Enacting the law that kept the nation from going over the fiscal cliff, lawmakers on both sides of the aisle gave a $500 million gift to Amigen and other drug companies, by inserting an unrelated provision into the bill. They delayed by two years Medicare price restraints on certain oral drugs utilized by kidney dialysis patients that will wind up costing the government approximately a half billion dollars it would have reaped in savings.
This “corporate welfare” provision was shepherded through the Senate by Orrin Hatch of Utah, the ranking Republican on the Finance Committee and Democrat Max Baucus of Montana, head of the Finance Committee, helped by Senate Minority Leader Mitch McConnell. All of these Senators received tens of thousands of dollars in contributions from Amgen employees, lobbyists and political action committees in the last five years. Amigen has a contingent of 74 lobbyists in Washington and has strong connections to the above named senators. In addition to its financial contributions, Amgen’s lobbyists include McConnell and Baucus’s former chiefs of staff.
Originally, the delay in price restraints was to be in place until 2014, but the recent bill increased the delay until 2016 with no substantial rationale. Aides to the senators and a spokesperson for Amgen claimed the delay was necessary to grant Medicare and providers adequate time to adjust to other complicated provisions that determine Medicare reimbursement for dialysis, a blatantly fictitious explanation.
How can citizens believe that politicians are serious about cutting the national debt when this type of giveaway occurs, supported by members of both parties. And of particular interest in this story is the fact that just weeks prior to Amigen’s receiving this largesse from Congress, the company had pleaded guilty to illegal marketing of a drug that combats anemia in dialysis patients. With the plea, Amgen agreed to pay $762 million in criminal and civil penalties, the largest settlement ever for a biotechnology firm.
Unfortunately, this type of action occurs all too frequently within a Congress that has said it wants to do away with pork and earmarks, and that the national debt must be reduced. It is seen with pressure on the Pentagon by members of Congress to accept weapons systems that are unwanted,
and in unnecessary subsidies to corporate farmers who do quite well without the extra government support. The carried interest of hedge funds and private equity groups that are taxed as capital gains rather than income is another example of corporate welfare aiding a special interest group at the expense of the majority of citizens.
Conservatives in Congress are anxious to cut Medicare and Social Security benefits to seniors and discretionary spending needed for education, infrastructure, research and development, and so forth, in order to reduce budget deficits and the national debt. Before they take an ax to
government spending, however, it would be worthwhile eliminating all of the corporate welfare programs and see how much savings that generates. There is more than a little hypocrisy in the politicians of both parties who sponsor or acquiesce to these special corporate “breaks” and call themselves fiscal conservatives.
em>A VietNam vet and a Columbia history major who became a medical doctor, Bob Levine has watched the evolution of American politics over the past 40 years with increasing alarm. He knows he’s not alone. Partisan grid-lock, massive cash contributions and even more massive expenditures on lobbyists have undermined real democracy, and there is more than just a whiff of corruption emanating from Washington. If the nation is to overcome lockstep partisanship, restore growth to the economy and bring its debt under control, Levine argues that it will require a strong centrist third party to bring about the necessary reforms. Levine’s previous book, Shock Therapy For the American Health Care System took a realist approach to health care from a physician’s informed point of view; Resurrecting Democracy takes a similar pragmatic approach, putting aside ideology and taking a hard look at facts on the ground. In his latest book, Levine shines a light that cuts through the miasma of party propaganda and reactionary thinking, and reveals a new path for American politics. This post is cross posted from his blog.