Fiscal footnote: big Senate gift to drugmaker
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WASHINGTON -- Just two weeks after pleading guilty in a major federal fraud case, Amgen, the world's largest biotechnology firm, scored a largely unnoticed coup on Capitol Hill: Lawmakers inserted a paragraph into the "fiscal cliff" bill that did not mention the company by name but strongly favored one of its drugs.
The language buried in Section 632 of the law delays a set of Medicare price restraints on a class of drugs that includes Sensipar, a lucrative Amgen pill used by kidney dialysis patients.
The provision gives Amgen an additional two years to sell Sensipar without government controls. The news was so welcome that the company's chief executive quickly relayed it to investment analysts. But it is projected to cost Medicare, and thus taxpayers, up to $500 million over that period.
Amgen, which has a small army of 74 lobbyists in the capital, was the only company to argue aggressively for the delay, according to several congressional aides of both parties. Supporters of the delay, primarily leaders of the Senate Finance Committee who have long benefited from Amgen's political largess, said it was necessary to allow federal regulators to prepare properly for the pricing change.
But critics, including several congressional aides who were stunned to find the measure in the final bill, pointed out that Amgen had already won a previous two-year delay, and they depicted a second one as an unnecessary giveaway.
"That is why we are in the trouble we are in," said Dennis Cotter, a health policy researcher who studies the cost and efficacy of dialysis drugs. "Everybody is carving out their own turf and getting it protected, and we pass the bill on to the taxpayer."
The provision's inclusion in the legislation to avert the tax increases and spending cuts that made up the so-called fiscal cliff shows the enduring power of special interests in Washington, even as Congress faces a critical test of its ability to balance the budget.
Amgen has deep financial and political ties to lawmakers like Senate Minority Leader Mitch McConnell, R-Ky., and Sens. Max Baucus, D-Mont., and Orrin Hatch, R-Utah, who hold heavy sway over Medicare payment policy as the leaders of the Finance Committee.
It also has worked hard to build close ties with the Obama administration, with its lobbyists showing up more than a dozen times since 2009 on logs of visits to the White House, although a company official said Saturday that it had not appealed to the administration during the debate over the fiscal legislation.
Aides to Mr. Hatch and Mr. Baucus, and a spokeswoman for Amgen, said the delay would give the Medicare system and medical providers the time they needed to accommodate other complicated changes in how federal reimbursements for kidney care were determined.
"Sometimes when you try to do too much and too quickly, you screw up," said Antonia Ferrier, a spokeswoman for Mr. Hatch. The goal, an Amgen spokeswoman said in a written statement, is "to ensure that quality of care is not compromised for dialysis patients."
But the measure runs counter to a five-year effort in Washington to control the enormous expense of dialysis for the Medicare program by reversing incentives to over-prescribe medication.
Amgen's success also shows that even a significant federal criminal investigation may pose little threat to a company's influence on Capitol Hill. On Dec. 19, as congressional negotiations over the fiscal bill reached a frenzy, Amgen pleaded guilty to marketing one of its anti-anemia drugs, Aranesp, illegally. It agreed to pay criminal and civil penalties totaling $762 million, a record settlement for a biotechnology company, according to the Justice Department.
Amgen, whose headquarters is near Los Angeles and which had $15.6 billion in revenue in 2011, has a deep bench of Washington lobbyists that includes Jeff Forbes, the former chief of staff to Mr. Baucus; Hunter Bates, the former chief of staff for Mr. McConnell; and Tony Podesta, whose fast-growing lobbying firm has unusually close ties to the White House.
Amgen's employees and political action committee have distributed nearly $5 million in contributions to political candidates and committees since 2007, including $67,750 to Mr. Baucus, the Finance Committee chairman, and $59,000 to Mr. Hatch, the committee's ranking Republican. They gave an additional $73,000 to Mr. McConnell, some of it at a fundraising event for him that it helped sponsor in December while the debate over the fiscal legislation was under way. More than $141,000 has also gone from Amgen employees to President Barack Obama's campaigns.
First Published January 20, 2013 12:00 am