How A Pharma Giant Used The ‘Fiscal Cliff’ Deal To Profit At The Expense Of Elderly Americans

Amgen Inc. — one of America’s largest biotech and pharmaceutical companies — has had a rough couple of months. In December, the firm was fined $762 million for illegally promoting drugs and defrauding Medicare. And now lawmakers from both sides of the aisle are looking to undo a little-noticed provision that Amgen successfully lobbied for inclusion in the recent “fiscal cliff” deal, a measure that gives special regulatory treatment to one of the company’s most profitable drugs.

The “fiscal cliff” deal included a provision exempting the oral drugs for kidney dialysis patients from being subject to Medicare price controls for two years. That means that drugs in that class, including Amgen’s hugely profitable Sensipar, can be sold to Medicare at higher prices than other dialysis drugs with little oversight — which ends up raising the drug’s cost for the seniors in the program. While the exemption is broad enough to affect drug companies other than Amgen, the New York Times reported this week that Amgen lobbied intensely for the provision, and that supporters like Sen. Max Baucus (D-MT) and Senate Minority Leader Mitch McConnell (R-KY) have received substantial political donations from Amgen’s employees and lobbying outfits.

As Rep. Peter Welch (D-VT), who introduced the measure to repeal Amgen’s exemption this week, told the LA Times, “Amgen managed to get a $500-million paragraph in the fiscal-cliff bill and virtually no one in Congress was aware of it. It’s a taxpayer ripoff and comes at a really bad time when we’re trying to control healthcare costs. Amgen should not be allowed to turn Medicare into a profit center.”

It’s no mystery why Amgen wanted the exemption so badly — just last year, sales of Sensipar ballooned by 18 percent to $950 million. But the fact that they successfully wedged it into the fiscal cliff compromise is a testament to the firm’s lobbying prowess and the outsized influence of the entire pharmaceutical industry.