Congress didn't just head off the fiscal cliff with its compromise bill. It rescued Amgen ($AMGN) from Medicare price restraints on Sensipar, an oral treatment for kidney patients, at least temporarily.
As The New York Times reports, lawmakers postponed new pricing rules for pills used by patients on dialysis. Because most drugs for end-stage renal disease are injectable, that's a small group of products--a group dominated by Sensipar.
Amgen lobbied aggressively for the proviso, which amounted to one paragraph inserted into the fiscal cliff bill. And, the NYT reports, the company is a big donor for several of the lawmakers who backed the delay, including senators Mitch McConnell (R-KY), Max Baucus (D-MT) and Orrin Hatch (R-UT).
The pricing change affects Medicare's shift to "bundled" payments for dialysis patients, in which services and drugs are reimbursed together. Previously, providers could bill separately for drugs, opening up opportunity for profits on each dose. Critics said that approach incentivized overuse of the drugs--including Amgen's Epogen--which are considered risky at higher doses.
The new pricing system is already in effect for Epogen and similar meds. Congress made Sensipar and its oral rivals the exception to that rule until 2014. The new law extends that exception for another two years. Lawmakers defended the change, saying that it protects patients from underuse and undertreatment.
The NYT piece goes on to detail Amgen's lobbying efforts, including campaign donations, visits to the White House, and financial backing for influential political organizations. And it points out that the Sensipar-friendly exception made its way into the fiscal cliff bill just weeks after Amgen announced its $762 million settlement with the Justice Department, which included a $100 million-plus criminal penalty for mismarketing the anemia drug Aranesp, a sister drug to Epogen.
- read the NYT piece (sub. req.)