Rep. Tom Price (R-Ga.), President-elect Donald Trump's nominee for HHS secretary, last year bought shares in a medical device manufacturing company days before introducing legislation that could have directly benefited the manufacturer, CNN reports.
According to House records reviewed by CNN, Price in March 2016 purchased between $1,001 and $15,000 worth of shares in Zimmer Biomet, one of the world's largest manufacturers of hip and knee implants. A few days later, Price introduced legislation that would have delayed until 2018 the start of a new Medicare payment model for hip and knee replacements, the Comprehensive Care for Joint Replacement Model.
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According to CNN, Zimmer Biomet "was one of two companies that would have been hit the hardest by the new" payment model, which affects how much providers are paid for performing hip and knee replacements.
Further, records show that Zimmer Biomet's political action committee donated to Price's re-election campaign after Price introduced the legislation, CNN reports.
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A Price aide told CNN that a financial adviser purchased the stocks on Price's behalf without the lawmaker's knowledge. The aide said Price did not know about the purchase until April 4, 2016, after Price introduced the legislation. Price then continued to hold about $2,000 worth of shares in the company.
Phil Blando, a spokesperson for Trump's transition team, said, "Any effort to connect the introduction of ... Price's legislation, co-sponsored with Democrats, to a campaign contribution is demonstrably false."
Blando also said Price has been "compliant with congressional disclosure rules" and "will comply fully with the recommendations put forward by" HHS' ethics office. He added, "Given this agreement, we expect the Senate to move expeditiously with consideration of ... Price's nomination."
Sen. Lamar Alexander (R-Tenn.), chair of the Senate Health, Education, Labor and Pensions Committee, recently said he expects Price "would be confirmed at least by mid-February." The Senate Finance Committee, which will vote on Price's confirmation, has not yet scheduled a confirmation hearing.
Schumer calls for investigation
Price has already faced some criticism for trading stock in dozens of companies while supporting legislation that could affect those companies.
The Wall Street Journal late last year reported that Price traded stock in dozens of companies while supporting legislation that could affect those companies. According to the Journal, Price bought and sold more than $300,000 in stock in about 40 health care, pharmaceutical, and biomedical companies over four years.
Senate Minority Leader Chuck Schumer (D-N.Y.) and the nonpartisan watchdog group Public Citizen earlier this month called for ethics investigations into whether Price wrongfully benefited from his position in the House while trading health care industry stock.
In response to CNN's report, Schumer in a statement again called for the Office of Congressional Ethics to immediately investigate whether Price violated federal law, saying, "This new report makes clear that this isn't just a couple of questionable trades, but rather a clear and troubling pattern of ... Price trading stock and using his office to benefit the companies in which he is investing." He added, "This report and his previous trades cast serious doubt on whether ... Price is fit to hold the office of" HHS secretary."
Larry Noble—general counsel at the Campaign Legal Center, a watchdog group—said the new revelations "clearly ha[ve] the appearance of using your influence as a congressman to your financial benefit." However, Noble added that while the timing is concerning, Price might not have introduced the legislation solely to benefit his financial interests.
Price says he will divest certain financial interests, resign from medical boards
In related news, Price in a letter sent last week to HHS' General Counsel for Ethics said he will divest his financial interests in 43 companies, including Zimmer Biomet, to avoid conflicts of interest if he is confirmed as HHS secretary.
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Price in the letter wrote that if confirmed, he would "not participate personally and substantially in any particular matter in which [he] know[s] that [he has] a financial interest directly and predictably affected by the matter, or in which [he] know[s] that a person whose interests are imputed to [him] has a financial interest directly and predictably affected by the matter, unless [he] first obtain[s] a written waiver" under federal law. Price added that if he is confirmed he would divest his financial interests in 43 companies to avoid potential conflicts of interest within 90 days of his confirmation as HHS secretary.
Price also wrote that if he is confirmed as HHS secretary, neither he, his spouse, nor his children would "acquire any direct financial interests in entities listed on the FDA prohibited holdings list or entities involved, directly or through subsidiaries" in various health care-related industries.
Further, Price wrote that he would resign from his position as a delegate of the American Medical Association (AMA) if he is confirmed as HHS secretary. He added that he would not participate in matters that he knows "AMA is a party or represents a party" to for a year after his confirmation "unless [he is] first authorized to participate" under federal law.
In addition, Price wrote that he would resign from his position as a managing partner at Chattahoochee Associates, though he would continue to have a financial interest in the group. Price wrote that he would "not provide services material to the production of income" for the group, and instead would "receive only passive investment income" (Raju, CNN, 1/16; Modern Healthcare, 1/16; Frieden, MedPage Today, 1/16; Wheeler, The Hill, 1/16; Holland, Reuters, 1/17; Pugh, McClatchy/Sacramento Bee, 1/12; Price letter, 1/11; Rappleye, Becker's Hospital Review, 1/12; AP/Modern Healthcare, 1/12; Hellmann, The Hill, 1/12; Young, CQ News, 1/12 [subscription required]).
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