Tom Price’s Latest Corruption Scandal Explained

Summary

• Congressman Tom Price is under fire for yet another serious example of corruption: using his congressional office to pad his own pocket.

• In this latest example, Rep. Price bought shares in the medical devices company Zimmer Biomet.

• Less than a week after the purchase, he introduced legislation that would boost the company’s bottom line.

• He spent a year and a half lobbying the Department of Health and Human Services for regulation changes that would also profit the company – and stockholders like himself.

• This is not the only example of corruption. In fact, the Wall Street Journal reported that Rep. Price traded over $300,000 in healthcare company stocks while using his office to advocate for legislation that could have impacted those stock prices and lined his pockets with cash.

Latest Tom Price Corruption Scandal

March 2016: Tom Price Bought Up To $15,000 Of Shares In Medical Device Manufacturer Zimmer Biomet “Rep. Tom Price last year purchased shares in a medical device manufacturer days before introducing legislation that would have directly benefited the company, raising new ethics concerns for President-elect Donald Trump’s nominee for Health and Human Services secretary. Price bought between $1,001 to $15,000 worth of shares last March in Zimmer Biomet, according to House records reviewed by CNN.” [CNN,1/16/17]

Less Than A Week Later Introduced Legislation To Delay A Pending CMS Regulation That Analysts Warned Would Hurt Zimmer Biomet “Less than a week after the transaction, the Georgia Republican congressman introduced the HIP Act, legislation that would have delayed until 2018 a Centers for Medicare and Medicaid Services (CMS) regulation that industry analysts warned would significantly hurt Zimmer Biomet financially once fully implemented.” [CNN, 1/16/17]

Zimmer Biomet Is One Of The World’s Leading Manufacturers Of Knee And Hip Implants, And Would Have Been One Of The Companies Hit Hardest By A CMS Rule Directly Changing Payments For Such Procedures. “Zimmer Biomet, one of the world’s leading manufacturers of knee and hip implants, was one of two companies that would have been hit the hardest by the new CMS regulation that directly impacts the payments for such procedures, according to press reports and congressional sources. After Price offered his bill to provide Zimmer Biomet and other companies relief from the CMS regulation, the company’s political action committee donated to the congressman’s reelection campaign, records show.” [CNN, 1/16/17]

Zimmer Biomet Would Have Been Hit Hard By A New CMS Regulation Changing Payments For Hip And Knee Implants Through Medicare, As Hip And Knee Implants Made Up 60 Percent Of The Company’s Revenue. “And over the past year-and-a-half, Price raised objections to the CMS regulation that proposed major changes to how providers and manufacturers are paid and reimbursed for hip and knee implants through Medicare. But medical device manufacturers, in particular, were poised to be hit the hardest by the new regulation, according to industry officials and congressional sources. And that posed a significant threat to Zimmer Biomet, which bills itself as a worldwide leader in hip and knee replacements. A report from trade publication Fierce Biotech last year said that the company’s hip and knee implants account for 60 percent of its revenue.” [CNN, 1/16/17]

September 2015: Tom Price Wrote To The Acting Administrator Of CMS Asking To Delay A Regulation Changing How Manufacturers Were Paid For Knee And Joint Implants, And Two Days Later Zimmer Biomet Donated To Price’s Campaign Committee. “And over the past year-and-a-half, Price raised objections to the CMS regulation that proposed major changes to how providers and manufacturers are paid and reimbursed for hip and knee implants through Medicare… In September 2015, Price spearheaded a letter to Andy Slavitt, the acting administrator of CMS, asking that the regulation be delayed because it ‘represents a significant change to our healthcare delivery system which could have a negative impact on patient choice, access and quality.’ Two days after the letter, Zimmer Biomet’s PAC cut Price’s reelection committee a check worth $1,000, according to campaign finance filings.” CNN, 1/16/17]

Three Months After Price Introduced Legislation To Delay A CMS Regulation, Zimmer Biomet’s PAC Cut Another Check To Price’s Campaign Committee. “When CMS didn’t listen to Price, the congressman unveiled his legislation to delay implementing the regulation until 2018, with the bill coming days after investing in the company [Zimmer Biomet], whose shares were worth $103.59 at the time. Three months after he introduced the bill, the company’s PAC cut Price’s campaign committee another $1,000 check, according to records.” [CNN, 1/16/17]

What We Already Knew

Price Traded Over $300,000 In Shares Of Health Companies As He Sponsored And Pushed Bills That Could Have Affected Those Companies’ Stock.  “President-elect Donald Trump’s pick to run the Health and Human Services Department [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.” [Wall Street Journal, 12/22/16]

• Since 2012, Price Traded Stock In About 40 Health, Pharmaceutical And Biomedical Companies, Including 12 When Congress Was In Session. “Rep. Tom Price, a Georgia Republican, bought and sold stock in about 40 health-care, pharmaceutical and biomedical companies since 2012, including a dozen in the current congressional session, according to a Wall Street Journal review of hundreds of pages of stock trades he filed with Congress.  In the same two-year period, he has sponsored nine and co-sponsored 35 health-related bills in the House.” [Wall Street Journal, 12/22/16]

• Since 2012, Price Sponsored Nine Health Related Bills While Cosponsoring 35.“Rep. Tom Price, a Georgia Republican, bought and sold stock in about 40 health-care, pharmaceutical and biomedical companies since 2012, including a dozen in the current congressional session, according to a Wall Street Journal review of hundreds of pages of stock trades he filed with Congress.  In the same two-year period, he has sponsored nine and co-sponsored 35 health-related bills in the House.” [Wall Street Journal, 12/22/16]

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