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Congressional probe expands to include Pfizer, Merck

Pfizer and Merck are being pulled into an expanding congressional investigation into the deal drugmakers cut with the Obama administration to support Democrats' overhaul of the U.S. health care system, according to three sources familiar with the talks.

The probe began last year, with Republicans on the House Energy and Commerce Committee demanding documents from the industry's trade group, said the sources, who aren't authorized to speak publicly. When that group didn't cooperate, the panel decided to directly target Pfizer, the world's biggest drugmaker, along with Merck, Amgen, Abbott Laboratories and AstraZeneca, said one of the sources.

The investigation is exposing a tenuous relationship that has developed between the industry and Washington since passage of a law that expanded health insurance to more than 30 million Americans.

Big Pharma has loosened its ties to Republicans, who were united in voting against the law. About 54 percent of the industry's $70 million in political donations in the first quarter of 2012 went to Republicans, down from a 74 percent share in 2002.

"It's an inconstant love," Alec Vachon, a health care consultant in Washington, said of the relationship.

The almost $1 trillion, 10-year plan for overhauling the health care system passed through Congress without a single Republican vote in either the House or Senate. The insurance expansion is funded partly by more than $100 billion in taxes and discounts on products the drug industry offered to the White House. In return, the newly insured will be able to buy the drugmakers' pills using their new coverage.

"We have been cooperating with the committee on an ongoing basis since the investigation began," said Matt Bennett, a spokesman for the Washington-based Pharmaceutical Research and Manufacturers of America, or PhRMA.

Drug companies are worried that providing the committee with a bundle of documents will create more problems than it solves, according to two people familiar with the investigation.

"Any time you disclose documents, you have no idea what rocks you're going to turn over," Vachon said. "There's no upside here."

A Supreme Court ruling that invalidates parts of the law could restart the debate on what to do about health care, said Eli Lilly Chief Executive Officer John Lechleiter.

"There's going to have to be a 'what's next?' " Lechleiter said. "There's no status quo that any of us could return to."

The court plans to rule on the law's constitutionality in June.

The industry has also found little sympathy from Democrats, who say drugmakers still get too good a deal from government health care programs. A proposal in the Obama administration's fiscal 2013 budget would cut $156 billion over a decade from Medicare and Medicaid spending on the industry's drugs.