Donald Trump’s choice for health secretary, Tom Price, faces his first congressional grilling on Wednesday, hours after leading Democrats called for an investigation of the congressman’s investments.
Price bought and sold health-related stocks while he was an influential voice on healthcare policy in the House of Representatives, advocating for and against bills that affected health companies’ fortunes.
“You made these trades while actively sponsoring, co-sponsoring or voting on dozens of bills that could affect these companies,” wrote Senator Elizabeth Warren, in a letter to Price before his hearing on Wednesday.
“Your perplexing decision to actively trade in health stocks while writing policy that could affect them raises serious questions about potential conflicts of interest and about your judgment.”
Warren and two more senators on the committee also called for Price’s hearing to be delayed until, “questions about his ethical qualifications” were resolved. Another leading Democrat, Senator Chuck Schumer, called for an investigation of his purchase of stock in a medical device company, and said it “cries out for an investigation”.
Wednesday’s hearing will not determine Price’s ultimate eligibility for health secretary; that job is left to the Senate’s finance committee on 24 January. But the first hearing is likely to raise a host of uncomfortable questions for him.
Health stock trades
Price has traded more than $300,000 worth of stock in about 40 health-related companies since 2012, according to an analysis by the Wall Street Journal. Among those were trades in large companies, such as Pfizer, Bristol-Myers Squibb and insurer Aetna.
But his most notable stock purchase was for the little-known Australian company Innate Immunotherapeutics, when in August 2016 he bought between $50,000 and $100,000 worth of stock at a discount from the company.
Innate does not hold any patents on approved drugs, and has only one drug in development: MIS416. The company hopes the drug will treat an advanced form of multiple sclerosis, a progressive nervous system disorder. The treatment is in its second phase of clinical trials, where drugs are tested against a placebo for effectiveness.
A Trump transition spokesman told the Wall Street Journal that Price “complied fully with all applicable laws and ethics rules”.
Other Innate Immunotherapeutics investors also have ties to Trump’s transition team. The company’s largest investor is Republican Chris Collins, who is Trump’s congressional liaison. He worked closely with Price in the past, and has helped shape health legislation. Other investors in the company are Collins’s two adult children, Collins’s chief of staff, Michael Hook, and the former congressman turned lobbyist who represented Collins’s district, Bill Paxon, according to the New York Times.
Price would have bought Innate shares for between 25 and 34 Australian cents (19 to 26 US cents), when he bought between $50,000 and $100,000 worth of stock, according to Innate Immunotherapeutics documents and congressional disclosure forms. Since then, the value of the stock has ballooned to US $1.30.
In a letter to the Securities and Exchange Commission and the Office of Congressional Ethics, advocacy group Public Citizen said that while the available information so far “falls short of evidence that any illegal insider trading or violations of congressional ethics rules have occurred, the patterns, opportunities and remarkable financial benefits gained, and to be gained, warrant investigation”.
The HIP bill
Price also bought stock in a medical device company less than a week before introducing legislation that would have postponed moves that would have cost the company money.
Price sponsored the HIP act in March, about six days after buying up to $15,000 stock in Zimmer Biomet, a leading producer of joint replacement devices, according to his congressional financial disclosure.
Price’s legislation would have delayed Medicare reforms called for in the Affordable Care Act which put pressure on hospitals, and thus suppliers, to reduce the cost of care.
Though Price’s bill died in committee, Zimmer made donations to Price’s political action committee, both before the bill was introduced, in November 2015, and after, in June 2016.
A Price aide told CNN, which first reported the story, that Price’s account was managed by a broker and he was not aware of the transaction.
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