Trump health pick defends stocks, says Americans won’t lose insurance

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By Toni Clarke and Susan Cornwell | WASHINGTON

WASHINGTON President-elect Donald Trump’s
nominee to head the U.S. Department of Health and Human Services
defended his stock holdings and proposals to dismantle Obamacare
on Wednesday, saying Americans would not suddenly lose health
insurance.

Representative Tom Price told the Senate Committee on
Health, Education, Labor and Pensions, one of two that oversee
the health department, that there was no connection between his
purchase of certain health company stocks and his promotion of
legislation that would have helped the companies. He said the
stocks were bought on his behalf by a broker.

“I had no knowledge of those purchases,” he said.

Price owns a variety of healthcare stocks, including biotech
firm Amgen Inc, pharma companies Bristol-Myers Squibb
Co, Eli Lilly & Co and drug distributor McKesson
Corp. He has said he will divest health and other stocks
that could be affected by his position as health secretary.

Price, an orthopedic surgeon, said he did personally direct
his broker to buy shares of Australian biotech company Innate
Immunotherapeutics Ltd. He said he was made aware of the stock
by Republican Congressman Chris Collins, who serves on
Immunotherapeutics’ board, but denied he had been given any
inside information or broken any laws. He said he did his own
due diligence on the company.

A spokesman for Collins, Michael McAdams, said in a
statement that Collins’ relationship with Immunotherapeutics
goes back more than 15 years, during which he has spoken with
hundreds of people, including Price.

“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.”

Senator Patty Murray, the top Democrat on the panel, said
the purchase raised questions that need a full investigation
before the Senate goes forward with his confirmation.

Stephen Crimmins, an attorney with Murphy and McGonigle and
former lawyer with the U.S. Securities and Exchange Commission,
said the chain of events described by Price does not suggest
insider trading.

“What we’re seeing so far is a tip from a company director,
who happened to be another congressman,” Crimmins said. “It’s a
tip that the company was a good investment based on its ongoing
public research on multiple sclerosis. That’s not insider
trading, whether Price bought in the market or in a private
placement.”

Crimmins said the controversy illustrates the risk that all
public officials take when they invest in individual stocks.

“The safe play to avoid such questions is to stick to fund
investments,” he said.

Not everyone is as sanguine as Crimmins. James Cox, a
securities law professor at Duke University School of Law, said
Price appeared to have received the information about
Immunotherapeutics by virtue of his public position.

“What I heard and thought he admitted to doing was abusing
his position by using information that was not generally
publicly available for private gain,” he said.

Price will face additional questioning the Senate Committee
on Finance, which has set a confirmation hearing for Jan. 24. Only members of the finance committee will vote on whether to
send Price’s nomination to the Senate floor for review.

Questioned about President Obama’s signature Affordable Care
Act, Price said “nobody is interested in pulling the rug out
from anyone” as Republicans in Congress work to repeal the law
and replace it with an alternative system.

Price said an overhaul of Obamacare will initially focus on
individual health plans sold on online exchanges and the
Medicaid program but would not tackle changes to Medicare. Trump has called for the immediate repeal of the law and its
simultaneous replacement.

Trump has said that he wants to keep some aspects of
Obamacare, such as allowing young adults to be on their parents’
insurance, but that he wants plans that use health savings
accounts. He also advocates for insurance to be sold across
state lines.

Price said that with these new tools, and the rollout of new
forms of high-deductible so-called catastrophic insurance, the
government can expand healthcare coverage to more people. He
also echoed Trump’s recent call for “healthcare for all,” saying
that he wants more people to be covered after the ACA is
repealed.

The nonpartisan Congressional Budget Office on Tuesday said
a repeal of Obamacare would increase the number of people
without health insurance by 18 million in the first year and 32
million by the year 2026.

(Additional reporting by Sarah N. Lynch in Washington)



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