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Senate Finance Committee Report Calls for Greater Drug Industry Transparency on Payments to Non Profits

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On December 16, 2020, Senate Finance Committee Chairman Chuck Grassley and Ranking Member Ron Wyden released a report to the Senate Finance Committee titled “Findings from the investigation of opioid manufacture financial relationships with patient advocacy and other tax exempt entities” which focused on the connections between opioid manufacturers and opioid-related products and the tax-exempt entities that have increased the sale of opioid products while simultaneously downplaying the risks of opioid addiction.

The report follows a June 2019 letter sent by the senators to ten tax-exempt organizations requesting, and subsequently collecting, financial data including grant contracts, audits and IRS Form 990s, in addition to information about their advocacy activities and the advocacy activities of their officers and board members.

Upon review of the data, the senators identified $65 million in payments from manufacturers of opioids and opioid-related products to such advocacy groups since 1997, with $30 million of that being given since 2012.

The report issued by Senators Grassley and Wyden specifically called out a handful of these payments, including an October 2001 disbursement from Purdue to fund the publication of a book entitled “Pain assessment and management: an organizational approach” and funding in August 2000 of two videos for “Pain Management in Special Populations: Geriatric and Disease Related Pain.”

The report also makes an example of the marketing and sales investments made by Endo for its opioid drug, Opana ER. According to the letter, Endo’s business plan for marketing the drug included “’utilize[ing] existing and newly trained pain specialist speakers’ in an effort to provide a platform for dialogue between pain specialists and the pain care physician community to discuss the features and benefits of Opana ER.” Endo also “heavily invested in tax-exempt organizations focused on pain issues,” including payments of $5.9 million to the American Pain Foundation, $4.2 million to the American Pain Society, $1.3 million to the American Academy of Pain Medicine, and $369,000 to the Federation of State Medical Boards between 1998 and 2012.

According to the report, the data shows that fees for opioid and opioid-related work is one of the largest revenue sources for some of the organizations. In fact, the Alliance for Patient Access, the American Academy of Pain Medicine, the American Chronic Pain Association, International Association for the Study of Pain, and the United States Pain Foundation collectively received $23 million, “millions of which came in the form of grants from drug and device manufacturers for opioid and opioid-related work.”

The senators, therefore, believe that opioid manufacturers have used the tax-exempt organizations as “helpful extensions” of their sales and marketing efforts and therefore made two recommendations to improve transparency. The first recommendation is to expand the Open Payments database operated by the Centers for Medicare and Medicaid Services (CMS) by requiring pharmaceutical and device manufacturers to report payments they make to tax-exempt organizations and the second recommendation is to require the Health and Human Services (HHS) Secretary to develop guidelines and procedures to increase transparency among members of various Federal task forces, research groups, and panels convened or contracted by HHS.

The senators have both used their leadership positions over the last several years to bring about greater transparency in the financial relationships between opioid manufacturers and tax-exempt organizations, including pain advocacy groups, professional provider groups, and medical associations.

“Tax-exempt advocacy organizations like the ones we looked at are created with good intentions. They can be forces for good, advocating and highlighting issues that might not otherwise receive the warranted attention. But we’ve found that the possibility of donor influence could and has undermined the efforts to develop and advocate good policy. When it comes to opioids, we need to make sure there is transparency and accountability to prevent what, in this case, led to serious public misunderstanding of the risks of these highly addictive drugs,” Grassley said.

“Our bipartisan investigation shows how pharmaceutical companies use tax-exempt groups to help seed the market for their products by shaping the views of patients, doctors and policymakers. The potential dangers presented by opioids makes this Trojan horse-style of marketing particularly troubling, but make no mistake that such practices are widespread across the pharmaceutical industry, and consumers are often left in the dark. I look forward to working with Senator Grassley and our Finance Committee colleagues to pass into law important reforms that provide consumers with more visibility of the financial relationships between drug companies and tax-exempt organizations,” Wyden said.