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Dispensing With Lobbyists

While much of the biotechnology industry is gearing up for a potential health care battle next Congress, two companies have begun drawing down their political muscle.

Amgen Inc. and Hoffman-La Roche appear to have called a truce in their long-standing lobbying war over an anti-anemia treatment.

The catalyst: an October federal court decision in Amgen’s favor after Amgen, the largest biotech company in the world, sued Roche, claiming that it was planning to market one or more anti-anemia drugs that infringe on patents protecting Amgen’s drug, Epogen.

Yet the ramifications of the court decision are just starting to be felt on K Street.

Several current and former lobbyists for both companies, who declined to be named, acknowledged that the putting down of arms is largely because of the lawsuit.

Amgen’s financial problems have also contributed to its reduction of outside power brokers, according to lobbyists for the company.

Since 2007, Roche has terminated 10 outside lobbying contracts.

These include some of the biggest names in health care and patent law, including Jeffrey Kimbell, former executive director of the Medical Device Manufacturers Association; Edward Baxter, a lobbyist at Parry, Romani, DeConcini & Symms; and the Raben Group’s Robert Raben, a former assistant attorney general for legislative affairs.

Amgen has followed Roche’s lead, dropping 10 outside hired guns, including Mehlman Vogel Castagnetti Inc.’s Dean Rosen, who worked as former Senate Majority Leader Bill Frist’s (R-Tenn.) medical policy adviser; Jeff and Steve Ricchetti of Ricchetti Inc.; and David Jory and former Rep. Bill Brewster (D-Okla.) of Capitol Hill Consulting.

The Thousand Oaks, Calif.-company also recently stopped work with Quinn Gillespie & Associates on Medicare coverage and reimbursement issues.

The company acknowledges that it has been trimming the ranks.

“In response to Amgen’s business challenges in 2007, we reduced our operating expenses significantly and experienced a reduction in staff,” Amgen spokeswoman Kelley Davenport stated in an e-mail. “The reductions included termination of several lobbying consultants.”

A Roche spokeswoman, Darien Wilson, declined to give details of the company’s outside lobbying team.

“We do use outside resource based on our priorities and those may change from time to time,” she said.

The tit-for-tat run-up of lobbying talent began in 2005. At the time, Roche was making a feverish effort to change the patent laws on Capitol Hill and was nearly successful in its effort to get language inserted in an Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies bill.

“They were locked in this death battle,” one former Amgen lobbyist said. “Both took the hire everyone approach. … I remember going to a meeting and I was flabbergasted by the number of consultants in the room.”

More recently, Amgen lobbyists say they have noticed a change in the company: holding fewer meetings with every consultant in attendance and opting to hold conference calls instead, and using its outside lobbyists more strategically.

The shift in approach coincides with Amgen’s plummeting stock price. Since 2006, Amgen’s stock has fallen nearly half to $42.03 last week.

One of the major reasons for the company’s troubles has been the decline in anti-anemia drug sales.

Over the past two years, the company had been lobbying hard to try to limit the warning labels on its cancer treatment drugs.

But it was unsuccessful, and a March 2007 report by the FDA recommended that the warning labels on the drug limit recommended use only to patients with incurable cancers.

Despite the firings, Amgen continues to be a huge lobbying spender. Last year, its in-house lobbying spending of $16.62 million dwarfed Roche’s in-house team of $6.5 million.

David Beier, former chief domestic adviser for then-Vice President Al Gore, heads Amgen’s Washington legislative operation with Rodger Currie, formerly of the Pharmaceutical Research and Manufacturers of America, who is in charge of implementing strategy.

In the first three months of 2008, Amgen spent $2.52 million on in-house lobbying. And, it has kept on 35 outside lobbying firms, spending $1.59 million, according to lobbying disclosure reports.

Amgen’s Davenport says the company has matched its lobbying spending to legislative issues, including follow-on biologics, patent reform, and Medicare reimbursement.

Roche relies on Evan Morris, formerly of Patton Boggs, to head its in-house operation and 17 outside lobbying teams.

In the first quarter of 2008, Roche spent nearly $1.3 million in lobbying and $471,000 on outside consultants.

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