Consumer advocate Ralph Nader and former federal prosecutor Robert Fellmeth are calling on Attorney General Eric Holder to open a public corruption investigation into a $500 million windfall secured by Amgen on Capitol Hill last year.
Last week, the New York Times reported that buried in the fiscal cliff legislation was a provision that “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 Times reported. “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.”
In his letter to Holder, Fellmeth, a professor of law at the University of San Diego School of Law, said “while Congressional ‘pork’ to benefit a local business or serve local constituents is not uncommon in Washington D.C., an assessment to benefit a national corporation of up to $500 million over two years from a MediCare fund that already involves unprecedented unfunded liability for our children is rather exceptional.”
“Why would selected members of Congress spearhead such a measure? What were they told by Amgen? What were they promised? What have they received or will they receive?” Fellmeth asked.
“As a former Assistant U.S. Attorney, and the co-author of California White Collar Crime (Tower, 20011, 20013) and other publications in the field, I understand that federal bribery law requires a quid pro quo element.”
“But one cannot imagine why this proposal would be written and arranged for any other motive,” he wrote. “You will not learn of the promises made and the understandings reached without examining the staffs and principals involved. If there is a better example warranting a grand jury inquiry into Congressional corruption, where would it be?”
In a separate letter, Nader said he supported Fellmeth’s call for an investigation.
“I support Professor Robert Fellmeth’s request that you investigate the Amgen affair which resulted in passage of a $500 million bonanza,” Nader wrote. “This corporate maneuver was led by named legislators who received substantial contributions from Amgen. The intricacy of interactions by the parties and intermediaries are probative of an exchange, a deal that might cross the line from gift to payoff.”
In an editorial last week titled “Amgen Gets a Gift from Congress,” the New York Times said supporters of the deal — notably, Senator Max Baucus, a Democrat of Montana, who leads the Senate Finance Committee, and Orrin Hatch, of Utah, the ranking Republican on that committee — “say it is needed to give the Medicare system and dialysis providers time to absorb other complicated changes in federal reimbursements for kidney care.”
“But there is good reason to suspect other factors were involved as well,” the Times wrote. “Both senators have political and financial ties to Amgen, as does Mitch McConnell, the Senate minority leader, who exerted great influence over the fiscal negotiations and praised the Medicare provisions.”
“A top aide to Mr. Hatch, who was involved in negotiating the dialysis delay, previously worked as a health policy analyst for Amgen. The current lobbyists for Amgen include former chiefs of staff for both Mr. Baucus and Mr. McConnell. And the three senators have received substantial contributions from Amgen’s employees and its political action committee since 2007 — almost $68,000 to Senator Baucus, $59,000 to Senator Hatch, and $73,000 to Senator McConnell.”
“Amgen’s strong influence prevailed even though it had pleaded guilty just weeks ago to marketing an anti-anemia drug illegally and agreed to pay criminal and civil penalties of $762 million, a record settlement for a biotechnology company,” the Times said. “This dreadful episode is a classic example of the power of special interests to shape legislation and shows how hard it may be to carry out the reforms needed to cut health care costs.”