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This Philadelphia Inquirer probe uncovers hidden money ties between psychiatric drug manufacturers and nonprofit mental health groups such as NAMI and CHADD that promote these drugs. The journalist quotes MindFreedom director David Oaks: "... the entire paradigm is owned by the drug companies, and ... the hazards of the drugs, like brain damage, are not discussed":

Donations tie drug firms and nonprofits

Date Published:

May 28, 2006 03:00 AM

Author: Thomas Ginsberg, Staff Writer

Source: Philadelphia Inquirer

Many patient groups reveal few, if any, details on relationships with  pharmaceutical donors.

The American Diabetes Association, a leading patient health group,  privately enlisted an Eli Lilly & Co. executive to chart its growth  strategy and write its slogan.

The National Alliance on Mental Illness, an outspoken patient advocate,  lobbies for treatment programs that also benefit its drug-company  donors.

The National Gaucher Foundation, a supporter of people suffering from a  horrific rare disease, gets nearly all its revenue from one drugmaker,  Genzyme Corp.

Although patients seldom know it, many patient groups and drug  companies maintain close, multimillion-dollar relationships while  disclosing limited or no details about the ties.

At a time when people are making more of their own health-care  decisions, such coziness raises questions about the impartiality of  groups that patients trust for unbiased information. It also poses a  challenge for groups trying to hold patients' trust and still raise  money to serve them.

An Inquirer examination of six groups, each a leading advocate for  patients in a disease area, found that the groups rarely disclose such  ties when commenting or lobbying about donors' drugs. They also tend to  be slower to publicize treatment problems than breakthroughs. And few  openly questioned drug prices.

At the same time, the groups perform an important function by providing  services unavailable elsewhere, such as patient education and help in  obtaining medications or affording insurance.

They also try to police themselves. For example, each declares it does  not endorse or reject products. All formally require that industry  grants be "unrestricted," meaning that there are no strings attached.  One of them, Children & Adults with Attention Deficit/Hyperactivity  Disorder, or CHADD, formally caps pharmaceutical donations.

Combined, the six received at least $29 million from drug companies  last year, according to tax returns and annual reports. The amount  ranged from 2 percent to 7 percent of revenue at the Arthritis  Foundation, to 89 percent to 91 percent at the much smaller National  Gaucher Foundation.

Some health-care experts, although applauding the groups' work, are  calling for greater disclosure. And many patients expressed surprise at  the ties.

"I don't think that would make a difference as far as taking a drug,"  said Gloria Antonucci, 65, leader of a Montgomery County pain-support  group that relies on Arthritis Foundation advice. "But I think it would  make me, maybe, 250 percent more skeptical about what the group is  saying."

Jerome Kassirer, a Tufts University and Yale University medical school  professor and author of On the Take: How Medicine's Complicity With Big  Business Can Endanger Your Health, said better disclosure would guard  against abuse.

"These organizations are susceptible to industry influence because they  have trouble raising money themselves," Kassirer said.

But not all nonprofits are alike, said Marc Boutin, executive vice  president of the National Health Council, a standard-setting coalition  funded by nonprofits and drug companies. He said leading nonprofits  with "fire walls" against donor influence were worlds apart from  questionable organizations.

"We are controlled by volunteers who are living with a condition and  the drugs they take, and I guarantee these people would not be  influenced by a donor," Boutin said.

Matter of credibility

For drug companies, patient groups carry credibility that the industry  sometimes lacks to target patients and "opinion leaders" who drive  prescriptions, and hence, sales. Nonprofits also help patients stay on  the medicine and push insurers to pay for it.

"Does it help us? Sure," said Matthew Emmens, Wayne-based chief  executive officer of Shire PLC, the No. 1 ADHD drugmaker and a major  donor to CHADD.

"In the industry, we feel we're doing a pretty good thing while making  money, which is even better," said Norm Smith, president of  Langhorne-based Viewpoint Consulting Inc. and veteran marketer for  Merck & Co. Inc., Johnson & Johnson and others.

The donations are sometimes portrayed by the companies and nonprofits  as "giving back" to patients. But the funding usually comes from the  companies' marketing or sales divisions, not charity offices, company  and nonprofit officials said. Grants often rise with promotional  spending as a drug hits the market and fall when sales ebb.

Donations from Merck and Pfizer Inc. to the Arthritis Foundation more  than doubled, to at least $1.65 million combined, in 2000 as they  launched Vioxx and Celebrex. The donations fell below $375,000 by 2004,  when safety fears had flattened sales, foundation reports show.

Merck explicitly wove the foundation into sales strategies. A 2001  internal memo, disclosed in product-liability trials, shows that Merck  sought to use the foundation's pain-management program to "demonstrate  additional benefits" of its products.

Foundation president John Klippel said he was unaware of Merck's plan.  But he dismissed it as an example of mutual interests in treatment, not  profits. "We envision that as an educational program," he said. "Their  marketing folks envision it as marketing."

When interests diverge, however, groups must be ready to face donor  pressure. Michael J. Fitzpatrick, president of the National Alliance on  Mental Illness, or NAMI, said one donor recently demanded that, in  return for funding a TV public-service announcement, the ad include the  company's direct contact information. Fitzpatrick said NAMI refused.

The industry also benefits in Washington and state capitals, where  nonprofits lobby for issues such as expanded Medicaid drug coverage or  treatment programs. That can boost sales.

All six groups are active lobbyists. NAMI, for example, urges and helps  states and localities to create special one-on-one "assertive"  treatment programs, which include making patients take their medicine.

It acknowledged that drug-company donors may benefit but insisted  that's not the goal. "Nobody from the pharmaceutical industry tells us  what to do," NAMI president Fitzpatrick said.

Unusual corporate gift

In 2000-2001, the American Diabetes Association did not disclose an  unusual gift from Lilly: a lent executive, Emerson "Randy" Hall Jr.,  who moved into its Alexandria, Va., headquarters and coached it on  growth strategies, all paid by Lilly.

Vaneeda Bennett, the ADA vice president for development, denied that  the gift compromised the group but conceded that it might look bad. "We  always walk a fine line on showing favoritism to one company or  another. I would imagine other corporate donors would look askance at  it," Bennett said, adding that, if it were offered again, "we'd ask for  money."

Hall, a Philadelphia native now retired and living in Princeton, said  he never tried to influence the group and merely helped it market  itself, including writing its slogan, "Cure. Care. Commitment." He  estimated that his work, including diabetes patient research he  subsequently shared with Lilly, would have cost "hundreds of thousands"  from a contractor.

Asked why it did not cite Hall on its tax returns or annual report, ADA  spokeswoman Diane Tuncer said: "There is not a requirement to do so."

Nonprofit experts laud such executive "loans," as long as groups  disclose them and limit their authority.

Another group, NAMI, did not disclose that Lilly marketing manager  Gerald Radke briefly ran its entire operation. Radke began in 1999 as a  Lilly-paid "management consultant," then left Lilly and served as  NAMI's paid "interim executive director" until mid-2001. The group  acknowledged this only after being shown Radke's resume listing the  job.

NAMI's president, Fitzpatrick, said he did not know why his  predecessors did not disclose Radke's work. He said using Radke "was a  reasonable move to try to increase capacity."

"But there is a perception issue," he said. "So that makes it, in  hindsight, a difficult choice."

Radke, of Harrisburg, declined to comment. After NAMI, he ran the  Pennsylvania Office of Mental Health and Substance Abuse, and now  serves in the state Health Department.

Indianapolis-based Lilly, which donated at least $2.5 million to the  ADA and $3 million to NAMI between 2003 and 2005, called its executive  loans mutually beneficial. "The primary goal is to assist that  organization in developing a needed capacity or function, but it also  often serves to assist in the career development of the employee," a  Lilly spokesman, Edward G. Sagebiel, said.

Avoiding favoritism

Drug marketers battle hardest over safety and effectiveness, and  nonprofits say they strive to avoid favoring one product over another.  The six appeared to be cautious on safety scares and rarely took the  lead sounding drug-safety alerts, even as they highlighted news of drug  breakthroughs and approvals they say members demand, their materials  show.

"We don't position ourselves as a watchdog," said Bennett of the ADA.

The ADA, which received 5 percent to 10 percent of its revenue last  year from drug companies, reported little initially in 2004 about  suspected diabetes risks from antidepressants. Instead, Tuncer, its  spokeswoman, said it convened an expert conference - funded by drug  companies - and ended up echoing the concerns.

The Arthritis Foundation, which received 2 percent to 7 percent from  drug companies, said little in 2000 about early studies raising  questions about Vioxx. But when follow-up studies confirmed the  concerns in 2001 and 2002, the group highlighted the problems and  called for more safety research. A year later, Merck cut off all  donations.

Patrick Davish, a Merck spokesman, denied any link between the donation  cutoff and criticism, calling it just a "change in funding priorities."

Klippel, the group's president, said he doubted there was a link but  said it would not matter anyway. "It's not to say they've not been  unhappy with us from time to time," he said. "But it would not  influence me."

The ADHD group, while calling itself a science-based information  clearinghouse, has not published some critical information about ADHD  drugs, including an FDA warning last September about suicide risk from  Strattera, made by one of its biggest donors, Lilly.

Its chief executive, E. Clarke Ross, said the group's professional  advisory board took time to review all information before posting it.  Although the group is an outspoken proponent of ADHD drugs, he said, it  has strict fire walls against corporate influence. Indeed, it was alone  among the six in publishing an easy-to-find figure on pharmaceutical  donations: 22 percent last year, or $1.01 million.

"We have a number of conflict-of-interest practices that meet industry  standards," he said.

NAMI, like most groups, lists only FDA-confirmed side effects and  typically refers people with any questions to the drugmaker.

One outspoken NAMI critic, David Oaks of the support group MindFreedom,  described the group as an independent but willing pawn of industry.

"We're not saying there is some conspiracy in a skyscraper by a  pharmaceutical executive rubbing his hands together," Oaks said. "It's  that the entire paradigm is owned by the drug companies, and that the  hazards of the drugs, like brain damage, are not discussed."

NAMI's Fitzpatrick defended its information, but acknowledged that  groups were facing demands for fuller drug information. "I think we  should be much more like Consumer Reports. We should have transparency  on both side effects and benefits," he said.

Close ties on orphan drugs

Ties between drug marketers and patient groups appear closest on  so-called orphan diseases, which involve relatively few patients,  experts and drugmakers. Financial disclosures by two groups show they  used most of the deductible donations to pay the medical bills and  insurance premiums of patients using donors' products. That, in effect,  spreads around costs while leaving pharmaceutical prices unchanged.

The National Organization for Rare Disorders, a Connecticut-based  coalition that tries to spur development of orphan drugs, got $10.5  million - 68 percent of its revenue - from drug companies last year. It  helps pay patients' premiums and bills, administers companies'  free-drug programs and helps recruit patients for their clinical  trials.

Founder Abbey S. Meyers said that donors did not shape her group's  positions and noted that the industry needed the groups as much as they  needed it: "I criticize them [donors] all the time. It has never come  back to hurt us."

The Gaucher group, according to tax returns, received $1.77 million of  its $2 million in revenue last year from Boston-based Genzyme, and  spent $1.69 million on medical bills and insurance premiums of patients  taking Genzyme's enzyme therapy Cerezyme, which cost insurers as much  as $350,000 a year.

In contrast, the foundation took nothing from Actelion Pharmaceuticals  US Inc., of San Francisco, maker of a second-line treatment, Zavesca,  to be used when Cerezyme doesn't work. Actelion said the foundation  rejected its no-strings grants and gave little or only critical Zavesca  information.

"I don't want to say anything nefarious is going on. But it doesn't  pass scrutiny," said Actelion's president, Shal Jacobovitz. He  portrayed the foundation "almost as a commercial arm" of Genzyme.

Ronda P. Buyers, executive director, denied that the group is biased  toward Genzyme. "We're two different organizations. We do get its  money, which allows us to do what we do," she said.

Another company, Shire Human Genetic Therapies, formerly Transkaryotic  Therapies Inc., which is developing an alternative to Cerezyme, also  called the foundation unusually close with Genzyme, even though it had  accepted Shire's small donations.

Genzyme "is aggressive, and it's all part of their marketing plan to  have a dominant position," said Matt Cabrey, a Shire spokesman in  Wayne.

David Meeker, president of Genzyme's lysosomal business unit, said  Genzyme had no control over the foundation. He acknowledged that the  group was so important for Cerezyme marketing that if it didn't exist,  Genzyme would have looked for another.

"This is how we built our business," said Meeker, whose company took in  $932 million last year from Cerezyme, high for an orphan drug. "It's  also building a community where patients can get the help they need.  It's the ultimate win-win."

Buyers, who did not respond to repeated follow-up calls after an  initial interview, said:

"We cannot make them bring the price down. They do make a lot. But  without the drug, there would be all these people who would be in such  horrible positions. More people would die."

Contact staff writer Thomas Ginsberg at 215-854-4177 or

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Tom Wittick

Thomas E. Wittick is an MFI member who named one of the first psychiatric rights movement activist groups in this era in the USA. Tom chose the name "Insane Liberation Front" for the influential group that began in Portland, Oregon, USA in 1970, and he organized along side the infamous Howie T. Harp. Tom is shown here at the MindFreedom Action Space inside the Alternatives 2006 Conference in Portland, Oregon.
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