Pharma-Funded Charity Touted ‘Higher Profits’ for Drugmakers

(Bloomberg) -- About 20 years ago, a teenaged arthritis sufferer created an online community to help patients like himself. It grew into a global charity, with a lucrative side effect: It also helped drug companies make money.

The mission of the Global Healthy Living Foundation—improving the quality of life for those with chronic diseases—included motivating people to take, and keep taking, their prescription drugs. Doctors call that “compliance.’’ For the charity’s founder, no longer a teenager, it meant opportunity.

“Compliance is a revenue generator,” GHLF President Seth Ginsberg said in separate speeches to employees of Pfizer Inc. and Johnson & Johnson in 2010. For years, Ginsberg’s charity sought contributions from drugmakers, touting a hefty “return on investment” and “higher profits.” Pfizer, J&J and at least 10 other pharmaceutical companies became donors.

More recently, Ginsberg’s foundation has also become a public-policy advocate, one of several charities that, at times, fight efforts to cut the skyrocketing cost of prescription drugs in the name of preserving patients’ access to high-priced medicine. Like other groups, executives for GHLF say their policy positions aren’t swayed by their drug company funders. “When our mission aligns with others, we accept support to further our mission,” the group’s leaders said in a written statement. “If it does not align, we do not accept support.”

“Our mission is to engage in patient-centered research, provide advocacy for access-to-care, and to support people living with chronic disease by providing a supportive environment and accessible education,” the foundation said.

Yet GHLF’s historical attention to drugmakers’ profits raises questions about the charity, which took in more than $5 million in 2017. Some patient volunteers cut ties to the foundation in 2015, saying it seemed too deferential to drug companies. And its federal tax filings reflect errors and unexplained entries that have obscured the amounts of money flowing to its co-founders. The group says those transactions are ethical and appropriate.

“Can’t tell if I’m more pissed or depressed about this,” Elaine Allen, a member of the foundation’s board until she resigned earlier this week, said in an email to Bloomberg News about the errors. Allen, a professor at the University of California San Francisco, praised much of the charity’s work but said she resigned “for a variety of reasons.”

The group’s leaders declined to be interviewed for this story. In written responses to questions, they said they’re correcting the tax filings and that they always put patients’ interests first: “The only time we engage in advocacy is when it helps patients. If it doesn’t help patients, we don’t do it.”

In policy debates, patient charities are much more effective advocates than pharma companies, whose reputations have suffered amid soaring drug prices, said Matthew McCoy, a professor of medical ethics at the University of Pennsylvania. “When drug companies give money to patient groups, it’s not out of pure altruism,” he said. “They’re hoping to get something in return.”

Ginsberg was an 18-year-old college freshman when he approached a New York public relations executive, Louis Tharp, about starting an online group for arthritis sufferers. The men had met when Tharp was Ginsberg’s boss for a high school internship. Their creation, called CreakyJoints, included message boards, bloggers and surveys.

At about the same time, the men co-founded a for-profit firm, TGI Healthworks Inc., which pitched pharmaceutical companies on its ability to reach patients with messages that would boost their drug compliance—effectively helping drugmakers sell more.

By 2005, with their patient work expanding into new maladies, Ginsberg and Tharp created the nonprofit Global Healthy Living Foundation to oversee those efforts. Since then, the for-profit and the nonprofit have operated alongside each other in Tharp’s home in Upper Nyack, New York. GHLF paid rent to Tharp and divided with TGI the cost of office equipment, like phones and copy machines, according to the foundation’s nonprofit application to the Internal Revenue Service.

The charity began running events around the country, often sponsored by drugmakers, where patients heard presentations from doctors and got tips for coping with symptoms, exercising and eating right. “It was all very patient-centric,” said Richard Tjoa, who was chief technology officer at the foundation through 2009. “You can’t jog, but, OK, try swimming. Think about what you’re still able to do.”

If the programs were good for patients, the resulting improvement in drug compliance was great for pharma companies, Ginsberg wrote in a 2009 article for a marketing trade magazine. “Grassroots patient mobilization education programs yield data wearing a Teflon vest,” he wrote. “Nobody can argue the number of attendees ... and the change in their doctor’s prescribing habits.”

In his 2010 pitches to Pfizer and J&J, he said GHLF was ready “to enter into a conversation that was previously off-limits,” including topics like “market share” and “sales rep participation in our programs.”

Some nonprofits say those topics should stay off-limits. “If a nonprofit patient group is raising money from drug companies and talking about return-on-investment and increasing prescriptions, that sounds completely unethical to me,” said Diana Zuckerman, president of the National Center for Health Research, a Washington-based nonprofit that does research, education and advocacy and doesn’t accept donations from drugmakers. Zuckerman was speaking generally.

Sometimes, the line between GHLF and its donors blurred even further. In 2010, the nonprofit launched a series of patient events for chronic pain sufferers called “Taking Charge of Pain” that was funded by J&J. At the time, the drug company was selling opioids through its PriCara division. A since-deleted page from the foundation’s “Taking Charge of Pain” website said doctors who participated in an online briefing about the program would “also be able to talk with your PriCara sales representative.”

Janssen Pharmaceuticals, a J&J subsidiary, said in a written statement that PriCara sales representatives “did not participate in the programs” or interact with patients. Any discussions with doctors took place “outside of the program setting,” the company said.

Today, GHLF lists migraine, meningitis, osteoporosis and high cholesterol as conditions for which it provides support. Beyond that, the charity maintains an arthritis patient registry that’s used for research. And it advocates for public policy—often in ways that align with the aims of the drugmakers that fund it.

In 2017, for example, the foundation joined a coalition that seeks to prevent health insurers from interjecting themselves into medical decisions—interventions that generally aim to steer patients to cheaper therapies. That coalition, called the Doctor-Patient Rights Project, was created by a New York marketing firm with seed money from the pharma company Amgen Inc., Bloomberg News  reported. GHLF didn’t address questions about how it got involved in the effort. Amgen, which has described the DPRP as an effort to “address the importance of the physician and patient relationship,” is one of GHLF’s donors.

On the hot-button issue of high drug prices, GHLF focuses its attention on companies other than drugmakers—specifically, insurers or pharmacy benefit managers, the middlemen that manage drug-coverage plans and negotiate with manufacturers. “Instead of railing against pharmaceutical companies to cajole them to lower prices, there are more productive ways that patients can get lower drug prices,” Ginsberg wrote in a 2017 article with a foundation staff member.

And over the past several years, the group worked extensively in state capitols, finding patient advocates to call for certain restrictions on switching patients to “biosimilars”—drugs designed to substitute for expensive biotechnology therapies. The legislation they endorsed—requiring insurers and pharmacies to notify doctors and patients before moving patients to a biosimilar—was also sought by some drugmakers.

Some doctors defend such laws, but critics say they’re excessive; most allow pharmacies to substitute biosimilars only if they’re deemed “interchangeable” with the original drug by the U.S. Food and Drug Administration. To date, none of them has received that status.

In its written statements, GHLF said its leaders invest “much of our time” helping patients tell their stories to better shape health policy. “For many patients, this is their first time raising their voice to speak on behalf of themselves and others with chronic disease,” the foundation said.

GHLF’s advocacy efforts sometimes parallel its donors’ expansion into new drugs. In 2014, Pfizer launched a vaccine for meningitis B called Trumenba. Early the next year, the drugmaker contributed $15,000 to the foundation for “education and advocacy efforts” about meningitis B, then gave $100,000 more for “vaccine patient support and education” through 2016. The charity began speaking out on the need for meningitis B vaccinations.

At a February 2015 meeting, Ginsberg urged the U.S. Centers for Disease Control and Prevention to push more strongly for meningitis vaccinations on college campuses—but he didn’t tell the agency that his nonprofit had been paid by Pfizer for advocacy. “I have no disclosures to make today,” he said.

That was a one-time oversight that happened because Ginsberg was a last-minute replacement for a different speaker, GHLF said in its written answers to questions. A Pfizer spokeswoman said the company doesn’t fund GHLF to support its drug sales. The drugmaker has “become acutely aware of the dangers” of meningitis B, spokeswoman Sally Beatty said in a written statement. “Our goal was to raise awareness and knowledge of the disease risk on school campuses.”

Some people inside the charity began to perceive a pro-pharma bent in its approach—and a dustup over one of Pfizer’s other products brought the issue to a head. A blogger for the CreakyJoints arthritis community wrote a satirical article about a commercial for Pfizer’s rheumatoid arthritis drug Xeljanz in 2015.

The black-and-white ad showed close-ups of a woman’s hands playing a piano, two bare feet effortlessly climbing a staircase and a man’s torso squatting gracefully before diving into a lake. “Since when do people with RA squat like that? And who is this guy? A Kennedy cousin?” wrote blogger Katherine Macfarlane, a law professor and rheumatoid arthritis sufferer. Her piece noted that all of the body parts shown were “untouched by disease.”

The foundation responded by pulling her post from its website and circulating new prohibitions against bloggers criticizing specific treatments. Several CreakyJoints bloggers quit. “People felt like their voices were being silenced,” said Leslie Rott, a former CreakyJoints blogger who suffers from rheumatoid arthritis and lupus. “There was a concern they were aligning more with pharma than with patients.”

GHLF said in its responses to Bloomberg that Macfarlane’s article “unfairly attacked Xeljanz and the commercial because the drug did not work for her.” The foundation didn’t want to criticize treatments that might work for a lot of people, it said.

Pfizer has formed a particularly tight relationship with the foundation, beyond the nearly $1 million it has contributed over the past decade. Robert Popovian, a Pfizer vice president, serves on GHLF’s board of directors. But in a reflection of the discrepancies that crop up in the charity’s disclosures, it began listing him as a board member on its 2014 annual tax filing. The company says he didn’t really join the board until 2016.

(Similarly, Elaine Allen, the UCSF professor, has been listed as a board member since the charity’s inception in 2005. Allen says she has always been a scientific adviser to GHLF, but didn’t join its board until 2014 and never saw its finances before then. In 2017, the foundation listed a public relations executive from Wisconsin on its board, even though he had died a year earlier.)

The charity’s tax filing for 2016 listed the salaries of its founders, Ginsberg and Tharp, as zero. But in fact, the foundation paid Ginsberg $379,000 and Tharp $234,000 that year, GHLF said in its written responses, attributing the lack of disclosure to what it called “an error in presentation.”

Nonprofits are required to disclose transactions with so-called related parties. But it’s impossible to tell from GHLF’s tax filings what kinds of payments it has made to its for-profit cousin, TGI Healthworks. While the charity listed “payments to affiliates” of $110,000 and $279,000 in 2016 and 2017 respectively, it provided no further information. Asked about those payments, GHLF said the affiliate in question was TGI Healthworks, which should have been disclosed.

In a preliminary 2014 filing, GHLF said it had paid TGI Healthworks $628,000 in consulting fees. But when it filed an amended return several months later, all mention of that payment was removed.

“Are they operating in a way that is extremely transparent? It’s safe to say they’re not,” said Brian Mittendorf, a professor of accounting at Ohio State University who researches and teaches about nonprofits’ financial statements. “From looking at their disclosures, you have no idea how closely they’re related to some of the entities it pays.”

In initial responses to questions about its filings, the foundation stood by them, saying it believed the IRS requirements for disclosure had been met. But in a more recent statement, it said it was in the process of correcting them to list board members accurately and disclose payments to related parties.

To contact the editor responsible for this story: John Voskuhl at jvoskuhl@bloomberg.net

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