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 Representative Tom Price told the Senate Committee on Health,
Education, Labor and Pensions, one of two that oversee the health
department, that there was no connection between his purchase of
certain health company stocks and his promotion of legislation that
would have helped the companies. He said the stocks were bought on
his behalf by a broker.
"I had no knowledge of those purchases," he said.
Price owns a variety of healthcare stocks, including biotech firm
Amgen Inc, pharma companies Bristol-Myers Squibb Co, Eli Lilly & Co
and drug distributor McKesson Corp. He has said he will divest
health and other stocks that could be affected by his position as
health secretary.
Price, an orthopedic surgeon, said he did personally direct his
broker to buy shares of Australian biotech company Innate
Immunotherapeutics Ltd. He said he was made aware of the stock by
Republican Congressman Chris Collins, who serves on
Immunotherapeutics' board, but denied he had been given any inside
information or broken any laws. He said he did his own due diligence
on the company.
A spokesman for Collins, Michael McAdams, said in a statement that
Collins' relationship with Immunotherapeutics goes back more than 15
years, during which he has spoken with hundreds of people, including
Price.
"Congressman Collins has never disclosed any nonpublic or improper
information related to Innate Immunotherapeutics and has followed
all ethical and legal standards required by the House of
Representatives during his time in office."
Senator Patty Murray, the top Democrat on the panel, said the
purchase raised questions that need a full investigation before the
Senate goes forward with his confirmation.
Stephen Crimmins, an attorney with Murphy and McGonigle and former
lawyer with the U.S. Securities and Exchange Commission, said the
chain of events described by Price does not suggest insider trading.
"What we're seeing so far is a tip from a company director, who
happened to be another congressman," Crimmins said. "It's a tip that
the company was a good investment based on its ongoing public
research on multiple sclerosis. That's not insider trading, whether
Price bought in the market or in a private placement."
Crimmins said the controversy illustrates the risk that all public
officials take when they invest in individual stocks.
"The safe play to avoid such questions is to stick to fund
investments," he said.
Not everyone is as sanguine as Crimmins. James Cox, a securities law
professor at Duke University School of Law, said Price appeared to
have received the information about Immunotherapeutics by virtue of
his public position.
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"What I heard and thought he admitted to doing was abusing his
position by using information that was not generally publicly
available for private gain," he said.
Price will face additional questioning the Senate Committee on
Finance, which has set a confirmation hearing for Jan. 24. Only
members of the finance committee will vote on whether to send
Price's nomination to the Senate floor for review.
Questioned about President Obama's signature Affordable Care Act,
Price said "nobody is interested in pulling the rug out from anyone"
as Republicans in Congress work to repeal the law and replace it
with an alternative system.
Price said an overhaul of Obamacare will initially focus on
individual health plans sold on online exchanges and the Medicaid
program but would not tackle changes to Medicare. Trump has called
for the immediate repeal of the law and its simultaneous
replacement.
Trump has said that he wants to keep some aspects of Obamacare, such
as allowing young adults to be on their parents' insurance, but that
he wants plans that use health savings accounts. He also advocates
for insurance to be sold across state lines.
Price said that with these new tools, and the rollout of new forms
of high-deductible so-called catastrophic insurance, the government
can expand healthcare coverage to more people. He also echoed
Trump's recent call for "healthcare for all," saying that he wants
more people to be covered after the ACA is repealed.
The nonpartisan Congressional Budget Office on Tuesday said a repeal
of Obamacare would increase the number of people without health
insurance by 18 million in the first year and 32 million by the year
2026.
(Reporting by Toni Clarke and Susan Cornwell in Washington and
Caroline Humer in New York; Additional reporting by Sarah N. Lynch
in Washington; Editing by Kevin Drawbaugh and Tom Brown)
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