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Drugmakers Win Exemption in House Budget-Cutting Bill

"This provision will help protect a vulnerable patient population and help ensure they receive appropriate medical care," said Ed Sagebiel, a Lilly spokesman. He acknowledged that his company sought the provision, but he noted that other drug companies did so as well, as did mental health advocacy groups. "On behalf of the patients, I ask, why is that wrong?" he said.

The governors group warned that the cost differential between an older, established drug such as Prozac and a new entrant can be staggering, while the difference in utility is often marginal.

Moreover, no state could meet the requirement of proving that one drug is equivalent to another, because drugmakers' clinical trials compare their products with placebos, and scant evidence is available comparing one drug with another, said Stan Rosenstein, deputy director of California's Department of Health Services.

With more than 15 companies making mental health drugs, Lilly hardly has the market cornered, according to Sagebiel. Lilly does have six such medicines, including Prozac, which now has a generic alternative; Cymbalta, a newer antidepressant; Strattera, for attention-deficit (hyperactivity) disorder; Symbyax for bipolar depression; and Zyprexa for schizophrenia.

Lilly has been adept at using Washington for its own purposes, Ellis said. The company fought for years to extend the patents on Prozac and stave off a generic version. In 2002, it was at the center of a political firestorm over a provision, slipped into the giant law that created the Department of Homeland Security, that shielded vaccine makers from lawsuits by families of autistic children.

And it was Lilly's home-state congressman, Buyer, who got the amendment on mental health drugs through the House.

Lilly's headquarters are located in downtown Indianapolis, which falls within the congressional district of Rep. Julia Carson (D). But many of Lilly's employees live in Buyer's suburban Indianapolis district, and -- unlike Carson -- Buyer is a member of the committee with jurisdiction over Medicaid.

Lilly has been the biggest corporate contributor to Buyer's campaigns. Since 1989, the drug company has donated $46,500 to Buyer's congressional campaigns, according to the Center for Responsive Politics.

Mike Copher, Buyer's chief of staff, said Buyer's interest in the matter stemmed not from his district's proximity to Lilly but from his work as chairman of the Veterans' Affairs Committee and his former position on the House Armed Services subcommittee on military personnel.

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