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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.

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

The National Alliance onMental Illness, an outspoken patient advocate,  lobbies for treatmentprograms that also benefit its drug-company  donors.

TheNational 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 patientgroups and drug  companies maintain close, multimillion-dollarrelationships while  disclosing limited or no details about the ties.

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

An Inquirer examination of six groups, each a leadingadvocate for  patients in a disease area, found that the groups rarelydisclose such  ties when commenting or lobbying about donors’ drugs.They also tend to  be slower to publicize treatment problems thanbreakthroughs. And few  openly questioned drug prices.

At thesame 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 topolice themselves. For example, each declares it does  not endorse orreject products. All formally require that industry  grants be”unrestricted,” meaning that there are no strings attached.  One ofthem, 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 2percent to 7 percent of revenue at the Arthritis  Foundation, to 89percent to 91 percent at the much smaller National  Gaucher Foundation.

Somehealth-care experts, although applauding the groups’ work, are  callingfor greater disclosure. And many patients expressed surprise at  theties.

“I don’t think that would make a difference as far astaking a drug,”  said Gloria Antonucci, 65, leader of a MontgomeryCounty pain-support  group that relies on Arthritis Foundation advice.”But I think it would  make me, maybe, 250 percent more skeptical aboutwhat the group is  saying.”

Jerome Kassirer, a Tufts Universityand Yale University medical school  professor and author of On theTake: How Medicine’s Complicity With Big  Business Can Endanger YourHealth, said better disclosure would guard  against abuse.

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

Butnot 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 whoare living with a condition and  the drugs they take, and I guaranteethese people would not be  influenced by a donor,” Boutin said.

Matter of credibility

Fordrug 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 ofShire PLC, the No. 1 ADHD drugmaker and a major  donor to CHADD.

“Inthe 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.

Thedonations 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.

Donationsfrom Merck and Pfizer Inc. to the Arthritis Foundation more  thandoubled, to at least $1.65 million combined, in 2000 as they  launchedVioxx and Celebrex. The donations fell below $375,000 by 2004,  whensafety fears had flattened sales, foundation reports show.

Merckexplicitly wove the foundation into sales strategies. A 2001  internalmemo, disclosed in product-liability trials, shows that Merck  soughtto use the foundation’s pain-management program to “demonstrate additional benefits” of its products.

Foundation president JohnKlippel said he was unaware of Merck’s plan.  But he dismissed it as anexample of mutual interests in treatment, not  profits. “We envisionthat as an educational program,” he said. “Their  marketing folksenvision 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, saidone donor recently demanded that, in  return for funding a TVpublic-service announcement, the ad include the  company’s directcontact information. Fitzpatrick said NAMI refused.

The industryalso benefits in Washington and state capitals, where  nonprofits lobbyfor issues such as expanded Medicaid drug coverage or  treatmentprograms. That can boost sales.

All six groups are activelobbyists. NAMI, for example, urges and helps  states and localities tocreate special one-on-one “assertive”  treatment programs, whichinclude making patients take their medicine.

It acknowledgedthat drug-company donors may benefit but insisted  that’s not the goal.”Nobody from the pharmaceutical industry tells us  what to do,” NAMIpresident Fitzpatrick said.

Unusual corporate gift

In2000-2001, 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 ADAvice president for development, denied that  the gift compromised thegroup but conceded that it might look bad. “We  always walk a fine lineon showing favoritism to one company or  another. I would imagine othercorporate donors would look askance at  it,” Bennett said, adding that,if it were offered again, “we’d ask for  money.”

Hall, aPhiladelphia native now retired and living in Princeton, said  he nevertried to influence the group and merely helped it market  itself,including writing its slogan, “Cure. Care. Commitment.” He  estimatedthat his work, including diabetes patient research he  subsequentlyshared with Lilly, would have cost “hundreds of thousands”  from acontractor.

Asked why it did not cite Hall on its tax returns orannual report, ADA  spokeswoman Diane Tuncer said: “There is not arequirement to do so.”

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

Anothergroup, NAMI, did not disclose that Lilly marketing manager  GeraldRadke 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 whyhis  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 NAMIbetween 2003 and 2005, called its executive  loans mutually beneficial.”The primary goal is to assist that  organization in developing aneeded capacity or function, but it also  often serves to assist in thecareer development of the employee,” a  Lilly spokesman, Edward G.Sagebiel, said.

Avoiding favoritism

Drug marketers battlehardest over safety and effectiveness, and  nonprofits say they striveto avoid favoring one product over another.  The six appeared to becautious on safety scares and rarely took the  lead soundingdrug-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.

TheADA, which received 5 percent to 10 percent of its revenue last  yearfrom drug companies, reported little initially in 2004 about  suspecteddiabetes risks from antidepressants. Instead, Tuncer, its  spokeswoman,said it convened an expert conference – funded by drug  companies – andended up echoing the concerns.

The Arthritis Foundation, whichreceived 2 percent to 7 percent from  drug companies, said little in2000 about early studies raising  questions about Vioxx. But whenfollow-up studies confirmed the  concerns in 2001 and 2002, the grouphighlighted the problems and  called for more safety research. A yearlater, Merck cut off all  donations.

Patrick Davish, a Merckspokesman, denied any link between the donation  cutoff and criticism,calling it just a “change in funding priorities.”

Klippel, thegroup’s president, said he doubted there was a link but  said it wouldnot matter anyway. “It’s not to say they’ve not been  unhappy with usfrom time to time,” he said. “But it would not  influence me.”

TheADHD 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 chiefexecutive, E. Clarke Ross, said the group’s professional  advisoryboard took time to review all information before posting it.  Althoughthe group is an outspoken proponent of ADHD drugs, he said, it  hasstrict 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.

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

“We’renot 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’sFitzpatrick defended its information, but acknowledged that  groupswere facing demands for fuller drug information. “I think we  should bemuch more like Consumer Reports. We should have transparency  on bothside effects and benefits,” he said.

Close ties on orphan drugs

Tiesbetween drug marketers and patient groups appear closest on  so-calledorphan diseases, which involve relatively few patients,  experts anddrugmakers. Financial disclosures by two groups show they  used most ofthe deductible donations to pay the medical bills and  insurancepremiums of patients using donors’ products. That, in effect,  spreadsaround costs while leaving pharmaceutical prices unchanged.

TheNational 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 shapeher group’s  positions and noted that the industry needed the groups asmuch as they  needed it: “I criticize them [donors] all the time. Ithas never come  back to hurt us.”

The Gaucher group, accordingto tax returns, received $1.77 million of  its $2 million in revenuelast year from Boston-based Genzyme, and  spent $1.69 million onmedical bills and insurance premiums of patients  taking Genzyme’senzyme therapy Cerezyme, which cost insurers as much  as $350,000 ayear.

In contrast, the foundation took nothing from ActelionPharmaceuticals  US Inc., of San Francisco, maker of a second-linetreatment, Zavesca,  to be used when Cerezyme doesn’t work. Actelionsaid the foundation  rejected its no-strings grants and gave little oronly critical Zavesca  information.

“I don’t want to sayanything nefarious is going on. But it doesn’t  pass scrutiny,” saidActelion’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 allowsus to do what we do,” she said.

Another company, Shire HumanGenetic Therapies, formerly Transkaryotic  Therapies Inc., which isdeveloping an alternative to Cerezyme, also  called the foundationunusually close with Genzyme, even though it had  accepted Shire’ssmall donations.

Genzyme “is aggressive, and it’s all part oftheir marketing plan to  have a dominant position,” said Matt Cabrey, aShire spokesman in  Wayne.

David Meeker, president of Genzyme’slysosomal business unit, said  Genzyme had no control over thefoundation. He acknowledged that the  group was so important forCerezyme marketing that if it didn’t exist,  Genzyme would have lookedfor another.

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

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

“Wecannot make them bring the price down. They do make a lot. But  withoutthe 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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