Earlier this month, the Times reported that the last-minute fiscal cliff deal passed by the Senate included a provision that would delay Medicare price controls on certain drugs used in kidney dialysis, including Sensipar. Most senators did not know about the earmark, which was apparently added by aides just before the final vote and will cost the federal government $500 million. Sensipar is made by Amgen. In addition to being the world’s largest biotechnology corporation, Amgen is also a campaign contributor to Senate Finance Committee chairman Max Baucus (D–MT,) Senate Minority Leader Mitch McConnell (R–KY) and Finance Committee member Orrin Hatch (R–UT.) The company’s registered lobbyists included former chiefs of staff for both Baucus and McConnell.
So A) guess what my column in the local newspaper will be about this week, and B) Amgen is dicks. In December, they pled guilty to fraudulent marketing practices and paid the Justice Department $762 million, the largest settlement ever from a biotech company. They are also involved in a multi-state effort to regulate so-called biosimilars, generic versions of drugs derived from biological processes rather than chemical fabrication.
Several state legislators have introduced bills limiting biosimilars, even though they have yet to actually enter the market. A paragraph from the Times is instructive here:
Dr. John O’Bannon III, a Republican delegate who introduced the bill that was passed last week in the Virginia House, said he did so because as a practicing neurologist, he was familiar with biologicals. Then he added, “The Amgen folks actually did come and talk to me.”
Before we go any further, you should know that my opinion on this issue is predicated on a controversial assumption: the purpose of the pharmaceutical industry is to produce medicine for sick people. That’s a philosophically biased way to look at it. The purpose of pharmaceutical companies might well be to make money—or, if you prefer, jobs—and drive the economy, with medicine for sick people being a nice by-product.
That’s how we look at a company like Apple; from a societal standpoint, we don’t need the iPods so much as the manufacturing jobs and robust capital (which we’re shipping to China and hoarding, respectively, but you understand what I mean.) I think pharmaceuticals are of a different order, though. We need the medicine, and the industry is a means to that end. The profit incentive is a good way to make that industry produce more and better drugs, but it’s not as if we as a society are in it for the money.
That makes Amgen’s behavior particularly ugly, even immoral. There are legitimate safety concerns about biosimilars, but mostly what they do is let generic drug makers put cheap medicine on the market. More and cheaper medicine is the whole point from a social-governmental perspective, but from Amgen’s perspective it’s a loss of market share. Ergo, they dispatch lobbyists to Congress and to state legislatures and turn their corporate strategy into law.
That’s good business from Amgen’s perspective. From a governmental perspective, however, it is a massive failure of representative democracy. During the white-knuckle negotiations that almost carried us over the fiscal cliff, no senator was looking for a way for Medicare to spend another half billion dollars. As chair of the Finance Committee, Baucus was charged with stewarding the fiscal health of the US government, and he threw it over to give one of his campaign donors a massive windfall. He got bought.
The state legislators introducing laws to regulate drugs they’ve never heard of are getting bought, too. Representatives from a corporation that makes medicine came to them with opinions regarding which medicines people should be able to get, and they went ahead and introduced them as potential laws. Any legislator with a modicum of conscience would hesitate to do that. Yet the contemporary political process is such that we do not consider it strange for a company to contribute to a legislator’s campaign, offer that legislator draft legislation and then see its own corporate policy proposed as law.
The voter is not necessary in this process, except as a sort of talent judge. We get to choose which candidates take office, and then their sponsors get to write laws. I had never heard of Amgen before last month, and I suspect you hadn’t, either. The fact that we do not know about a company influential enough to tap the Senate for $500 million and draft state laws governing the availability of medicine suggests how ineffectual the democracy has become in American representative democracy.