WASHINGTON – President-elect Donald J. Trump’s nominee for Health and Human Services secretary faced a grilling Wednesday from Democratic senators concerned about stock trades he made in connection with Rep. Chris Collins, R-Clarence.
In a Senate confirmation hearing, Rep. Tom Price, R-Ga., found himself having to explain his investments in an Australian biotech company called Innate Immunotherapeutics – a firm that lists Collins as its largest shareholder.
Both Sen. Patty Murray of Washington State and Sen. Al Franken, D-Minn., questioned how Price and Collins expanded their investment in the company last year through a “private placement” – a special stock purchase not available to the general public and at a discounted price.
Kaiser Health News reported last week that Price and Collins were able to buy nearly $1 million in company stock at 18 cents a share during that private placement.
Innate Immunotherapeutics’s stock has since quadrupled in value, prompting Murray and Franken to question whether Price and Collins got access to a special deal on the stock because they are members of Congress.
“It really begs credulity when you say you didn’t get a discount on this,” Franken said. “These sound like sweetheart deals.”
Franken said public officials must avoid apparent conflicts of interest.
“And boy, you have not done this,” Franken added.
Price insisted, though, that he had done nothing wrong.
“Everything that we have done has been above-board, transparent, ethical and legal,” said Price, who vowed to sell his investments in health care stocks if he is confirmed as health secretary.
Murray, the senior Democrat on the Senate Health, Education, Labor and Pensions Committee, said Price had told her in a private meeting that Collins gave him the initial tip to invest in Innate Immunotherapeutics.
“What I recall, our conversation was that you had a conversation with Collins and then decided to purchase the stock,” Murray said.
But at the hearing, Price said that while Collins told him about the company, Collins did not talk him into investing in it.
“What happened was that he mentioned, he talked about the company and the work that they were doing in trying to solve the challenge of progressive secondary multiple sclerosis, which is a very debilitating disease,” Price said. “I studied the company for a period of time and felt that it had some significant merit and promise. And I purchased the initial shares on the stock exchange.”
In a statement issued after the hearing, Collins’ spokesman, Michael McAdams, downplayed the conversation between Collins and Price regarding Innate Immunotherapeutics and its experimental treatment for multiple sclerosis.
“During his more than 15 year relationship with Innate Immunotherapeutics, Congressman Collins has had thousands of conversations about the debilitating impact of Secondary Progressive Multiple Sclerosis and the need to help the millions of people suffering from this disease,” McAdams said. “Along the way, he has spoken with hundreds of people. Dr. Price was one of those individuals, as he stated today during his testimony.”
Murray then noted that Price started purchasing the stock at the time that Congress was negotiating the 21st Century Cures Act, which includes provisions authored by Collins that speed clinical trials for new drugs.
The bill could benefit Innate Immunotherapeutics if it ever seeks a clinical trial in the United States. And that fact prompted Murray to ask Price:
“Congressman, do you believe it is appropriate for a senior member of Congress actively involved in policymaking in the health sector to repeatedly personally invest in a drug company that could benefit from those actions? Yes or no?”
“That’s not what happened,” Price replied.
That prompted Murray to say:
“I believe that it’s inappropriate and we need answers to this, regarding whether you and Congressman Collins used your access to nonpublic information when you bought at prices that were unavailable to the public.”
Price said he had no access to nonpublic information about Innate Immunotherapeutics.
And in the statement issued after the hearing, McAdams said: “It’s unfortunate Sen. Murray launched a partisan attack insinuating something nefarious occurred. 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.”
The hearing was just the latest of a number of challenges that Price, a physician by trade, faces before taking charge of the federal department that manages Medicare, Medicaid and the Affordable Care Act.
The top Senate Democrat, Sen. Charles E. Schumer of New York, has asked the Securities and Exchange Commission to investigate a number of Price’s investments in health-related firms.
Rep. Louise M. Slaughter, D-Fairport, has asked the SEC to probe Price’s investments in Innate Immunotherapeutics.
And Franken joined Sen. Elizabeth Warren, D-Mass, and Sen. Tammy Baldwin, D-Wisc., in sending Price a three-page letter filled with detailed questions about his investments in Innate Immunotherapeutics.
Republicans at the hearing largely avoided the Innate Immunotherapeutics issue, instead praising Price’s knowledge of the health care system and his record as a member of Congress.
But Sen. Orrin Hatch, R-Utah, dismissed the Democrats’ questions about Price’s stock investments.
“This appears to be nothing more than a hypocritical attack on your good character,” Hatch said.