Many of you know I spent a great portion of my life in the dialysis arena.  From the time I was eight years old, I wanted to develop an artificial kidney.  So, I’ve seen a lifetime- and then some- of changes to the therapy.  From the first “washing machine” devices, to flat-plates that required soaking-spreading-tightening, to the disposable devices of today.

One of the big changes to the patient’s well-being, though, wasn’t a machine.  It emanated from another area of my training, biochemical engineering; the development of erythropoietin (EPO), a hormone that controls red blood cell synthesis.  Before the development and administration of EPO, it was not unusual for dialysis patients to have hemoglobin levels of 8 or 9, rather than the 14 or 15 that was normal.

And, in 1983, the US government passed one of the first benefits to Amgen, the initial developer of EPO.  The Orphan Drug Act- to provide special protection incentives for drugs that would treat rare medical conditions.  An act that I and many of my friends (researchers and medical executives, almost to a one) felt was at best a mixed blessing.  We knew that the drugs that would get this special treatment, needed to treat less than 50,000 patients- which was changed in very short order to read 200,000 patients- would end up letting these drugs get special protection (7 year market exclusivity, longer patent protection, tax incentives, relaxed clinical testing requirements, among them) and developing into markets that would greatly exceed these numerical limitations.  In other words, a benefit for something they no longer were.

Which is exactly what happened with EPO.  Besides its use in dialysis, it is prevalent as an additional therapy for patients undergoing chemotherapy (and, not even mentioning its illegal usage by athletes, such as Lance Armstrong).  The market size will be about $ 275 million in a year or so.  Orphan drug, huh?

But, that is only part of the problem with how our Congress provides largesse to companies like Amgen.  Like they did on 1 January 2013.

You see that fiscal cliff bill- the one that “solved’ the tax dilemma for 98% of Americans- it had what I call a poison pill inserted.  Because Amgen plies the halls of Congress with its lobbyists (about 75 in DC alone)- and supports many of their re-election campaigns, it got a special insertion in that bill.

Amgen will be able to avoid the Medicare cost-controls on a class of drugs that includes Sensipar (cinacalcet).  It is a calcimimetric agent, capable of rendering calcium-sensing receptors more receptive to extracellular calcium; ok, too technical- it really mean that it treats secondary hyperparathyroidism, a condition that is prevalent in dialysis patients.

How much help did this give Amgen?  Oh, not much.   About ½ billion dollars over the next two years.  Which you and I will pay to support Medicare for those costs. Because this drug was to be covered by the new method of reimbursing (i.e., paying for) dialysis costs, which are changing from a per-treatment methodology to a bundled cost methodology.   This program began in 2008- to change to a single bundled rate to cover therapy AND medications, to incent the dialysis providers to keep their patients from developing acute symptoms that would require hospitalization.   Like other Medicare programs coming on-line that want the patient treated as a patient- and not as an episode.

I don’t have exact proof of who did this deed, but you can bet that Senators Baucus (D, MT) and Hatch (R, UT) were involved- because they head the Senate Finance Committee and were primary supporters of such a delay.  Oh, they’ll tell you this 2 year delay was critical.  But, they won’t tell you they have political and financial ties to Amgen.

(Should I mention that Amgen had just pled guilty to illegal marketing of its anti-anemia drug (Aranesp), and is to pay $ 762 million in penalties?  Oh, I just did.  And, who is paying these penalties- US.  With its special two year exception they were just awarded.)

Yup.  Clean bills.  No pork.  That’s the claim- now you see the fine print- circled and highlighted for open viewing.

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