This week, the Senate will hold confirmation hearings for Rep. Tom Price (R-GA), President-elect Donald Trump’s pick for Secretary of Health and Human Services. Monday evening, CNN reported that Price may have used his position in Congress for profit in what appears to be insider trading, a new allegation among many that are now clouding his nomination.
Last March, Price bought as much as $15,000 in stock in a company called Zimmer Biomet, one the world’s largest manufacturers of knee and hip implants. Within a week of that transaction, he introduced the HIP Act, a bill that would have saved Zimmer Biomet a significant amount of money by delaying implementation of a Centers for Medicare and Medicaid (CMS) payment model for hip and knee replacements. After Price introduced the bill, Zimmer Biomet’s political action committee donated $1,000 to his reelection campaign.
A spokesman for the Trump transition team, Phil Blando, defended Price, insisting, “Any effort to connect the introduction of bipartisan legislation by Dr. Price to any campaign contribution is demonstrably false.”
But Sen. Minority Leader Chuck Schumer (D-NY) called on the Office of Congressional Ethics to investigate whether Price had violated any laws.
OCE needs to conduct an immediate, thorough investigation into Rep. Price's potential violations of the STOCK Act before nom moves forward. https://t.co/RDnc6t839X
— Chuck Schumer (@SenSchumer) January 17, 2017
This isn't just a couple of questionable trades, but rather a pattern of Rep Price trading stock & using his office to benefit those cos. https://t.co/LlQbqGqAls
— Chuck Schumer (@SenSchumer) January 17, 2017
This is only the latest such allegation that Price has faced. In December, the Wall Street Journal reported that over the last four years, Price has traded more than $300,000 in shares of health-related companies while pushing for bills that could benefit those companies’ stocks.
Last summer, the then-tiny Australian biotech firm Innate Immunotherapeutics sold nearly $1 million in discounted shares to Price and Rep. Chris Collins (R-NY). Price had first invested $5,000 in January 2015, but his largest purchase was last August, when he invested between $50,000 and $100,000, on which he has seen about a 400 percent paper gain.
One of Price’s top campaign supporters has been the Georgia-based company MiMedx, and its CEO Parker H. “Pete” Petit. Kaiser Health News obtained an email from May 2015 showing Petit pressuring all of his managers to “IMMEDIATELY” donate to Price’s PAC. “We have PAC business to transact, and we need at least 50 donors to do so.” Later that day, another executive sent another email to his subordinates, demanding, “So who hasn’t donated?”
Dr. Jen Gunter, a medical blogger, also raised new ethics questions about Price on Monday. She noted that a Dr. Thomas Price of Georgia received $2,000 from a company called Daiichi Sankyo Inc., a Japanese pharmaceutical company, on September 2, 2014. Four months later, Daiichi Sankyo Inc. paid the U.S. federal government $39 million in a settlement related to the False Claims Act, which prevents companies from paying kickbacks like speaker fees to physicians for promoting and prescribing their drugs. Price, an orthopedic surgeon, wasn’t practicing medicine at the time, but according to the settlement, Daiichi Sankyo Inc. paid out speakers fees even when participants at their corporate dinners took turns “speaking” on the same topic.
It’s unclear why Price received the $2,000 from the pharmaceutical company.
Price has promised to divest himself of all of his stocks and avoid taking any actions from which he might financially benefit. Schumer, however, isn’t convinced. In a statement accompanying his call to have Price investigated prior to his hearing, he said, “The President-elect claims he wants to drain the swamp, but Congressman Price has spent his career filling it up.”
UPDATE: ThinkProgress filed a Freedom of Information Act request with several agencies seeking any communications Price may have had with them concerning Daiichi Sankyo or Zimmer Biomet.