WASHINGTON (Reuters) - 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.
Reporting by Toni Clarke and Susan Cornwell in Washington and Caroline Humer in New York; Additional reporting by Sarah N. Lynch in Washington; Editing by Kevin Drawbaugh and Tom Brown