IRS Investigating Charity Funded By Pharma Companies: Where Are the Funds Really Going?
The Internal Revenue Service is conducting an investigation into the tax-exempt status of the charity called Good Days. Good Days—formerly known as the Chronic Disease Fund—is a nonprofit organization that aids in providing expensive drugs for cancer and multiple sclerosis, among other diseases to patients who cannot afford it, according to Bloomberg.
The IRS opened up an investigation into the organization largely funded by pharmaceutical companies to find out whether or not the organization gave “impermissible” benefits to its funders. According to an IRS analysis, Good Days spend 95 percent of $129.3 million on co-payment support in its public programs for patients taking the drugs made by these donating pharmaceutical companies. In the federal court filing, government lawyers said, “In effect, [Good Days] is serving as a conduit for its pharmaceutical manufacturer donors.”
To find more information about the corporate donations from 2011, the IRS has sent summonses to Genentech, Biogen, Johnson & Johnson, Teva Pharmaceuticals, Novartis and Bayer. Good Days’ lawyers attempted to halt the summonses in four federal courts, but government lawyers “laid out their position in court filings asking judges to deny [Good Days’] petitions,” Bloomberg said.
In an email regarding the investigation, a Good Days’ lawyer, Lisa Keenan, said, “[Good Days] has always operated in accordance with guidance issued by the Health and Human Services Department for such charities and in no way acts as a ‘conduit’ for its pharmaceutical manufacturer donors.”
According to the IRS analysis, Genentech donated $70 million for at least nine disease funds in 2011—almost all of seven of those funds went towards co-pay assistance to patients taking Genentech’s drugs. Furthermore, Celgene donated $48.8 million in 2011 to support a multiple myeloma fund, in which they were the only pharmaceutical company donor—98 percent of money in that fund went towards patients taking Celegene drugs.
To read full details about the investigation into Good Days, click here.