Health and Science

HHS pick Price at Senate grilling defends health stock buys as 'transparent, ethical and legal'

Rep. Tom Price, R-GA, testifies before the Health, Education, Labor, and Pensions Committee on his nomination to be the next health and human services secretary on Capitol Hill in Washington, DC on January 18, 2017.
Mandel Ngan | AFP | Getty Images

Rep. Tom Price on Wednesday defended his trading in health-care stocks as legal and ethical as Democratic senators pushed the nominee to head Health and Human Services on the question of whether he should have engaged in such deals.

"Everything that we have done is absolutely above-board, transparent, legal and ethical," the Georgia Republican told a Senate committee reviewing his nomination by President-elect Donald Trump.

Price has traded more than $300,000 in about 40 health-care stocks in the past four years, trades that involved firms that were in position to be boosted by legislation that the congressman favored.

But Price said "I don't know that" he paid less for stock shares in a small Australian biotech company, Innate Immunotherapeutics last year than the public stock price.

Price, in fact, was able to buy shares in the company, which is developing a multiple sclerosis treatment, at a discount because the firm was raising money from so-called sophisticated investors in a private placement offering of the stock.

"It was the price that everybody paid for the private placement," said Price, who has promised to divest his holdings health-care stocks should he be confirmed as secretary of HHS.

Sen. Al Franken, D-Minn., noting that the sale was a private placement to a small number of investors, said: "It really begs credulity ... when you say you did not get a discount on this, sir."

"This sounds like a sweetheart deal," Franken said. "And I think our job in this body and this Congress is to avoid the appearance of conflict, and boy, have you not done this."

Time magazine reported that records show Price invested in six pharmaceutical companies before he co-sponsored a bill that ended regulatory efforts that would have negatively affected the financial performance of those companies.

"I did not know any of those trades were being made," Price said Wednesday. "I knew nothing about those purchases."

Price said he had a broker-directed stock account that allows his broker to make trades and maintain a diversified portfolio for him without his knowing what individual stocks she is buying and selling until after the fact.

CNN on Monday reported that Price purchased stock in medical device company Zimmer Biomet before sponsoring a bill that would have benefited the firm.

The Trump transition team has blasted CNN's story, saying that Price's purchase of that stock was made on his behalf by his broker, and that the congressman only learned about the buy after the fact, and after introducing the bill that could have helped Zimmer Biomet. Trump's transition has demanded a retraction by CNN.

Sen. Patty Murray, D-Wash., asked Price: "Do you believe it is appropriate for a senior member of Congress, actively involved in policymaking in the health center to repeatedly personally invest in a drug company that could benefit from those actions."

But Price objected, "That's not what happened."

Sen. Charles Schumer, the New York Democratic and Senate minority leader, has said Price's trading in Zimmer Biomet may have of violated the law, and he called for a probe.

Correction: This story was revised to correct the spellings of Immunotherapeutics and Biomet.