Pelosi Won't Divest Drug Stock, Dismisses Conflict Claim

Fred Lucas | Staff Writer | Friday, March 7, 2008

Pelosi Won't Divest Drug Stock, Dismisses Conflict Claim

Washington ( - House Speaker Nancy Pelosi (D-Calif.) dismissed any notions Thursday that her sponsorship of Medicaid legislation that would likely help her husband's financial holdings in a pharmaceutical company presented a conflict of interest.

She also stressed there was no need to divest any stock that her husband holds in Johnson Johnson, a company that makes and markets HIV-related drugs that could be helped by the Early Treatment of HIV Act, which Pelosi introduced last summer.

"Absolutely not," Pelosi said Thursday when asked if she would consider divesting.

"My first speech on the floor of the House in 1987, over 20 years ago, was on the subject of HIV/AIDS," she said. "My work in Congress has had this as a priority. I would no more do that than I would say my support for broadband means I have to divest from any technology stock I have, let alone my interest in preserving the planet means I would have to divest in green technology."

Pelosi's husband owns between $250,000 and $500,000 stock in Johnson Johnson, the company that markets the anemia drug Procrit used by HIV patients and others with anemia. Procrit is manufactured by Amgen, a pharmaceutical firm based in Thousand Oaks, Calif.

On July 27, 2007, 28 Amgen executives contributed more than $20,000 to Pelosi's re-election campaign. See Previous Story

On July 30, the Center for Medicare and Medicaid Services announced it would tighten the rules on paying for anemia drugs such as Procrit.

On Aug. 2, Pelosi introduced the HIV bill that would give states the option to allow patients who are HIV-positive, but do not have AIDS, to qualify for Medicaid coverage earlier in the course of the virus. Currently, Medicaid coverage doesn't kick in until a patient develops AIDS.

Most state Medicaid systems, including those in California, New York, and New Jersey, cover Procrit now. The Early Treatment of HIV Act, if passed, would expand the number of people eligible for Medicaid coverage for the drug. The legislation has more than 50 co-sponsors, including some Republicans.

In addition to the 28 separate contributions Pelosi received last July from Amgen employees, seven other contributions were made by executives in the months of July and August, for a total of $30,050 to Pelosi's re-election campaign.

Also, Amgen's political action committee gave Pelosi's campaign a total of $10,000 last year.

Employees of the company had not previously contributed such large amounts to Pelosi's campaign, according to the Center for Responsive Politics, which tracks campaign contributions going back to 1992.

This has prompted some public interest groups to allege a conflict of interest given Pelosi's potential financial benefit from the legislation.

"The proper thing for her to do would be to return the funds raised and sell whatever stock she has," Ken Boehm, chairman of the National Legal Policy Center, a conservative government watchdog group, said in an interview. "If it's good legislation, why not do it with clean hands."

Boehm referenced Pelosi's examples of divesting her stock in technology firms or environmental firms because she supports broadband and a clean environment.

"I'll take her up on that and say yes," he said. "The distinction is this is legislation that particularly helps a business she is invested in. In the end, what's more important to her: her personal profits or being speaker?"

Pelosi has introduced this same legislation in previous years, her spokesman Drew Hammill has said, and it has nothing to do with whether states choose to cover a particular drug.

Ray Robison, a conservative commentator who first raised questions on Pelosi's ties to pharmaceutical firms, said Pelosi has not adequately answered the questions.

"Pelosi's submittal of the ETHA bill coincided with an anomalous, large donation to her campaign by Amgen executives," Robison told Cybercast News Service. "At no other time has she received donations of that magnitude from Amgen. She has significant personal ties to Amgen and through its licensing agreement with Johnson Johnson, a financial stake to her own purse."

The firm Ortho Biotech, an affiliate of Johnson Johnson, sells Procrit under a license from Amgen.

Procrit is a medication for anemia and is widely used by patients with kidney damage and by cancer patients. It is also used to help treat anemia caused by other medications used to treat HIV and AIDS, according to, a Web site with information on AIDS medications.

Prezista and Intellence, two HIV drugs manufactured by Johnson Johnson subsidiary Tibotec Therapeutics, are covered by Medicaid now for patients with AIDS, Tibotec spokeswoman Pamela Van Houten has said.

But the medicines are for HIV patients with a virus that has grown resistant to other HIV drugs. So, it's difficult to say how early in the process such drugs would be covered, Van Houten said.

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