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Editorial

Tom Price’s Dubious Trades in Health Care Stocks

Tom Price, President-elect Donald Trump’s nominee to head the Department of Health and Human Services.Credit...Jim Lo Scalzo/European Pressphoto Agency

Even before Tom Price became President-elect Donald Trump’s nominee to head the Department of Health and Human Services, he played a big role in shaping health policy in the House. He also frequently traded health care stocks, raising questions about whether he used his position in Congress for personal profit.

Mr. Price, who will testify at a Senate confirmation hearing on Wednesday, has bought and sold stocks worth more than $300,000 over the last four years, The Wall Street Journal reported last month. His trades included shares of at least two companies that stood to benefit from legislation he voted for, had sponsored or was involved in. Democratic lawmakers have called on the Securities and Exchange Commission to investigate the trades for potential violations of the Stop Trading on Congressional Knowledge Act, which prohibits lawmakers, their staff members and executive branch officials from trading on nonpublic information. Experts say Mr. Price’s trades may have also violated House ethics rules. The Trump transition team says Mr. Price, who is chairman of the House Budget Committee, did nothing wrong and will sell his stocks to avoid conflicts of interest if confirmed.

These questions come at a moment of utter confusion about the Trump team’s position on repealing the Affordable Care Act. Mr. Trump said over the weekend that his replacement for the 2010 law would provide “insurance for everybody,” but Mr. Price previously proposed a replacement that would greatly reduce government spending on health, making it impossible for millions of people to buy health insurance, especially the old, sick and poor. If Republicans repeal major provisions of the A.C.A. as Mr. Price and his Republican colleagues want, the number of Americans without health insurance will increase by 32 million over 10 years from its current historic low of 29 million, or 9.1 percent of the population, the Congressional Budget Office said on Tuesday.

That danger points to the most important line of inquiry at Mr. Price’s hearing, but it should not prevent questioning him as well about his stock trades. For example, can Mr. Price, an orthopedic surgeon, explain his relationship with Zimmer Biomet, a maker of joint replacements? He acquired shares in that company less than a week before introducing legislation that would have delayed a federal regulation expected to hurt Zimmer’s sales, according to CNN. The company also contributed to Mr. Price’s re-election committee. Trump transition officials say Mr. Price was not aware of that stock purchase, which was made by a broker.

He also needs to explain how he came to buy the stock last summer of Innate Immunotherapeutics, a small Australian company that is developing a treatment for multiple sclerosis, through private offerings for sophisticated investors that were not made available to the public. The company’s drug could benefit from the 21st Century Cures Act, which Mr. Price voted for. The law, signed in December, will speed up the Food and Drug Administration’s approval of new medicines. Another lawmaker, Representative Chris Collins of New York, who is a member of the Trump transition team, is Innate’s largest shareholder and is on its board.

At the very least, Mr. Price exercised abysmal judgment by trading the shares of companies over whose fortunes he exercised so much control. A conscientious public servant would have been expected to avoid direct investments in health stocks entirely and instructed his broker to do so, too.

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A version of this article appears in print on  , Section A, Page 22 of the New York edition with the headline: Tom Price’s Dubious Stock Trades. Order Reprints | Today’s Paper | Subscribe

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