HHS Nominee Tom Price, Staff Aided Donors in Agency Battles
Democrats seek to undercut his nomination
By KERRY YOUNG and ANDREW SIDDONS
CQ Roll Call
President-elect Donald Trump’s choice to lead the Department of Health and Human Services has advocated over the years for companies with the federal agencies he may soon oversee. At least three of the companies aided by Rep. Tom Price and his staff contributed to his campaign funds.
A CQ Roll Call review of more than 5,600 pages of congressional correspondence with HHS employees provides a picture of a lawmaker who has taken a deep interest in the workings of the Medicare entitlement program’s payments to the health industry. Price, a former surgeon, or his staff also pressured the Food and Drug Administration and the Agency for Healthcare Research and Quality to heed requests and complaints he received from donors and constituents. The documents were released in batches over the past couple of days in response to a Freedom of Information Act filed last year.
“Throughout his years as a practicing physician and now a public servant, Dr. Price has always brought a compassion and commitment to his duties and responsibilities,” said Trump transition spokesman Phil Blando. “As an orthopedic surgeon caring for, among others, seniors and Medicaid patients, he knows first-hand the challenges facing our health care system. Dr. Price is grateful for the opportunity to bring his expertise to enacting better policies. Any suggestion that his motivations for public service have been anything other than seeking to improve the lives of the American people is simply wrong.”
Price’s nomination is one of several that Democrats are seeking to undercut although Republicans can approve federal agency nominees with 51 Senate votes. They have 52 in that chamber and Vice President-elect Mike Pence can break a tie.
The developments come as Price also faces questions about his trades in health industry stocks despite his seat on the Ways and Means Health Subcommittee, which CQ Roll Call reported first on Dec. 21. The Georgia Republican disputed this week that he got insider information about the Australian biotech Innate Immunotherapeutics from Rep. Chris Collins, R-N.Y., who serves on the company’s board. Price conceded to receiving a break on the cost of buying his shares.
Price’s actions on behalf of contributors raise questions about his judgment, as does the lawmaker’s habit of trading in health stocks, said Richard W. Painter, who was an ethics adviser for President George W. Bush. Lawmakers should avoid taking up specific complaints or requests from companies that have donated to their campaigns, he said. It’s not an uncommon practice among members of Congress, but it opens them up to perceptions of having traded their influence, according to Painter, now a professor at the University of Minnesota Law School.
“You tread dangerously close to the line. There’s no clear rule here, but you can make yourself much more vulnerable to accusations of quid pro quo,” Painter told CQ Roll Call. “Getting involved in matters where campaign contributors are parties is not a wise thing to do in most circumstances.”
The HHS documents show that Price has focused much of his attention on the Centers for Medicare and Medicaid Services. Price asked then-CMS Administrator Marilyn Tavenner in 2014 to consider allowing extra payments for CardioMEMS, a system meant to measure pulmonary artery pressure and wirelessly transmit the data to patients’ doctors and medical professionals. In his July 15 letter, Price describes the system as a product of “Atlanta-based” CardioMEMS. However, two months earlier, cardiology giant St. Jude Medical Inc., had bought the company, in which it already had a stake, paying $344 million to CardioMEMS shareholders to acquire the remaining 81 percent ownership interest.
St. Jude donated $2,000 to Price’s campaign funds in the cycle ending in 2014. That amount is less than its top recipients of campaign cash for that cycle. Rep. Erik Paulsen, R-Minn., got $11,000 and Sen. Tim Scott, R-S.C., got $10,250, according to the nonprofit Center for Responsive Politics’ database. However, the contribution raises questions about Price’s motivations.
Price argued that the extra money would improve patients’ care. The CardioMEMS device is expected to let doctors earlier detect warning signs of worsening heart failure and thus let them intercede before patients’ conditions deteriorate.
“In fact, data from an FDA clinical trial demonstrated an approximately one-third reduction in heart failure-related hospitalizations for patients with pulmonary artery pressure monitoring,” Price wrote in his letter to Tavenner. “We respectfully request that you give full consideration to the CardioMEMS new technology application to ensure appropriate access for Medicare beneficiaries.”
Price appears to have been scrawled “Thank you!” on the letter’s margins. Tavenner responded on July 30, 2014, noting his interest and saying that CMS would make a final decision by Aug. 1 of that year. The add-on payments are determined in Medicare’s annual rule on hospital payments, Tavenner noted in her reply.
Price was far from alone in advocating for the special Medicare add-on payment, which the agency uses to encourage the adoption of new technologies that could improve patients’ health. More than 30 comments submitted on Medicare’s fiscal 2015 hospital inpatient payment policies, including requests from the American College of Cardiology, referred to the product.
CMS did approve the special add-on payment for CardioMEMS, stating in the final rule in August 2014 that the operating cost of the system would be $17,750 a patient.
CMS appears to have been less inclined to agree with Price on a 2012 request that Medicare allow more people to use Vertos Medical’s device for lumbar spinal stenosis, a condition that can cause back pain. Price argued that the device from Vertos was an alternative to more invasive and expensive procedures. Tavenner responded that there was no need for a special billing code to cover the product and suggested Vertos work within the normal channels to secure the payment changes its executives desired.
Defense of Power Plant Fined for Pollution
The documents include Price’s letter to CDC on behalf of a power company with Georgia roots. He and Rep. John Linder, R-Ga., wrote to the Centers for Disease Control and Prevention director at the time, Julie Gerberding, on July 8, 2008, about an investigation of pollution from the Potomac River Generating Station, a power plant located in Alexandria, Virginia. The plant then was owned by Atlanta-based Mirant Corp., which had more than 380 employees living in the combined districts of Linder and Price. Mirant contributed $6,000 to Price’s campaign funds, making him one of the top GOP recipients of its money in the 2008 election cycle.
Price and Linder argued for a need for an agreement on consistent standards between CDC and its partner, the Environmental Protection Agency.
“Divergent acceptable sulfur dioxide concentration levels would provide contradictory guidance and cause possible delays in implementing necessary health standards — neither are acceptable outcomes,” the lawmakers wrote.
In response, Gerberding assured Price and Linder that the report on the station will “be scientifically sound and based on a clear and transparent process.” The CDC in 2011 said that breathing air around the Potomac River station could at times pose risk for people with asthma and other conditions. The plant was shuttered in 2012, a year after paying $275,000 in fines for excessive pollution. NRG Energy, Inc., which owns it, is decommissioning the plant in compliance, according to its website.
Heart Failure Drug Marketed to African-Americans
Price’s staff interceded with federal agencies in other ways on behalf of Georgia companies that contributed to him. Gary Beck, a policy assistant in Price’s office, repeatedly emailed the Agency for Healthcare Research and Quality from July through November last year about Arbor Pharmaceuticals LLC’s complaints about a web posting on its drug BiDil.
A 2010 ARHQ analysis found “no apparent benefit” from Arbor’s BiDil heart failure drug in a sample group either “as a whole, or within any racial/ethnic subgroup.” The report does note “relatively lower hazards for death or hospitalization” for heart failure for African-Americans taking the drug than for people who are Hispanic or white.
BiDil generated headlines and controversy in 2005 when the FDA approved it as a heart failure drug specifically indicated for self-identified African American patients. Its developer, NitroMed, Inc., in 2008 agreed to sell the drug to JHP Pharmaceuticals, LLC, a privately held specialty pharmaceutical company. It’s now marketed by Arbor, a firm based in Price’s district, according to the address on its website. Arbor Chief Executive Edward Schutter donated $2,700 to Price’s campaign funds in 2015, the year before Beck began emailing the agency. Arbor didn’t return calls placed to the firm on Thursday.
Arbor claimed that the AHRQ materials were outdated and sought to have them removed, according to an email from Beck of Price’s office. He and AHRQ official Francis D. Chesley, Jr. corresponded repeatedly last year about how AHRQ could address this. In the end, AHRQ left the study on its website but added a disclaimer marked in red: “Note: This report is greater than 5 years old. Findings may be used for research purposes but should not be considered current.”
Helping Constituent With Drug Importation
The HHS documents also show Price’s staff forwarding constituent complaints to the FDA, including one that aligns with changes in HHS drug policies supported by Sen. Bernie Sanders, I-Vt.
In February 2006, Price’s office appealed to the FDA on behalf of a constituent in need of a medicine for a surgery. While both drugs were available for sale in the United States, the patient was trying to import them from Canada, where they were presumably cheaper. The drugs were being held in customs, and the FDA explained the Price that it wasn’t legal to import the drugs manufactured outside of the country.
“Certain Internet websites have stated that personal importation of up to a 90-day supply of prescription medications is legal,” the FDA said in its response to Price. “This statement is not true.” While there are some exceptions to this policy, the FDA noted that the drugs in question were available in the U.S. and wouldn’t qualify for a personal importation exemption. The FDA also suggested other ways to save money on drugs. “Consumers are encouraged to shop around for price comparisons, ask their doctor or pharmacist for generic alternatives, and take advantage of prescription drug discount cards.
Note: This story was first published in CQ.com on Jan. 19