, surveys of them, and make sure that we do so. In fact, some of us have done so where we drop in on facilities to take a look at them and make sure that they’re up to snuff.
HH: That’s the best, that’s the best medicine is if they don’t know when you’re coming, they have to be ready every day. Now let’s talk about drugs for Americans, because this has not been much covered. The Trump administration has gone after Big Pharma in a way that perhaps surprised a lot of people What exactly is that program?
EH: Well, the drug pricing reform that we’re working on is a set of literally over 50 different reforms that were announced earlier this year that we’re going to be working on to bring drug pricing down. And that, again, we’re trying to put in market-based series of reforms that really focus on enabling more competition in the drug space and making sure that we have more transparency in pricing within the market, because you know, a market is based on meeting transparent prices so people know what they’re buying and the prices of the goods, and also that we have more competitors in the space. And you know, many of the times, we had had a set of rules that say the government had put in place that over time there had been subject to, I think as our FDA commissioner calls, shenanigans, but sort of gamesmanship on our own rules. In many cases, that’s on us to make sure that we enact conservative reform to make sure that we’re sensitive to the marketplace, but also make sure that our own rules are not being used by people in the market for a purpose they weren’t intended to achieve so that we make sure that we enable the best possible marketplace so that it reflects the actual, make sure it reflects people’s actual desires for the goods that the pharmaceutical industry is giving us.
HH: You know, consumers are pretty good at this. And when Amazon picked up Pill Pack, I had Secretary Azar on, and he said you know, Amazon tends to disrupt every marketplace they enter.
HH: And so I’m very happy to see them buy Pill Pack. Is that the remedy that we need, just more and better price transparency for shoppers who can use the web to go and get their drugs for the least amount of cost?
EH: Well, I mean, it’s going to, given where we are, it’s going to require a multi-prong approach to this. I mean, ultimately, you have to have those prices be available to people, and ultimately the consumer making the decision about what they’re going to buy or not buy in conjunction with their physician or their other care provider. But you know, the best that we can do is to make sure that the parts that we are doing, that they run smoothly and that we enable the marketplace to get as close as it can. And in many cases, we had taken actions and past administrations had taken actions that made that more difficult. It made the system opaque in terms of pricing, and it created incentives for players in the market to kind of game the system. And that’s what we’re going to be trying to deliver in our reform.
HH: How do they do that, Eric? I’m genuinely curious. How do they game the system?
EH: Well, so we enable various rebates or discounts in our, in the market. And so what happens is that for example, at a base, the manufacture sets a list price which may be high. It’s more or less an opening price for negotiations amongst the manufacturers and other players – plans, pharmaceutical benefit managers and others in a space who then negotiate the prices based on a series of rebates that we ourselves enabled. Now that system enables a bunch of sort of negotiations back and forth, none of which are really being handled by patients or their care providers. And the end of…
HH: Boy, that sounds like the car business.
HH: That sounds like you know, sticker price for the drug, and you don’t want to pay sticker, but you don’t know where you can go get the Carfax price.
EH: Exactly, but at the end of it, the patient often pays a copay based on the original price that was set as an opening gambit in a negotiation. So sometimes, they end up paying a percentage of that as a copay. So in some sense, they are affected by this process. They are affected by that list price in the same way that a hospital that creates a set of charges that are again used as an opening gambit in negotiations, sometimes people end up paying that full price or a percentage of that full price. But they never had any insight into how that original price was developed, nor did they have any influence over it. And so that’s the system that we have, that you know, to the extent that we can enact reforms that bring that closer, that system closer to reality and to market reality, I think we’ll have achieved some real good long term goals.
HH: Have you ever read Clayton Christianson’s book on the health care disruption revolution? He’s the best. I mean, he’s a Harvard Business School disruption expert. Have you ever taken the time to get that one done, Eric?
EH: You know, I have not actually read his book.
HH: I strongly recommend it to everyone.
HH: He is, he just actually just focuses on how to disintermediate these price structures which are, as you just described, they’re actually screwing the consumer. Eric Hargan, good to have you back, deputy HHS secretary. Good to get the good news on monitoring the kids at the border and on drug pricing transparency. Always good to have a little policy in the morning on the Hugh Hewitt Show.
End of interview.