U.S. Rep. Peter Welch (D-VA) was on Moyers and Company on Friday to discuss a loophole written into the fiscal cliff deal that allows a major biotechnology company to avoid cost controls on certain Medicare drugs — which amounts to a half a billion dollar tax break.
The New York Times found that three senators who supported the loophole had “deep financial and political ties” to Amgen, the corporation which was not mentioned by name in the loophole but which will save hundreds of millions of dollars as a result.
Welch has introduced legislation to repeal that loophole, both to get the money back to taxpayers but also because, as he says, “Congress is not trusted as an institution.”
Welch himself said he did not even know about the loophole until the Times article was published.
Even worse, Welch went on, is that Amgen recent paid $700 million in criminal and civic penalties for illegally marketing one of its drugs. “So the effect of this is largely that taxpayers are picking up $500 million of the $700 million fine,” he said.
The loophole snuck by because the fiscal cliff deal was debated and passed during a lame duck session and went through no committee process. It will not be easy to repeal, he said: “And the challenge for us will be to get that on the floor. The Republicans are the majority. They have the authority to say yes or no as to whether this will get on the floor. So the challenge for us will be to advocate this and essentially correct a mistake.”
The Times article pointed to three senators — Republicans Mitch McConnell and Orrin Hatch, along with Democrat Mac Baucus — with strong ties to Amgen who were involved in the loophole deal. Welch believes that tea praters in the House would support repeal, because “a lot of the Tea Party folks are ferociously concerned about spending. And they especially hate the crony capitalism type of spending. In these giveaways to private companies for private gain. I mean, the Amgen CEO in 2010 made $21 million. It’s a $17 billion company in sales.”
“What Amgen did now is legal,” Welch said later. “Should it be? Is it ethical? Is it the right thing for the country? Absolutely not. But they literally accomplished in the back room, with their access to important people, what they could never have accomplished on the floor of the House or on the floor of the Senate.”
Watch the video, via billmoyers.com, below.