Sometimes Republicans and Democrats Agree -- Like on Lining Amgen's Pockets

Here is an old-fashioned episode of horse trading that suggests the nation’s capital is conducting business as usual, despite concerns about healthcare costs and federal deficits. Last month, language in the so-called fiscal cliff bill allows a delay to Medicare price restraints on a group of medications that will benefit one company, in particular. And that company also contributed generously to several US Senators who influenced the language.

Specifically, the bill gives Amgen (AMGN) an extra two years to sell Sensipar, a pill that is used for kidney dialysis and generated $808 million in sales in 2011, without any government controls, The New York Times reported. However, the move is expected to cost Medicare up to $500 million during that time period.

How was this justified? Those who backed the delay say it was necessary to allow regulators to prepare for a pricing change. They included Senate Minority Leader Mitch McConnell, a Kentucky Republican; Montana Democrat Max Baucus and Utah Republican Orrin Hatch, who lead the Senate Finance Committee, the Times writes, adding that Amgen has contributed substantially to their coffers.

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How much? Since 2007, Amgen employee and political action committee gave $67,750 to Baucus, $59,000 to Hatch and $73,000 to McConnell, some of which was contributed at a fund-raising event that the biotech co-sponsored last month while the debate over the legislation was under way, according to the paper. Amgen has also contributed generously to political action committees controlled or sponsored by Hatch and Baucus.

And Dan Todd, who worked as a health policy analyst for Amgen in its government affairs office from 2005 to 2009, became a top Hatch aide in 2011 on the Finance Committee on health and Medicare policy, the Times writes, adding that he was “directly involved in negotiating the dialysis components of the fiscal bill.” The paper also quotes a Hatch spokeswoman saying that Todd met with “all the stakeholders,” including Amgen lobbyists.

Meanwhile, the paper writes that several Congressional aides were stunned to find the measure in the fiscal bill, and noted Amgen had won a previous two-year delay. In 2008, Medicare was required to pay a single, bundled rate for a dialysis treatment and related drugs starting in 2011, but a provision postponed the inclusion of certain oral medications, such as Sensipar. As the Times notes, this meant Sensipar demand would not wane until 2014.

To read the remainder of this article, go to Pharmalot.

Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at editor@ycharts.com.

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