Outside political groups not always what they appear

WASHINGTON (AP) — As ominous music plays in the background, the narrator of a radio ad echoes objections from drugmakers by warning that a Trump administration proposal to apply international pricing to certain Medicare drugs would be a nightmare for seniors.

The one-minute spot is the handiwork of the Alliance for Patient Access, a non-profit group that gives off a consumer-friendly vibe yet is bankrolled by the powerful pharmaceutical industry. It’s also closely aligned with a Washington lobbying and public relations firm, Woodberry Associates, whose president, Brian Kennedy, is the non-profit’s Executive Director.

As Congress and the Trump administration aim to lower prescription drug costs, outside groups like the Alliance for Patient Access are seeking to sway the outcome. But not all of these organisations are clear about who they actually represent. Their names can obscure the source of the message and they’re cagey about where they get their funding.

Yet even a small degree of separation can be valuable for pharmaceutical companies at a time when the industry faces stiff political headwinds. Drug prices may provide a rare bipartisan issue on which Congress and the White House could collaborate on legislation ahead of the 2020 elections. In a prelude of sorts, the Senate Finance Committee last month grilled drug company executives over the cost of their products.

Anger is bubbling up from their constituents. A February poll by the non-partisan Kaiser Family Foundation found nearly one in four Americans taking prescription drugs have difficultly affording their medications. Although majorities of the public trust pharmaceutical companies to develop new and effective drugs, only 25 per cent trust them to price their products fairly — down from 41 per cent in 2008.

Susan Hepworth, a spokeswoman for the Alliance and Woodberry, described the non-profit as “a national network of physicians that advocates for patient access to the medicines they prescribe”.

Through the Alliance, she said, doctors “can share their perspectives about the benefits of respecting the physician-patient relationship, clinical decision making and personalised, patient-centred health care.” It’s no surprise, Hepworth said, that the group’s backers include companies that manufacture medicines.

She declined to answer questions about the radio ad. The one-minute spot singles out for criticism a Trump administration proposal to gradually shift Medicare payments for drugs administered in doctors’ offices to a level based on international prices.

Prices in other countries are lower because governments directly negotiate with manufacturers. But drugmakers have assailed the Trump plan, arguing it smacks of government price-setting and would lead to socialised health care.

The Alliance’s radio spot makes the same argument, using nearly identical language.

Under the Trump proposal, the ad said, “cancer treatment would be paid based on rates from countries with European-style health care, where access to new medicine is rationed and patients often wait months for care”.

Tax filings for 2015 through 2017, the most recent available, show the Alliance has paid Woodberry’s consultants more than USD1 million. Brendan Fischer of the nonpartisan Campaign Legal Center said the transactions may raise red flags.

“Non-profits are supposed to promote social welfare, not operate to provide a private benefit to any person or entity,” Fischer said. “A non-profit could run afoul of tax law if it is substantially benefiting a non-profit officer’s for-profit consulting firm.”

Hepworth said Woodberry is a consultancy with a division that specialises in nonprofit coalition management and that the money paid to the firm’s people represents a small amount of the Alliance’s expenditures for those years.

The Alliance “files all of the appropriate paperwork with the IRS and takes the extra step of making available on its website a current list of its supporters,” according to Hepworth. The link to this list takes a bit of searching to find, however.

The Alliance’s money comes from more than three dozen associate members and financial supporters, which include several of the largest pharmaceutical companies. Among them are AbbVie, manufacturer of Humira, the blockbuster drug for immune system conditions; AstraZeneca, maker of the cholesterol drug Crestor; Bristol-Myers Squibb, maker of the blood thinner Eliquis; and Pfizer, maker of Lyrica for nerve pain.

The group’s leaders are medical doctors based outside of Washington; those identified in the tax records as directors aren’t paid for the one hour per month, on average, of work they do for the non-profit. But several of them have earned tens of thousands of dollars in consulting and speaker fees from the health care industry, including companies that back the Alliance.

While the Alliance names its supporters, it doesn’t disclose how much each has contributed. Federal rules permit groups structured as tax-exempt social welfare organisations to say little about their benefactors.

Social welfare organisations like the Alliance also may engage in limited political activities so long as politics isn’t their primary focus. Known by their IRS designation as 501(c)(4)s, they typically are civic-minded groups such as homeowner associations and volunteer fire departments.

The Alliance spent USD13.6 million in 2015 and 2016 on awards to recognise dozens of members of Congress who, according to Hepworth, “have championed patient access in the Medicare programme”. The lawmakers, who are barred by ethics rules from accepting monetary gifts, are presented with a plaque and are praised in press releases and advertisements.