Extortion During the Fiscal Cliff Deal

Amgen corporate welfare

(By The Pragmatic Pundit)

This story first appeared in the New York Times on January 19 and because everyone isn’t angry, I have to believe you missed it, so I’m telling it again.

Since the 2010 elections, Democrats and Republicans have fought over taxes, spending, the deficit and the future of programs like Social Security, Medicare and Medicaid. The debates have played out against the background of a deep recession, anemic economic recovery and high unemployment; threatened to take us over a fiscal cliff and plunge us into another recession.  As Congress bemoans the deficit, claims a desire to balance the budget by slashing Medicare benefits,  Sens. Mitch McConnell (R-Ky.), Max Baucus (D-Mont.), and Orrin Hatch (R-Utah.), who hold heavy sway over Medicare payment policy as the leaders of the Finance Committee, were handing out $500 million in corporate welfare to a pharmaceutical company called Amgen.

And Taxpayers will have to foot the bill!

The fleecing of taxpayers took place just two weeks after the biotech giant pled guilt in a major federal fraud case for  illegally introducing a drug into interstate commerce that the FDA declined to approve.  The company paid a record settlement of $762 million to resolve criminal and civil liability.

According to the New York Times, during the final write-up of the fiscal cliff agreement, the Senators inserted a provision requested by Amgen into the “fiscal cliff” bill that strongly favored one of its drugs.  Language in Section 632 of the law delays a set of Medicare price restraints on a lucrative Amgen pill used by kidney dialysis patients.  The provision gives Amgen an “additional” two years to sell the drug without government controls at a projected cost to Medicare of up to $500 million.

 “Many lobbyists and Congressional aides said they first learned of the language when the final bill was posted publicly, only hours before being approved…At this point, opponents had no way to challenge the provision, as there was a single vote on the entire fiscal package…”

“That is why we are in the trouble we are in,” said Dennis J. 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.”

Medicare covers most costs associated with treating severe renal disease, and the dialysis market continues to grow steadily.  The Senators inserted the preference despite a new report by the Government Accountability Office that found Medicare had overpaid for dialysis by up to $880 million in 2011.

A spokeswoman for Senator Baucus said:

“What is the best policy for Montanans and people across the country lies at the heart of every decision Chairman Baucus makes…It’s as simple as that.”

We need to support Rep. Peter Welch (D-Vt.), who introduced a bill on Jan. 23 to repeal the provision favoring Amgen, and Former Sen. Russ Feingold’s (D-Wis.), whose non-profit group, Progressives United, has also launched a petition calling for Amgen to give back the $500 million.

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