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Amgen boosts capital lobbying

The company spends more to state its case as federal actions cut sales.

August 17, 2007|Daniel Costello | Times Staff Writer

WASHINGTON — Over the last two decades, Thousand Oaks-based Amgen Inc. has built a pharmaceutical powerhouse with sought-after drugs, scientific prowess and shrewd marketing.

Now, it's seeking something else: more clout in Washington.

Political affairs have taken on a new urgency at Amgen of late, as Congress and federal regulators have increased scrutiny of the company's products. Sales of its top-selling anemia drug have plummeted; profit has languished.

And on Wednesday, the company announced it planned to lay off at least 12% of its 20,000 employees as a result. Also, it acknowledged that more cuts could occur.

Perhaps just as important to the biotech giant's financial future -- but far less visible -- may be its expensive effort to shore up its profile in the nation's capital, where federal health and Medicare officials have dealt severe blows to Amgen this year.

For The Record
Los Angeles Times Thursday, August 23, 2007 Home Edition Main News Part Page Metro Desk 1 inches; 48 words Type of Material: Correction
Amgen: An article in Friday's Business section about Amgen Inc.'s increased lobbying effort in Washington misstated that lobbyist Tony Podesta of the Podesta Group was the former Clinton administration chief of staff. John Podesta, who founded the firm but is no longer on staff, served under President Clinton.

Amgen's efforts are really no surprise, company spokesman David Polk said Thursday. While declining to spell out the extent of Amgen's lobbying or its agenda, Polk characterized its increased Washington presence as being little different from that of any other drug company.

"Because we operate in a highly regulated industry influenced by Congress and regulatory agencies, Amgen has established a presence in Washington, D.C., in an effort to effectively shape healthcare policy and ensure patient safety and patient access to products," he said.

The company recently doubled the amount it spends annually on lobbyists to $10.2 million and has handed out scores of political contributions. This summer, it held a fundraiser at its Ventura County headquarters for House Speaker Nancy Pelosi (D-San Francisco).

Amgen now has more than two dozen politically connected lobbyists and consultants on the payroll. They include recently departed top Pelosi staffer George Crawford, former Clinton White House Chief of Staff Tony Podesta and a former GOP staffer for the House Ways and Means Committee who was a principal architect of the Medicare drug benefit program.

Amgen's invigorated political effort has catapulted it into second place behind Pfizer Inc., the world's largest drug maker, on the list of the pharmaceutical industry's biggest contributors to federal candidates and parties. Amgen was in 12th place five years ago, according to federal disclosure reports.

"They've certainly hired everyone they can get their hands on," said Rep. Pete Stark (D-Fremont), who has criticized what he says has been vast over-prescribing of Amgen's anemia medications across the country.

Key Amgen representatives met last week with top aides to Health and Human Services Secretary Mike Leavitt to personally seek his help with Amgen's appeal of an Aug. 1 decision that would severally restrict Medicare payments for two of Amgen's top-selling anemia drugs. Leavitt's department oversees Medicare.

Leavitt will not get involved in the appeal, however, because his office has concluded that Medicare's decision was based on broad research and strongly backed by agency scientists, according to a person familiar with the matter.

Amgen's Epogen and Aranesp treat anemia in nearly a million cancer and dialysis patients, and they contributed to nearly half of Amgen's $14.3 billion in revenue last year. The medicines remain Medicare's single biggest medication expense.

Amgen faces several big political and regulatory challenges.

Under new spartan guidelines, Medicare wants to sharply reduce the dosages of Amgen's anemia drugs it pays for.

And next month, a Food and Drug Administration committee will meet to consider further restrictions to the drugs' labels beyond new ones added last spring.

Another challenge is a move by several members of Congress, including Stark, to make generic substitutes to biotech drugs available. Such a law could make biotech drugs much less profitable for companies like Amgen.

"The American taxpayer funds a lot of Amgen's bottom line, and they should be able to make sure they aren't wasting their money," Stark said.

As the company's courting of Pelosi and other Democratic lawmakers indicates, it is adjusting to new political realities after years of associating mostly with Republicans, who until recently controlled both Congress and the White House.

Amgen's lobbying roster is now nearly evenly split among firms associated with both major parties and its share of political donations to Democrats has nearly doubled to 37% last year from 21% in 2002, according to an analysis by the Center for Responsive Politics.

Gail Wilensky, a former Medicare chief in the early 1990s, said it was too soon to tell how much Amgen's efforts and wallet were going to pay off in Washington -- at least in the short term.

The likelihood that the company would succeed in overturning the recent Medicare decision, for instance, is slim, she said. Although it has happened in some instances over the years, she said, it was unlikely in the instance of the anemia treatments, especially in light of the FDA's recent changes to the drugs' labels.

"They appear to have gone through much of the process at this point," she said.

Meanwhile, the company continued its efforts to inform employees about the layoffs announced Wednesday and to ease anxieties where possible.

Amgen employees received a video Thursday morning detailing outlines of the company's restructuring plan. There still has been no announcement spelling out where the cuts would occur or how many of the 8,600 employees at its Thousand Oaks headquarters would be affected.


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