Journalism in the Public Interest

Medical Groups Shy About Detailing Industry Financial Support

Sen. Charles Grassley asked 33 health organizations who their corporate backers are, and responses show that some get half their income from the medical industry. Critics say public disclosure of industry ties is needed.


Sen. Charles Grassley, R-Iowa, sent a letter asking 33 health organizations to list their industry funding and note whether they made the information public. (Alex Wong/Getty Images)

When it comes to the money they get from drug and device makers, many medical associations and health advocacy groups would rather not publicize who gave and how much.

In December 2009, Sen. Charles Grassley, R-Iowa, sent a letter asking 33 organizations to list their industry funding and note whether they made the information public.

ProPublica's review of the responses shows wide variations in the groups' reliance on such funding. Those with a heavy proportion of industry support often represented specialists who use pricey drugs and devices.

In contrast, larger advocacy groups reported accepting proportionately less money from industry sources.

Grassley, as well those who research conflicts of interest, say it's impossible to assess potential bias without knowing the scope of such relationships.

If a group gets millions from a company that makes a product used by its members, it is reasonable to wonder whether the guidance it offers on treatments would benefit that company, he said.

For example, federal agencies may want to take into account a group's donors when the group lobbies for new treatments or changes in Medicare coverage. That's only possible if a group's funding is disclosed.

"My feeling is it's not the total answer, but at least it does a lot of good," said Grassley, who is encouraging the groups to post their corporate donors online. "Transparency, the public's right to know, brings some accountability."

What Groups Reported

In their responses, some groups listed every dollar received and calculated the percentage of their revenues derived from industry funding. Others listed each payment but not their total revenues. (See all the responses.)

Several groups said money from drug, device or insurance companies accounted for less than 10 percent of their revenues. The Leukemia & Lymphoma Society, for instance, told Grassley that from 2006 to 2009, it received roughly 5 percent of its funding from industry. The American Cancer Society pegged its percentage even lower, at 1.5 percent.

The American College of Obstetricians and Gynecologists reported 8.6 percent; and the American Psychological Association, whose members typically can't prescribe drugs, said it received less than 1 percent.

ProPublica calculated some percentages based on figures the groups reported to Grassley, data on their websites and tax filings.

Among those with a heavier reliance on industry support were the Heart Rhythm Society, nearly 50 percent in 2010; the North American Spine Society, more than 50 percent in 2009; and American Academy of Allergy, Asthma and Immunology, with more than 40 percent in 2008.

For some other groups, the level of support was difficult to assess.

The American Academy of Family Physicians broke its payments down by calendar year. But the group reported budget figures to the Internal Revenue Service based on its June-to-May fiscal year, making comparisons difficult.

The American Society of Hypertension told Grassley that it got $4.5 million from industry in fiscal 2009. The group's tax return, however, shows total revenues during that same period were only $2.7 million. An official with the group said it was researching the discrepancy.

For groups that post at least some financial data on websites, there are wide variations in the specificity and quantity of information. Some groups, such as the American Academy of Pediatrics, don't provide any information.

Will Voluntary Disclosure Work?

A move to establish uniformity in how and what the groups report is under way. A voluntary code of conduct created by the Council of Medical Specialty Societies requires groups to disclose industry support.

The council's chief executive, Norman B. Kahn Jr., said the code, adopted in April 2010 and revised this March, is still being implemented by nearly three dozen groups who signed onto it so far.

"The clock is ticking now," he said, "so, better late than never."

As of now, voluntary efforts are the only means of getting the information. The health care reform law passed last year mandates that drug and device companies report all payments they make to physicians by 2013, but payments to medical societies and other advocacy groups are not included.

Grassley, ranking member on the Senate Judiciary Committee, said he hopes enough groups will see the importance of disclosure that legislation to require it isn’t necessary.

On Wednesday, he sent follow-up letters to those queried in December 2009, as well as one additional group. He praised 15 for beginning to post information on the web and asked 18 others why they hadn't done the same. (See which organizations Grassley says have made progress in response to his request to put their financial relationships with industry online.)

More accurately the health and disease groups listed should be called Voluntary Organizations, meaning that they re non-governmental organizations. While many if not most of them also enlist the services of large numbers of volunteers, these groups are run on a model akin to that of major corporations in terms of their budgets, governance, executive compensation, just to name a few characteristics. The only difference is that groups which are nonprofit corporations and state and federal ( holding 501(c)3 status) registered charities are tax exempt and do not pay dividends to stockholders. This does not mean that the groups are not making hefty profits or that they do not compensate their leadership quite handsomely. 

Often disease groups may seek to cultivate the image—enlisting the services of premier PR firms—  they exist primarily to directly benefit those afflicted with a specific ailment, but the fundraisng efforts of many of the groups is directed primairly to toward research. Very few are those who actually help to facilitate access to therapies available today. 

The relationships between industry and health advocacy groups are ever-increasing and increasingly complex. You should look not only at biopharma funding but at all industry funding they receive, and not just at percent of types of funding they report.  The American Cancer Society, for example, receives support ( reported as $10 M in 2005) from the Cosmetics, Toiletries and Fragrances Association.  But when the bill that became the California Safe Cosmetics Act of 2005 was under consideration,  requiring disclosure by manufacturers of potentially carcinogenic ingredients in personal care products, the ACS was conspicuous in its silence on the topic.

Increasingly too the health advocacy groups (HAGs)  receive industry funding to run limited patient assistance programs (PAPs) to help the “deserving poor” and some under-insured people with the obscene cost of many drugs, especially new biologics , cancer drugs, and treatments for rare diseases. While PAPs help some in the here & now, they are so fraught with complex and restrictive eligible requirements and application process, that their usefulness is limited.  PAPs have become a specialty industry themselves, while the PR spin around them services to distract the public and policy makers alike about their usefulness. But while some HAGs now are decrying the high cost of drugs, rarely do they demand that something be done about their cost.  The operating mode is “don’t bite the hand that feeds you.”.

the IRS currently does not require charities to disclose their donors, nor amounts received, although some do. Changing this policy would be one step to creating necessary sunshine around health voluntary groups. And readers might be interested to learn that originally the Sunshine Act that became part of ACA was going to include HAGs, but that provision was dropped. I urge you to extend your research to this important area as well.

Thanks for the Dollars for Docs series! Looking forward to reading more.

Joana Ramos

Thanks for the work you are doing. I see several comments about the ‘vital role” the drug industry plays in medical advances. First, the money they spend on research is a fraction of their total budgets. Second, the majority of their research money goes to fund phase II and III studies of “me-too” drugs. Most of the current opinion leaders in medicine weren’t around when any respected academic would have rejected drug money as base and anti-intellectual. The “vital role” for today’s academic is in speaker and consulting fees and in the so-called “unrestricted” grants they receive. I get the feeling the list of “disclosures” at the end of articles is like another page of their CV’s. 
I’m a fellow of the American Academy of Neurology and of the American Heart Association, and I believe the depth of big pharmas influence in those societies is such that it could never be unraveled, and sadly it probably never will be. There are just too many inflated lifestyles riding on it.

This article is part of an ongoing investigation:
Dollars for Doctors

Dollars for Doctors: How Industry Money Reaches Physicians

ProPublica is tracking the financial ties between doctors and medical companies.

The Story So Far

ProPublica is investigating the financial ties between the medical community and the drug and device industry. In October 2010, ProPublica compiled the list of payments that drug companies make to physicians and built a publicly searchable database so that patients could look up their doctors.

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