December 1, 2016; Project on Government Oversight
NPQ has taken on many types of nonprofit conflicts of interest, recently asking readers to consider whether disclosure and recusals were a sufficient barrier against their influence. But one of the most powerful kinds of conflict comes from habitually earning your living largely from those whose interests do not necessarily align with your declared constituents.
When a nonprofit organization steps forward to speak on an issue of public concern, it is important that there is no confusion about whom they represent and where their funding comes from. If the two appear to be in conflict, is it enough for an organization to deny that its funders control its positions? Or must they step away from the policy arena to avoid even the appearance of a conflict?
A recent investigation by the Project on Government Oversight (POGO) examined how the Food and Drug Administration included patients in their oversight process. It provides an interesting case example of how complicated this question can be.
The FDA recently completely renegotiated its agreement that establishes how it approves the use of new drugs and what drug companies will be required to pay the FDA to cover the cost of the approval process. At stake is how drug oversight will balance the economic interests of a rich and powerful industry against the health and safety of the public. As part of this process, the FDA is required to consult with both representatives of the regulated industry and with “representatives of patient and consumer advocacy groups.” The question, then, of who is speaking for the public is vital in understanding and evaluating what ultimately emerges as public policy.
POGO found that all of the groups who were invited to speak as voices of patients and consumers received funding from the drug firms and industry associations or had leadership with ties to the industry. To quote some examples:
- EveryLife Foundation for Rare Diseases, whose president is also CEO of Ultragenyx, a pharmaceutical company.
- American College of Cardiology, whose CEO was previously president of the pharmaceutical company Actelion Pharmaceuticals U.S.
- Sarcoma Foundation of America, whose co-founder and president Mark Thornton works for Biologics Consulting. The firm describes itself as “a full-service regulatory and product development consulting firm for biologics, pharmaceuticals and medical devices.”
- Juvenile Diabetes Research Foundation, which receives tens of millions of dollars from drug companies and whose 2016 D.C. Hope Gala was sponsored by PhRMA. In a microcosm of the revolving door, one of its top executives, David Wheadon, joined the group from PhRMA and left it to become senior vice president for global regulatory affairs at drug-maker AstraZeneca.
- FasterCures, part of former junk bond king and financial felon Michael Milken’s Milken Institute, which recently hosted a conference sponsored by drug companies.
- Cancer Support Community, whose board includes the senior director of global advocacy and professional relations at Eli Lilly, two executives from Vertex Pharmaceuticals, the chief financial officer of a medical device company, the co-head of government affairs at Goldman Sachs, the chairman of Bexion Phamaceuticals LLC…and, until recently, a senior vice president for government affairs at Bristol-Myers Squibb. It also includes the chief executive of Cancer Support Community, a former overseer of patient relations at drug-maker Hoffman-LaRoche.
No group that by policy refuses industry funding, like the National Consumers League, Consumers Union, Public Citizen, or US PIRG, was asked to be a formal presenter.
Is it enough for these possible conflicts to be discoverable for an organization’s opinion to be regarded as conflict-free? Or should they recuse themselves? Should these organizations be concerned when only organizations with financial ties to an industry are invited to participate in the process? Is having a policy that prohibits donors from determining the organization’s policy positions a sufficient barrier to a conflict of interest?
The Cancer Support Community states, “While we welcome input from our corporate partners, CSC maintains total independence and has ultimate authority over program design, development, content, speaker selection and/or policy positions.” Its president, Linda House, who previously worked for Lilly Oncology, told POGO, “Patients inform the work. Period.”
Raising the funds necessary to operate a national organization that both educates and supports patients and advocates for their interests is no easy task. Clearly, industry money can help them do much direct good for those they serve. But, can they be true advocates when they become heavily dependent on companies whose priority is to protect their shareholders’ interests rather than that of the general public?—Martin Levine