NY Times examines drug company ties to tax-exempt charities Posted by Rob Schneider at 06/28/06 10:47 AM

The NY Times raises more questions about the role of drug company money making its way into tax-exempt charities typically set up to promote patient education or research.

I've blogged about related issues ( It just keeps coming: more nonprofits called to task for drug company connections, More doctors rejecting drug company swag, Pharma Defends Use of Swag -- Does Anyone Believe Them?, Shocking news!).

The Times piece brings up a more subtle way that drug company money may influence health care decisions. The story features the Midwest Heart Foundation :

. . . an arm of the thriving for-profit medical group outside of Chicago where Dr. Costanzo and more than 50 of her fellow doctors treat heart patients — in many cases using products and drugs made by CHF Solutions and other big donors to their charity. Although the CHF Solutions device has generally been slow to catch on, physicians at Dr. Costanzo's medical group have treated many patients with the company's filtration system.

The Midwest Heart Foundation, and the way it has become quietly interwoven into its doctors' professional lives, is far from unique. Around the country, doctors in private practice have set up tax-exempt charities into which drug companies and medical device makers are, with little fanfare, pouring donations — money that adds up to millions of dollars a year. And some medical experts see that as a big problem.

In response:

Dr. Mark Goodwin, a managing partner for the Midwest Heart for-profit practice, said the foundation was created to help prevent potential conflicts by keeping the industry money separate from the doctors' private practice. Companies contribute to the foundation, he said, because they can rely on its research and the doctors involved can enroll large numbers of patients in studies. "We are able to deliver excellent research to our community in a timely fashion," Dr. Goodwin said, "and we are proud of it."

The article cites critics who fear such arrangments may not lead to improvements and may end up covering some fo the for-profits' business expenses:

Too often, the critics contend, the industry donations amount to a form of "relationship funding" — to use one skeptical doctor's term — in which companies hope to sell more drugs and devices by currying favor with the doctors. That skeptic, Dr. John Cherf, is a knee surgeon at the Neurologic and Orthopedic Institute of Chicago who also consults for a market research firm specializing in health care topics. He says the donor arrangements are fraught with potential conflicts of interest and are likely to come under greater scrutiny as the costs of devices and drugs rise.

The flow of drug and device maker money into charities affiliated with physician groups, at a minimum, raises perception problems for the docs.

These concerns are not different from drug maker funding of non-profit patient groups. In that case, the patient groups need to worry about whether drug company money makes them seem to have a bias in their work. In this case, the doctors may well wonder whether patients and others infer a bias because of where their affiliated chartiy is getting money.

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