Pharma’s Charity Allies Help Its Fight to Keep Drug Prices High
(Bloomberg) -- The U.S. Rural Health Network has a slogan on its website that seems obvious: “We’re fighting for rural health.” But it’s not that simple.
The two-year-old nonprofit hasn’t had much impact in rural health circles, where experts say they’ve never heard of it. It’s also active in a different area: fighting proposals that would cut the cost of prescription drugs. This year, it joined scores of other groups to oppose letting Medicare negotiate prices with drugmakers.
The network, which declines to disclose who funds its work, is part of a gaggle of self-styled patient-advocacy groups with murky origins or hidden funders that have cropped up since 2017. With names like the Doctor-Patient Rights Project or the Defenders Coalition, such groups pursue various policy aims that include effectively aiding pharmaceutical companies’ efforts to defeat drug-price proposals. The nonprofits take public positions in newspaper op-eds and letters to Congress while drugmakers—beset by years of negative publicity over price hikes—tend to remain in the background. The groups say they’re independent.
That’s not true for all of them, said Marc Boutin, the chief executive officer of the National Health Council, which has more than 50 patient groups and dozens of drugmakers as members.
“There are a number of groups created by pharma companies that look and act like patient organizations, but they’re 100 percent funded by industry,” said Boutin, who didn’t name any specific examples. “They sound and look like patient organizations, but they take positions that industry wants.” Boutin said he’s trying to dissuade pharma companies from getting involved in such efforts.
These newer nonprofits often join issue-oriented coalitions alongside established, bona fide patient groups, amplifying their message. Some experts fear they provide a way for drugmakers to influence policy without any disclosure of such efforts. Typically, the newer groups are created and operated by public-relations or marketing firms with extensive ties to the pharmaceutical industry. They generally refuse to discuss their funding, but Bloomberg News documented that at least one got its seed money from Amgen Inc., whose most lucrative drug, the arthritis medicine Enbrel, has tripled in price since 2010, according to data from IBM Watson Health.
While its funding is unclear, the U.S. Rural Health Network has an illustrative origin story. It was registered in 2017 by the general counsel of Moore Communications, a Tallahassee, Florida-based marketing firm. Moore Communications has worked for the drugmakers’ industry group, Pharmaceutical Research and Manufacturers of America, or PhRMA, since at least 2001, including on a national ad campaign in 2014. The firm has also built websites for at least three other patient-focused groups with opaque industry connections.
The rural-health network is a family affair. Its executive director is the sister of Karen Moore, Moore Communications’ chief executive officer. One of the group’s directors is the mother of a Moore Communications vice president. And the lawyer who registered it is Richard Moore, Karen’s husband and the marketing firm’s general counsel.
The charity’s headquarters, located behind an unmarked door in a building owned by Richard and Karen Moore, was locked on a recent weekday morning. Across a parking lot, in Moore Communications’ corporate office, Richard Moore described the nonprofit as separate from the marketing company and said he helped launch the organization because “we saw a particular need regarding health issues with rural areas of the country.” (Four directors of other rural health centers say they’ve never heard of the group. “I don’t know anything about them,” said Alan Morgan, CEO of the 21,000-member National Rural Health Association, which holds the nation’s largest annual conference on rural health issues.)
Asked to name the nonprofit’s funders, Richard Moore said he’d have to ask some colleagues for the information. Neither the nonprofit nor the marketing firm responded to follow-up requests, but Cheryl Elias, the Rural Health Network’s executive director, said in a written statement that the group takes its positions “independent of outside influence.” A spokesman for PhRMA, the drugmakers’ industry group, declined to say whether it has funded the nonprofit.
Nonprofits aren’t required to publicly disclose their donors. Some pharmaceutical companies voluntarily disclose at least some of their funding for patient groups, but the full scope of their giving is far from transparent.
Even among long-established patient organizations—founded years ago to address specific diseases or conditions—disclosure is spotty. Matthew McCoy, a University of Pennsylvania professor who teaches medical ethics, found in a 2017 study of 104 patient-advocacy groups that 83 percent reported receiving money from drugmakers, but only 5 percent disclosed the exact dollar amounts. Kaiser Health News reported last year that 14 major drug companies gave a combined $116 million to patient groups in 2015, far more than the $63 million they spent on federal lobbying.
Much of that money benefits disease sufferers or society at large. Patient groups run support networks for those who’ve received life-altering diagnoses. Some support research to develop new treatments for particular diseases. They also create communities of patients from whom drug companies can learn more about particular ailments and how treatments affect people.
But those communities are also stocked with potential policy advocates. And with no disclosure requirements, it’s often impossible to know whether drugmakers’ contributions are shaping the patient groups’ policy stances, said Susannah Rose, associate chief of patient experience at the Cleveland Clinic.
“We need much greater transparency, not only in funding, but also how the money is used,” Rose said.
Long-established groups bristle at the suggestion that the drug industry sways their positions. “There are times when what’s best for the patient aligns with what industry wants,” said Claire Gill, chief mission officer for the 35-year-old National Osteoporosis Foundation. “And there are times when it doesn’t.”
With regard to Medicare and drug prices, the osteoporosis foundation recently aligned with the industry in an unusual way.
In 2017, the osteoporosis group began running an informal coalition called the Protect Medicare Part D Working Group. It organized a January letter that called on Congress to reject plans for letting Medicare negotiate on drug prices; some 200 organizations signed it, including the U.S. Rural Health Network.
The negotiation issue has a tortuous history. When Medicare was expanded to cover prescription drugs in 2003, it became the single-biggest buyer of medicines in the U.S. But while other federal agencies, such as the Department of Veterans Affairs, can use their market clout to seek better deals on drug prices, Congress prohibited Medicare from doing so. Instead, the scores of private insurance providers that offer Medicare plans are left to negotiate individually with drugmakers, with significantly less power.
Now several Democrats, including Senator Amy Klobuchar of Minnesota, have proposed legislation to let the sprawling health program bargain on behalf of its 43 million beneficiaries. Gill said the osteoporosis foundation took a leadership role in opposing that plan—not because of any drugmakers’ contributions, but rather the fear that such legislation would eventually force Medicare to cut its coverage of certain high-priced drugs, including some needed by osteoporosis patients. (The foundation gets about $1 million a year, or 20 percent of its budget, from drugmakers.)
“We support lower prices, but we want to make sure that whatever is proposed actually makes the system better,” Gill said.
Klobuchar’s proposal doesn’t get to that level of detail, but the group’s concern stems from previous research: The Congressional Budget Office has said that Medicare negotiations would yield significant savings only if the program is given the authority to restrict coverage of certain medicines.
Lobbyists with pharmaceutical industry ties have worked behind the scenes with the Medicare Part D Working Group as it attempts to transition to a new, catchier name: the Defenders Coalition. The osteoporosis foundation won’t be running the new version. Instead, initial work on the changeover was done by a Washington-based lobbying firm called NVG Group, which has worked recently for drugmakers like Merck & Co. Inc., Sanofi and Pfizer Inc., as well as the trade group, PhRMA.
The transition also got an assist from lobbyist and former Democratic Senator Blanche Lincoln. According to a written summary of a January conference call, Lincoln urged members to stick with the coalition and keep fighting “drastic changes” to Medicare. Her company, Lincoln Policy Group, has worked for drugmakers, including AbbVie Inc. and Pfizer, as well as insurers such as Aetna Inc.
Were the lobbying firms paid to help organize the coalition? “You’d have to ask them,” said Gill of the osteoporosis foundation. Irene Bueno, a co-founder of NVG, said in an email that her firm is no longer involved in the effort; she didn’t answer questions about who funded her work. Lincoln Policy Group didn’t respond to several telephone calls and emails seeking comment.
The coalition’s January letter against Medicare negotiations appears to have benefited in part from a bandwagon effect. One patient group that signed it was the National LGBT Cancer Project—though its director said in an interview that he really doesn’t know enough about the issue to form an opinion on it. Darryl Mitteldorf, who runs the cancer-patient support group under an umbrella organization called Malecare, said he gets an avalanche of requests to sign policy letters, so he’ll sometimes sign on if he sees other groups he trusts.
Drug companies supply about half of Malecare’s annual operating budget of $209,000, and Mitteldorf calls them “heroes”—“they make the molecules that save lives”—but he’s wary of their influence all the same. He said he turns down drugmakers’ money when their agenda doesn’t fit his organization’s mission, but not every group does that.
“It’s no surprise who’s going to get a favorable response to a grant proposal,” Mitteldorf said, “if you’re licking the boot of pharma.”
Another patient group that popped up in 2017 shows how one pharmaceutical company tried to downplay its involvement.
The Doctor-Patient Rights Project lists 18 members—including the U.S. Rural Health Network and the drugmaker Amgen—and describes itself as a “nonprofit coalition of doctors, patients, caregivers, companies and advocates.” It publishes detailed policy papers and places scores of op-eds in newspapers around the country, mostly criticizing insurance companies for interjecting themselves into medical decisions and steering patients to cheaper therapies.
The group’s website provides scant clues about who operates and funds the coalition—no names or addresses—but there is a phone number. It goes to a voicemail account that doesn’t give a name. After Bloomberg News left a message, a person who called himself “Eli” responded via email and said the group is funded by “private companies, grants, educational institutions and non-profit organizations.” He didn’t reply to a request for actual names.
“DPRP was founded on the idea that medical decision-making should be based on science, not economics,” said Dr. Theresa Rohr-Kirchgraber, a member of the group, in an emailed statement. “The idea that any single entity unduly influences our agenda is categorically false,” said Rohr-Kirchgraber, a past president of the American Medical Women’s Association.
An Amgen spokeswoman described an organic beginning for the group. The company heard from physicians and patient groups about people who were unable to get the medicines their doctors prescribed, she said. “As a result, Amgen and other founding members ... came together to address the importance of the physician and patient relationship,” she said in a written statement. These founding members, Amgen said, agreed to select a public-relations agency to run the coalition.
But that’s not exactly how it happened. In reality, the Doctor-Patient Rights Project began after a New York-based public-affairs firm called Marathon Strategies pitched the idea to Amgen, according to two people familiar with the group’s beginnings.
Amgen put up the initial money, while Marathon helped recruit other members, built the website, wrote the reports and placed the op-eds in newspapers. The marketing company declined to comment.
Questioned about this timeline, Amgen provided an updated statement, saying the company—and not the coalition’s member groups—selected Marathon based on their past relationship. It added that while Amgen provided the “seed money” to launch the group, other groups and companies have contributed since.
It declined to name them.
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