FDA, CDC, NIH all have Foundations to Collect Industry Money to “Advance their Missions”

I blogged (here and here) about how the Inspector General System, set up by Congress to provide independent oversight of the 70 plus executive branch federal agencies, has been prevented from doing its job during the Obama administration.  In this post I discuss another way 3 federal health agencies (FDA, CDC, NIH) have been redirected from their public mission: private slush funds (Foundations) exist for each of the agencies.  In other words, there is a private back-channel for money to come in and go out from these agencies. To what purpose?

“… the Foundation provides a unique opportunity to bring all parties to the table (FDA, Patient Groups, Academia, other Government entities, and Industry) to work together in a transparent way to create exciting new regulatory science… “ [And yet, the mission statement goes on to claim] “… it [the Foundation] does not participate in, nor offer advice to the FDA on regulatory matters or policy issues.”

Fabulous.  “Exciting new regulatory science” in the current FDA context, means less careful drug/device approval. Over the past few years FDA has introduced 3 new pathways by which a drug, vaccine or medical device can be approved faster, and with less evidence than before. A new FDA Commissioner is expected to be confirmed soon by the Senate, despite his industry connections (he was paid by seven pharmaceutical companies in the year before his 2015 temporary FDA appointment).  He has called for more efficient, faster drug approvals.

Using a Foundation to transfer funds is certainly not the only means by which industry has its way with the executive branch agencies, but it is instructive nonetheless to see who donates and how much.

For the FDA Foundation, six pharmaceutical companies paid $350,000 each in 2013, two entities paid $400,000 each and one $500,000.  The following were named (page 17) while others were unnamed in the tax return.

 Eli Lilly $ 400,000.00
 AstraZeneca 350,000.00
 GlaxoSmithKline 350,000.00
 Johnson & Johnson 350,000.00
 Merck 350,000.00
 Novartis 350,000.00
 Pfizer 350,000.00

In its 2014 tax filing, 5 unnamed entities gave the Foundation $500,000 each.

Do these amounts look like voluntary donations?  Why are the amounts so similar?  They look more like some sort of “tax” or “tithe” the companies were told to pay.  Is the Foundation the FDA’s “enforcer”?

One liability in the 2014 tax return was for $255,000–a “grant refund payable.”  Did FDA fail to carry out the conditions of the grant?  What conditions might those have been?

And check this out:  even though the FDA Foundation (Reagan-Udall Foundation for the FDA) is a 501C3, the FDA pays its operating expenses:

“Core Operations will be run on a day-to-day basis by the Executive Director and will be funded through:

  1. FDA funds specifically prescribed under the statute to be appropriated to the FDA and then transferred to the Foundation ($500k-$1.25m)”

While the FDA Foundation collects over $4 million a year, this turned out to be peanuts.  The CDC Foundation received over $42 million in “donations” in 2013.  The NIH Foundation received almost $73 million in 2014.  What did these funds buy?

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