Baucus/Hatch taxpayer gift to Amgen
Fiscal Footnote: Big Senate Gift to Drug Maker
By Eric Lipton and Kevin Sack
The New York Times, January 19, 2013
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 up to $500 million over that period.
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 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.
Amgen has deep financial and political ties to lawmakers like Senate Minority Leader Mitch McConnell, Republican of Kentucky, and Senators Max Baucus, Democrat of Montana, and Orrin G. Hatch, Republican of Utah, who hold heavy sway over Medicare payment policy as the leaders of the Finance Committee.
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.
In some cases, the company’s former employees have found important posts inside the Capitol. They include Dan Todd, one of Mr. Hatch’s top Finance Committee staff members on health and Medicare policy, who worked as a health policy analyst for Amgen’s government affairs office from 2005 to 2009. Mr. Todd, who joined Mr. Hatch’s staff in 2011, was directly involved in negotiating the dialysis components of the fiscal bill, and he met with “all the stakeholders,” Mr. Hatch’s spokeswoman said, not disputing when asked that this included Amgen lobbyists.
Aides to the senators said some heavy donors had won and others had lost in the Medicare negotiations — proof that the legislative outcome was based on the merits. “What is the best policy for Montanans and people across the country lies at the heart of every decision Chairman Baucus makes,” said Meaghan Smith, a spokeswoman for Mr. Baucus. “It’s as simple as that.”
By Don McCanne, MD
With appropriate anger, we can point our fingers toward Sen. Baucus and his colleagues for their involvement in this corrupt half billion dollar taxpayer gift to Amgen, a biotechnology company that has already paid over three-quarters of a billion dollars in penalties for prior criminal acts to which they pled guilty. Sen. Baucus especially deserves our ire since he led the process in bringing us the Affordable Care Act - an act that was designed specifically to serve the financial interests of the private insurance and pharmaceutical industries, at a consequential cost to patients and taxpayers.
Of course, Sen. Baucus is not alone in accepting payment in exchange for favorable legislation. All members of Congress have fundraising challenges. If you check OpenSecrets.org, you will find that most members of Congress are tainted, though they vary in their egregiousness.
Who is ultimately to blame? We elect these people. Health care justice doesn't stand a chance when displaced by the power of greed and corruption, and we simply turn our backs on it.