Ennis & Ennis, P.A.
Does Congress Protect The Public Or Its Pocketbook From Big Pharma?
12/04/2015 - A recent study performed by STAT news analyzed thousands of pages of congressional disclosure forms and found that nearly 30 percent of senators and 20 percent of representatives held assets in biomedical and health-care companies, or in mutual funds created to invest in those industries. The most common investments by house members were in Pfizer, Johnson & Johnson, Merck and Abbott Laboratories. Senate members most commonly held stock in Johnson & Johnson, Pfizer and Merck.
While some may believe congressmen may hold stock in whatever companies they choose, the issue becomes decidedly murky when said congressmen are called to vote on legislation which may protect the safety of the public versus protecting their own investments. For example, when the FDA recently disclosed its plan to regulate diagnostic tests at a recent hearing, New York Representative Chris Collins angrily asserted, “You run the risk of causing people to die.” However, the true cause of Collin’s outrage was his huge financial stake in the issue. He co-founded a company that makes components for those tests and retains an ownership stake in the company valued between $5 million and $25 million.
Collins also sits on the Energy and Commerce Committee and co-sponsored a bill to repeal the tax on medical devices, which would incidentally help two companies which has heavily invested in. He has also proposed pushing the FDA to loosen requirement for post market studies by drug companies to track the safety of drugs after they are on the market. This would obviously help pharmaceutical firms, including one which Collins and his children are the largest stockholders. Collins is certainly not the only congressman involved with these apparent conflict of interest investments.
Welcome to Washington! Members of Congress owned more stock in health-related companies last year than in defense and construction sectors combined, totaling over $68 million in investments. Congressmen can’t avoid voting on bills that benefit one group or industry over another. However, it becomes increasingly worrisome when they vote on issues that affect their personal investments. Dr. Michael Carome, director of Public Citizen’s Health Research Group, noted that, “The fact that members of Congress hold stock in companies while they are passing laws that affect those businesses is a particular area of concern.” This creates an obvious financial conflict of interest.
Joseph Grundfest, a former commissioner with the Securities and Exchange Commission, agrees. “We don’t want members of Congress voting in a way where we have to wonder whether they were representing the public or trying to promote the interests of their portfolio. These are all easily avoidable problems.” Members of the public should be aware of the potential conflicts of interests when their representatives vote in such a fashion that would appear to favor Pharma over the public interests.