The Shady Overlap of Disease Charities and Drug Companies

[The Straight Story]

Nonprofits dedicated to fighting diseases are now providing seed money to pharmaceutical manufacturers in an attempt to get new treatments on the market for patients to use. But these new partnerships, known as “venture philanthropy,” have raised concerns over what the financial investments might do to the impartiality of disease charities when they have a stake in how well the new drugs perform and sell.

Despite their nonprofit status, organizations like the Cystic Fibrosis Foundation stand to make millions of dollars from helping a drug company add a new remedy to its stable of therapies.

In the case of the Cystic Fibrosis Foundation, it gave Vertex Pharmaceuticals $75 million to develop Kalydeco, considered a “breakthrough” drug that could reap big profits.

The foundation has already enjoyed a big return on its investment, collecting royalties on sales of the drug before selling its rights to future royalties to an investment firm for twice the amount it gave Vertex. Vertex, meanwhile, charges $307,000 a year for Kalydeco, with much of the money coming from Medicaid and other government-funded programs.

http://www.allgov.com/news/where-is-the-money-going/the-shady-overlap-of-disease-charities-and-drug-companies-130610?news=850251

[pinto]

1. The foundation's drug development entity claims royalties are re-invested in drug development.

Drug Development Pipeline

Finding new medicines to fight CF and ultimately cure this disease is the driving force behind the Cystic Fibrosis Foundation. To achieve this goal, we aggressively invest in drug development research with the most successful and innovative biotech companies and scientists in the world. In keeping with this business model, Cystic Fibrosis Foundation Therapeutics, Inc., the Foundation's nonprofit drug development affiliate, customarily enters into contractual agreements with pharmaceutical companies to receive royalties after the approval and/or sale of certain drugs that are developed as a result of CFFT funding. Any royalties CFFT receives are reinvested in support of our mission.

http://www.cff.org/treatments/Pipeline/

from their FAQ section -

Are there programs available to help pay for CF drugs and care?

Many people with CF use Cystic Fibrosis Services, Inc., a specialty pharmacy that is a subsidiary of the Cystic Fibrosis Foundation. It provides access to CF drugs, offers patient assistance programs and works to help resolve complex insurance issues. CF Services is a participating provider with more than 5,000 insurance plans and nearly 40 state and federally funded programs. Visit www.cfservicespharmacy.com or call [phone].

In 2008, the CF Foundation launched the Cystic Fibrosis Patient Assistance Program (CFPAF) as a nonprofit subsidiary. The CFPAF helps people with CF (who qualify) who need FDA-approved medication or paired drug-delivery devices for the nebulized treatment of CF-related pulmonary disease, or an FDA-approved medication for the treatment of pancreatic insufficiency related to CF. Case managers at the CFPAF help people with CF with ways to reduce out-of-pocket costs for CF drugs. All funds distributed by the CFPAF are provided by grants from drug manufacturers. Visit http://www.cfpaf.org or call [phone].

http://www.cff.org/AboutCF/Faqs/#Are_there_programs_available_to_help_pay_for_CF_drugs_and_care?

Looks as though the bigger issue is the pharmaceutical situation. Firms obtain patents on drugs they develop, hence they are the sole source supplier as long as the patent is ion place.

[laundry_queen]

2. That may be true but they used a shitty example

Kalydeco is making a huge difference for those that it helps.

The reason for this particular combo of charity and pharmaceutical company is because the larger pharma corps didn't think that looking for a cure for CF was profitable (only 30,000 people in the US with CF after all), so instead smaller companies paired up with the charity, as they are willing to take a much lower rate of return than another big pharma giant. ALSO, this particular drug is one of the first CF drugs that treats the underlying defect in the CFTR (instead of just treating symptoms), so while it does cost a lot of money, in the long run, it could save Medicaid and other gov't programs millions if it manages to cut down the amount of expensive medication and treatments - and eventual lung transplants - CF people require daily just to stay alive.

So, find another example and I may pay attention.