US Senator calls on Medicare nominee Dr. Oz to sever industry ties

PHOTO CAPTION: Pennsylvania Republican Senate candidate Mehmet Oz delivers remarks at a rally ahead of the 2022 U.S. midterm elections in Pennsburg, Pennsylvania, U.S., November 7, 2022. REUTERS/Hannah Beier

By Ahmed Aboulenein

WASHINGTON (Reuters) -President Donald Trump's nominee to lead the agency overseeing Medicare should divest financial ties to healthcare and pharmaceutical companies that could benefit from his policy decisions, Democratic U.S. Senator Elizabeth Warren said on Wednesday.

Television personality and surgeon Dr. Mehmet Oz is scheduled to appear on Friday before the Senate Finance Committee, on which Warren sits. The panel will hold a confirmation hearing for his nomination to be administrator of the Centers for Medicare and Medicaid Services, a wide-reaching agency with annual spending of $2.6 trillion.

In a letter addressed to him seen by Reuters, Warren called on Oz to divest from his financial holdings related to industries regulated by the agency and commit to strong ethics safeguards.

Oz owns healthcare stocks in UnitedHealth Group, which administers Medicare Advantage plans, and drugmakers Abbvie and Eli Lilly which manufacture drugs his agency negotiates prices for, his latest ethics disclosure shows. 

He owns stocks and serves as advisor to several companies selling nutritional supplements, medical diagnostic technologies, and botanical products, as well as a cardiology practice and a retirement resort.

Oz has offered to divest much of that and resign his advisory posts, Warren noted with appreciation.

"Still, given your close ties to the industry that you would regulate, if you are confirmed, the public would have reason to question your impartiality and commitment to serving the public’s interest," she wrote.

Oz must fully divest from these conflicts and pledge not to use his position to enrich himself or his business associates, she said. This would exceed the legally required divestment.

She also called for Oz to commit to a four-year lobbying ban after leaving his post. 

Warren has been successful in getting information out of Trump's nominees; she pressed Secretary of Health and Human Services Robert F. Kennedy Jr. on his conflicts in a similar letter that led to his updating his ethics agreement and revealing further conflicts.

The letter is unlikely to affect Oz's chances of getting confirmed. Republicans control the Senate and have so far allowed even the most controversial of Trump's nominees to sail through the process.

The agency runs Medicare, the federal health insurance program for people aged 65 or older and the disabled, and oversees Medicaid, the state-based health insurance program for low-income people. The two programs provide health insurance for over 140 million people in the U.S.

It also runs the main program for income-based government-subsidized health insurance under the Affordable Care Act, also known as Obamacare.

Oz would take over at a time when Republicans are proposing deep cuts to Medicaid.

'DEEP TIES'

Oz serves as a managing member or advisor to several companies with a financial stake that are affected by the health benefits agency's policies on how much to reimburse hospitals and providers for medical services in Medicare and Medicaid and what services and medicines they cover, Warren wrote.

The letter detailed his past endorsements on his show, website, and social media of pharmaceutical products, such as Novo Nordisk's diabetes drug Ozempic. The drug will be subject to Medicare's drug price negotiations for 2027, a process he would oversee.

Warren also highlighted Oz's paid promotion of Medicare Advantage, a privately administered alternative to traditional Medicare, which has been accused of overcharging the government by billions of dollars.

Oz regularly promoted Medicare Advantage on his syndicated daytime television talk show, which aired between 2009 and 2022, in segments sponsored by a website selling the plans.

His financial interest in companies such as iHerb, a supplement retailer, and a patent for a circulatory valve repair device, could further create conflicts, Warren said.

The letter also pointed to Oz's stock ownership and advisory roles at Eko Health and SandboxAQ, both of which could have business before the agency, as well as his significant stock holdings in ShareCare, a digital health firm engaged in Medicare Advantage services. Oz has pledged to divest these stocks within 90 days after his confirmation.

Such ties could influence policy in ways that benefit these companies at the expense of taxpayers and patients, Warren warned.

 (Reporting by Ahmed Aboulenein; Editing by David Gregorio)