Policy

Donors to HHS Nominee Have Stakes in FDA, Medicare Decisions

Trump’s choice is a break from trend of presidents tapping governors and academics

Health and Human Services Secretary designee Tom Price would oversee issues including a major congressional overhaul of rules on how Medicare pays doctors. (Bill Clark/CQ Roll Call file photo)

Companies and trade groups that have donated to Rep. Tom Price’s campaign funds have major financial stakes in the decisions that he will oversee if confirmed as the next Health and Human Services secretary.

Among the contributors is a maker of placenta-based wound care products that’s in open conflict with a rival over Food and Drug Administration regulations. Based about a dozen miles from the Georgia Republican’s district office, MiMedx Group stands out among Price’s contributors for giving big money relative to its size.

MiMedx donated $21,800 in the 2015-2016 campaign cycle to Price’s campaign funds, according to a tally by the nonpartisan Center for Responsive Politics, putting it just behind the American Medical Association’s $22,000 contribution to the lawmaker’s combined political accounts.

MiMedx, which had sales last year of $187 million, bested contributions to Price from health care giants. Price received $6,500 in donations, the center found, from both the insurer Cigna Corp., which reported about $38 billion in 2015 revenue, and the mammoth drug company Johnson & Johnson, which reported $70 billion in sales. Aetna Inc., another insurer, contributed $12,500 and had $60 billion in revenue last year.

Price, whom President-elect Donald Trump called a “go-to expert” on health policy in announcing his nomination for HHS secretary, received more than $800,000 in total campaign contributions this cycle, according to OpenSecrets.org.

Price is noted for his role as House Budget chairman in leading GOP efforts to dismantle the 2010 health care law. As a doctor and a member of the Ways and Means Committee, he has taken a deep interest in the detailed workings of Medicare and the payment policies of the giant federal health program.

Health companies are not the only top contributors to Price. The Peter G. Peterson Foundation, which focuses on efforts to rein in the nation’s debt, was one of Price’s top contributors, with $30,800 for the 2015-2016 cycle, according to the OpenSecrets database. Koch Industries, which seeks to limit government regulation, gave him $20,000.

As HHS secretary, Price would have direct influence over decisions that affect many of the companies and groups that have donated to his campaign funds. Trump’s choice marks a break with the recent three-decade trend of presidents often tapping governors and academics to lead HHS.

[Reports: Trump Picks Tom Price for HHS Secretary]

Amgen Inc., one of the world’s largest biotechnology companies, finds Price supportive of issues such as “patient access and innovation preservation,” said Kelley Davenport, a company spokeswoman. The Thousand Oaks, California-based company contributed $14,000 to Price in the 2015-2016 cycle through its political action committee, according to OpenSecrets.

“Dr. Price is a well-respected thought leader on health care issues,” Davenport said.

Amgen depends heavily on the federal government for its profit. Federal decisions indirectly and directly influence its ability to sell products. The FDA is hashing out rules on marketing claims for copycat versions of biotech drugs. These may influence both the adoption of Amgen’s own copycat products and the rate at which it may lose sales to competing generic versions.

The Centers for Medicare and Medicaid Services is a top purchaser of products to treat cancer and rheumatoid arthritis, diseases for which Amgen sells treatments. The agency “has substantial power to quickly implement policy changes that can significantly affect how our products are covered,” Amgen said in a recent regulatory filing.

Price’s office didn’t respond to requests for comment on donations. Companies and organizations make donations to lawmakers for a variety of reasons, said Meredith McGehee, strategic adviser at the nonpartisan Campaign Legal Center. Contributors may agree with a candidate’s ideology, she said, or want to secure the attention of a lawmaker to influence policies.

“It’s an investment,” McGehee said. “For business, particularly, they do a return-on-investment analysis. That’s just built into the system.”

Officials for MiMedx, the human tissue company, declined to comment for this story. Its experience on Sept. 4, 2013, shows how even tentative decisions from federal agencies can affect corporate finances.

[FDA Approval Changes Could Affect Drug Prices]

MiMedx shares fell by more than a third on news that the FDA was concerned about certain MiMedx products, specially treated tissues intended to help heal wounds by reducing inflammation and preventing scar tissue formation. The agency alleged that the company would need to obtain FDA permission to sell them.

The company remains locked in a debate with the FDA over how the agency should regulate its products. MiMedx is also at odds with Organogenesis, a rival whose treatments are already approved. Organogenesis wants the FDA to have a more active role, which would benefit them over MiMedx.

The FDA has, since 2014, been wrestling with a guidance document on regulation of these products. MiMedx warned investors in its routine regulatory filing about the risks from an unfavorable FDA decision. The agency could impose marketing restrictions or even force MiMedx to halt sales that made up 12 percent of its revenue last year.

Price would oversee other issues, including an overhaul of rules on how Medicare pays doctors.

CMS is also revising regulations that are meant to spur greater use of electronic health records. McKesson Corp. – a health information and technology company affected by the Medicare and Medicaid electronic records rules and other HHS policies — gave Price $20,000.

Price has been active in Congress on these issues, which the American Medical Association monitors closely. The AMA gave Price more contributions than any other lawmaker in the 2015-2016 cycle except for Minnesota Rep. Erik Paulsen, the center found.

The American Academy of Orthopaedic Surgeons gave $20,000 to Price, who is an orthopedic surgeon. Other contributors included the American College of Cardiology and American College of Radiology, which both gave $20,000.

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