REPORT: Key lawmakers own major stakes in biopharma, healthcare firms they oversee
- Key figures in the U.S. Senate and House of Representatives own significant stakes in healthcare and life sciences companies, according to an extensive analysis of Congressional disclosure forms by Stat News.
- The analysis finds that major lawmakers who sit on powerful committees overseeing biopharma and healthcare, such as the House Energy and Commerce Committee and House Judiciary Committee, are actively invested in companies running the gamut from smaller biotechs to biopharma giants such as Johnson & Johnson, Pfizer, Merck, and Gilead.
- The report specifically singles out Rep. Chris Collins (R-NY) as the largest stakeholder in—and a non-executive director of—the biotech Innate Immunotherapeutics. Stat's analysis suggests that some lawmakers invested in such companies have pushed for laws that would directly benefit the very firms they own stakes in, such as Collins' efforts to loosen the FDA's post-marketing surveillance rules as a member of the Energy and Commerce Committee.
In an election cycle that has already placed the biopharma industry's practices front and center, this report is bound to elicit outrage from some presidential contenders (and may even shine a spotlight on contributions these candidates themselves receive from the sector).
It's no secret that members of Congress (unlike most other government employees) are allowed to own stakes in firms they oversee through direct ownership of assets or specialty mutual funds. The STOCK Act, which was signed into law by President Barack Obama in 2012, aimed to make some reforms to this dynamic by prohibiting insider trading by members of Congress and government employees or the use of non-public information for personal financial gain. That law, however, does not prohibit publicly disclosed investments by lawmakers.
What's ultimately striking about the analysis is the sheer number of Congress members who engage in this type of financial activity and the sizes of their stakes.
For instance, Collins isn't just a director at Innate. He also co-founded the diagnostic devices firm ZeptoMetrix and values his assets in that company at between $5 million and $25 million. Collins went on to advocate for the repeal of the Affordable Care Act's medical devices tax.
Approximately 30% of U.S. Senators and 20% of U.S. House of Representatives members are invested in biopharma and healthcare firms, according to the report. And the companies that receive the most congressional financial interest include some of the most powerful pharmaceuticals in America, including Pfizer, Johnson & Johnson, Merck, Abbott Labs, and Gilead.
In fact, House Energy and Commerce Committee Chairman Rep. Fred Upton (R-MI), who successfully pushed through the biopharma-friendly 21st Century Cures Act in his committee, reportedly owned more than $130,000 in pharma stocks (alongside his wife) while that very legislation was being drafted.
Other members of Congress such as Reps. David McKinley (R-WV) and Scott Peters (D-CA) also carry significant stakes in the industry, with McKinley adding several biopharma firms to his portfolio after 21st Century Cure's passage. One striking exception to this overall trend was Sen. David Vitter (R-LA), who pushed for allowing Americans to re-import U.S.-made drugs from Canada despite industry opposition and the fact that he also owned more than $50,000 in pharma stocks.
These lawmakers are likely to argue that their investments are all on the up-and-up, as evidenced by the fact that Stat was able to access all of this information in the first place. And biopharma companies have an obvious interest in allying with lawmakers who also have vested interests in the sector's success. Nonetheless, this analysis may lead to some uncomfortable questions regarding Congress members' independence from the very companies they regulate.