HHS Nominee's Stock Trading Warrants Further Investigation, Watchdogs Say

Top Senate Democrats along with public health advocates are calling for an investigation into medical stock trading by Rep. Tom Price (R-Ga.), President-elect Donald Trump's choice to lead the Department of Health and Human Services.

The Wall Street Journalreported late last month that Price "traded more than $300,000 in shares of health-related companies over the past four years while sponsoring and advocating legislation that potentially could affect those companies' stocks."

Price reportedly bought and sold stock in about 40 healthcare and pharmaceutical companies including Eli Lilly & Co., Pfizer Inc., and Aetna Inc., while sponsoring nine and co-sponsoring 35 health-related bills in the House.

For example, the Journal wrote:

Mr. Price has made dozens of trades since 2012. On March 17, 2016, he made 70 trades, adding, among other things, to his holdings of Aetna by as much as $15,000, disclosure reports say.

As he has bought Aetna stock, Mr. Price has championed his own legislation to replace the Obama administration's Affordable Care Act.

The Empowering Patients First Act would provide refundable credits for people to buy insurance if they don't have access to employer or government plans. Such credits could be used to purchase Aetna and others' insurance. On the other hand, Aetna and others are set to benefit from certain provisions of the 2010 health law that Mr. Price's bill would replace.

Now, Senate Minority Leader Chuck Schumer (D-N.Y.), along with Sens. Patty Murray (D-Wash.) and Ron Wyden (D-Ore.) are calling for an investigation by the Office of Congressional Ethics before Price's confirmation hearings begin.

"Congressman Price had the influence and was actively involved in pushing healthcare policies while simultaneously making dozens of trades in companies that would be impacted by those policies," Schumer told reporters on Thursday. "We don't know if he broke the law. But there is certainly enough serious questions to warrant a serious investigation."

Murray echoed that argument in a series of tweets:

The Democrats' call came on the heels of a letter (pdf) from Public Citizen that makes a similar demand. The advocacy group asks the Office of Congressional Ethics and the U.S. Securities and Exchange Commission to investigate Price as well as Rep. Chris Collins (R-N.Y.) "for conflicts of interest and possible insider trading."

"Both members of Congress sit on congressional committees with direct oversight of the pharmaceutical and health industries, are key sponsors of legislation affecting the health care industry, and are very actively trading on pharmaceutical and health care stocks that have reaped substantial profits on the stock market," the letter reads.

Price was chair of the U.S. House of Representatives Budget Committee and a member of the House Ways and Means Subcommittee on Health; he has made at least 630 trades on the stock market, many of them involving the pharmaceutical and healthcare sectors, since 2009. Collins is a member of the House Energy and Commerce Subcommittee on Health and a board member and the largest shareholder of a major biotech company, Australia's Innate Immunotherapeutics Limited--which Public Citizen points out is "a company in which both Price and Collins made major stock purchases within days of each other, according to financial disclosure reports." Those buys came just a few months before both lawmakers voted yes on the 21st Century Cures Act, which authorizes billions in spending on medical research, including $500 million for the FDA to speed up drug approvals.

"Extensive stock trading activity in industries that Price and Collins oversee as congressmen, and unusually good timing and financial benefits of those stock trades, raise red flags about the potential use of insider information," said Craig Holman, government affairs lobbyist for Public Citizen's Congress Watch division. "The public information available falls short of hard evidence of insider trading, but the patterns of trading activity certainly warrant further investigation to determine if it occurred."