SEC subpoenas Obama-linked firm that sells Obamacare information to corporations

Patrick Howley | Political Reporter

The Securities and Exchange Commission (SEC) has issued subpoenas to the Marwood Group, the New York and Washington-based health care advisory firm that employs a former top Obama administration health official and coaches its corporate clients on how to profit from Obamacare.

The SEC subpoenaed emails and other documents this month relating to a tip the Marwood Group gave to clients in 2010 that the FDA planned to delay its approval of a new diabetes drug.

One of Marwood’s clients, the hedge fund HealthCor, bet that the drug’s parent company would experience a stock drop. HealthCor was right. The SEC now wants to figure out if insider trading took place.

The Daily Caller first reported in December on the Marwood Group’s tactics. The group obtains highly exclusive information from inside the federal government — often relating to regulatory decision-making — and charges health care companies and private equity investors for that information. (RELATED: Ethics complaint filed concerning advisory firm)

The company, which is run by Ted Kennedy Jr. and counts Robert Kennedy Jr. as a senior adviser, has 60 health care-focused corporations and 135 private equity firms, lenders, and venture capital firms as clients.

The Marwood Group employs Dr. Barry Straube, former chief medical officer of the Center for Medicare and Medicaid Services (CMS) in the Obama administration and one of the key officials involved in the implementation of Obamacare.

Straube, whose office oversaw all “Medicare coverage decision-making” in the United States under Obama, spoke on behalf of the Marwood Group at a “middle market dealmaking” conference in New York in 2012, where he explained to an audience of private-sector professionals how to profit off of Obamacare, based on his personal experience in the Obama administration.

“I was at CMS at the time the Affordable Care Act passed and we started working on implementation of that immediately,” Straube told the crowd.

He went on to make a number of suggestions on how to best profit off Obamacare, explaining that hospitals will have to change in response to a “broader governing structure” put in place by the Obama administration.

Straube explained that there are “great opportunities” for private-sector profit in pharmacy and medical device arenas, but that the evidence base on medical devices and pharmacology interventions needs to be “flipped” in order to convince federal government decision-makers of their worthiness.

Straube also said that the evidence base on “accountable care organizations,” or “ACOs” — an ambitious new program created by Obamacare — needs to be “flipped.”

“On pharmacy and medical device arenas, I think that there are great  opportunities in these areas, but like the hospitals and other people and ACOs  we’ll have to flip the salesmanship, I think, and/or the evidence base for  medical devices and pharmacology interventions to show how they not only make a  person get better quickly on an acute care episode but how they can keep people well for a long period of time, avoid further medical care, and keep them out of  high-cost acute care settings,” Straube said.

The Marwood Group’s tactics have generated concern in the past. A former CMS analyst previously filed an ethics complaint about the Marwood Group to the Office of Inspector General at the Department of Health and Human Services, after the Marwood Group set up an intense meeting between high-level CMS staffers and five Wall Street professionals.

“They [the Wall Street professionals] got to probe us for hours in private about what we planned to do and how  we approached procedures for reimbursing medical devices, the mechanics and  psychology of CMS decision-making, in general and with respect to these specific  devices,” the CMS whistleblower told the Project on Government Oversight in 2011.

Despite the pending subpoena, no “political intelligence” firm at this point has ever been charged with insider trading.

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