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As Congressman Works to Repeal Amgen Medicare Drug Exemption, Lobbyists Face Scrutiny

As Congressman Works to Repeal Amgen Medicare Drug Exemption, Lobbyists Face scrutiny [Ventura County Star, Calif.]

From Ventura County Star (CA) (January 29, 2013)

Jan. 28--WASHINGTON -- Amgen Inc. argues that language buried deep in a new federal law is essential to guaranteeing that kidney dialysis patients have access to lifesaving drugs.

But critics say the provision in question represents the worst of Washington, where lobbyists working behind the scenes successfully persuade lawmakers to give a huge break to a politically connected company and taxpayers get stuck with a $500 million bill.

"This 11th-hour backroom deal confirms the American public’s worst suspicions of how Congress operates. ... It’s no wonder cockroaches and root canals are more popular than Congress," said Rep. Peter Welch. D-Vt.

Welch is leading a campaign to get Congress to repeal part of a federal law enacted this month that exempts a class of drugs from Medicare price controls for two years. The language was inserted at the last minute into a bill that was passed to help the country avert the so-called fiscal cliff.

While the exemption applies to a number of oral-only drugs, Amgen was the only drug manufacturer that lobbied to get the language inserted into the fiscal cliff bill, according to a report in The New York Times. One of Amgen’s drugs, Sensipar, is used by kidney dialysis patients and would be included in the delay.

Amgen, which is based in Thousand Oaks, said in a statement that it supported efforts to delay including oral-only medications related to kidney dialysis in the Medicare price controls until the government and providers were ready for the change and could ensure that patients would have access to the drugs.

"Dialysis patients are among our nation’s most chronically ill, and it is important that their quality of care not be comprised," the company said.

Medicare must by law pay a bundled rate for kidney dialysis and related drugs. Certain drugs, including Sensipar, were supposed to have fallen under the price control system in 2011, but Congress gave Amgen and other drug manufacturers a two-year exemption. That exemption was to have expired in 2014. The language in the fiscal cliff bill provided another two-year reprieve, meaning Sensipar will not come under the price controls until 2016.

Welch, who has filed legislation to repeal that part of the fiscal cliff bill, and other critics in Congress are bothered by the fact that the exemption will cost taxpayers $500 million and by how the deal unfolded.

Amgen employs 74 lobbyists, including some who once worked for top lawmakers on the Senate Finance Committee, which has an influential role in determining how Medicare payments are made. What’s more, the language was inserted into the bill at the last minute by someone in the Senate, although no one is certain who put it there. By the time it was discovered, hours before the final vote, lawmakers had no way to challenge the provision because the fiscal cliff bill required an up-or-down vote.

"Without scrutiny or debate, the American taxpayer was stuck with the $500 million tab," Welch said. "This special interest provision should have stood on its own merits with an up-or-down vote."

Rep. Jim Cooper, a Tennessee Democrat who is co-sponsoring Welch’s legislation to repeal the exemption, said he was "disgusted but not surprised" to read about what he called "this $500 million gift to lobbyists at taxpayer expense, which was disguised and buried in a bill without anyone’s knowledge."

"Congress should work to represent the national interest, not special interests," Cooper said.

Craig Holman of the government watchdog group Public Citizen said the extension Amgen got "is really a classic exemption that special interest was able to carve out of the fiscal cliff bill."

"There are others," Holman said, "but this one is classic in the sense that Amgen employs all of the traditional, classic techniques for influence peddling and gaining special favors. Not only do they spend a fortune on lobbying, they’ve got a team of something like 70 lobbyists who are on the Hill working every day. They employ the revolving-door strategy, where you not only hire staff or members of Congress to become your lobbyist, but you also use the reverse revolving door, where you place some of your corporate executives into the agencies that oversee your business. Amgen, for instance, has hired at least 14 congressional staff onto their lobbying team."

In a twist, the drug exemption was added to the fiscal cliff bill, which was supposed to eliminate unnecessary spending and reduce the deficit. Yet, "Here we have the same kind of deficit-increasing spending provision being secretly inserted into the same bill," Holman said. "I find that so ironic."

Rep. Lois Capps, D-Santa Barbara, said she is reviewing Welch’s legislation but that reimbursing hospitals, pharmaceutical companies and other entities for treating Medicare beneficiaries is a complex issue.

"The key is to strike the right balance between ensuring we restrain the growth of health care costs and maintaining access to treatments and the highest level of care," she said.

Rep. Julia Brownley, D-Oak Park, also is reviewing Welch’s legislation to repeal the exemption, an aide said.


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Posted: January 2013