In America today, being healthy does not just depend on what kind of insurance you have, how much money you make, or what your genetics are. Instead, the quality of health care Americans receive depends on the drugs, diagnostic tools, and medical devices available for treatment.
However, the availability of such tools depends on investment from pharmaceutical and medical device companies in research and development and clinical trials. In fact, because the government is largely uninvolved in the creation of new drugs, devices and treatments, and mainly only regulates these products, the main source for improving health care comes from private industry.
Americans however, still face tremendous difficulties receiving the treatments and drugs necessary to ensure a happy and healthy life. Some individuals do not have access to clinical trials because of geographic limitations. Patients in rural areas or inner cities often are unable to find health care institutions to provide them with the diagnostic tools and innovative treatments needed to address their medical problems.
Even more problematic is that individuals suffering from rare diseases (orphan) are frequently unable to get treatment because medicines are unavailable or stalled by regulatory tape. Additionally, patients wait and suffer as the Food and Drug Administration (FDA) reviews applications for drugs to be used “off-label,” even though in some cases, off-label use of a drug is the standard of care. The lack of certainty and predictability at the FDA in its medical device approval process, as well as the low number of drug approvals this past year, highlights the difficult challenges the healthcare industry faces in trying to improve the quality of care Americans receive.
Consequently, a number of non-profit foundations, charities, and advocacy organizations were created to address these challenges by providing grants and endowments to support medical research and to make available health care services to those in need. Additionally, many grants help provide unrestricted access to drugs, devices, and diagnostic tools relevant to specific health conditions, and help streamline and approve life saving medication for chronic and deadly diseases such as diabetes and AIDS.
An example of one major philanthropic foundation is the Bill & Melinda Gates Foundation, which regularly gives donations and starts initiatives aimed at improving global health. For example, in 2005, the Gates Foundation announced a $107.6 million grant to the PATH Malaria Vaccine Initiative (MVI) to extend a public-private partnership between MVI and GlaxoSmithKline Biologicals to develop the drugmaker’s malaria vaccine for children in Africa.
Despite the clearly beneficial effects these foundations have on improving deadly and debilitating diseases such as polio and malaria, a recent study from PLoS Medicine noted that one aspect of these organizations may be overlooked. The article raised concerns that philanthropic organizations can have links with pharmaceutical or medical device companies, which “could” constitute a conflict of interest.
Essentially, the authors use a framing bias throughout the entire article by stereotyping all corporations as organizations that negatively hurt patients based on the behavior of tobacco companies and other industries who have tried to influence public health, such as food, mining, and alcohol. Such an approach is problematic because the authors themselves recognize that, “corporations make products that can improve health (such as pharmaceuticals and vaccines) and relationships between public health institutions and for-profit corporations can be seen as positive opportunities for corporations to improve public health.”
Background on Private Foundations
In the U.S., private foundations must qualify for federal tax exemption. Unlike public charities, they usually do not provide services directly, but instead make grants to other entities to fulfill the foundation's mission. The authors noted that private foundations must not operate in a manner that benefits private interests. Private foundations may receive most of their funds from a parent for-profit corporation or wealthy individuals and families, sometimes in the form of investments (gifts of stock) and cash endowments.
Private foundations manage their endowments and grantmaking decisions in a variety of ways. Some foundations, like the Ford Foundation, have investment committees composed of members of the board of directors. Others may manage foundation investments externally or as a collaboration of professional investment teams with members of the board. In most cases, the board of directors is responsible for overseeing that funding decisions are made according to a set of foundation grant-making criteria. Typically these criteria are set by the founders and/or executive committee members, donors, and overall boards of directors of the foundations.
Study and Results
The study examined the five largest U.S. private and/or family foundations that focus considerably on global health, which included the Gates Foundation; the Ford Foundation; W K Kellogg Foundation; the Rockefeller Foundation and the Robert Wood Johnson Foundation, which is a philanthropic outgrowth of a Johnson & Johnson founder. The authors analyzed publicly available endowment disclosures with the U.S. Internal Revenue Service and stock holdings from the U.S. Securities and Exchange Commission. They also examined potential conflicts of interest of individual foundation employees.
The authors found that in some cases, board members of foundations also sat on corporation boards that my benefit from foundation grants. In addition, foundation grants were sometimes associated with companies that are represented on a foundation board and are among its investments and partnership. For example, the study noted that members of the Gates Foundation currently or previously were members of the boards or executive branches of several major drugmakers, including Merck and Novartis.
The study also found that the Gates Foundation had stock holdings in Berkshire Hathaway, which has significant ownership in GlaxoSmithKline, Sanofi-Aventis Johnson & Johnson. The authors also noted that the Gates Foundation held stock in Merck at a time when it developed partnerships with the African Comprehensive AIDS and Malaria Partnership and the Merck Company Foundation to test Merck products. Endowment investments in pharmaceutical and food companies were similarly observed among the Ford, Rockefeller, W. K. Kellogg Foundation, and Robert Wood Johnson Foundations.
Conflicts of Interest
After discussing these findings, the authors set out to address the issue of potential conflicts of interest within these private foundations. To do so, the authors adopted the World Health Organization (WHO) definition of “potential conflicts of interest.” Specifically, WHO recognizes that, “conflict of interest can occur when a Partner's ability to exercise judgment in one role is impaired by his or her obligations in another role or by the existence of competing interests.” Under this definition, WHO states that “such situations create a risk of a tendency towards bias in favor of one interest over another or that the individual would not fulfill his or her duties impartially and in the best interest.” Additionally, the definition states that, “a conflict of interest may exist even if no unethical or improper act results from it.”
Consequently, the authors recognize that “a private foundation clearly has the legal right to spend money however it wishes within the limits of the law.” However, the authors take issue with the fact that private foundations may “influence the future direction of what programs will be introduced into a foreign community.” In other words, the authors believe that since private foundations are not democratically elected, their decisions will not be in the best interest of the public, and those groups affected by such decisions have no remedy. As a result, they offer three recommendations.
First, they suggest that private foundations divest. Specifically, they recommend separation between investment management and the foundation's board. They also noted the idea of creating a “blind trust” so that the foundation leaders are not aware of their corporate investments and avoids the possibility that investment knowledge influences program decisions.
Second, they recommend transparency. In particular, that private foundations fully disclose actual or potential conflicts of interest, such as corporate affiliations (directorships, advisory panels, funding receipt) and personal investment holdings. The authors also asserted that when board members should recuse themselves from the discussion and decision when necessary and can resign from corporate boards and sell stock. It was also recommended that independent audits be used to routinely monitor the scope and management of potential conflicts of interest within private foundations.
Finally, the authors recommend that private foundations align their aid with community needs, and that foundation investment and program portfolios should incorporate representation from the intended recipients of its support.
While this study may have shown that board members on the world’s largest private foundations have multiple interests, the authors failed to show any direct or negative harm such interests had on public health. To the contrary, the authors acknowledged the exact opposite. Specifically, the authors recognized that private foundations contribute billions of dollars each year to improving global health, and without such funding, the world would certainly be in a worse position than it is today.
Accordingly, besides the clear framing bias, the assertions and conclusions from this article are problematic for one simple reason. As the authors acknowledge, they were unable to assess whether associations among board members resulted in a particular decision taking place. In other words, the authors could not assess or find any causal relationship between board members having multiple interest and their decisions to fund or give grants in public health. Given this tremendous weakness, many of the recommendations contained in their article should be considered skeptically. It is unfortunate but PLOS medicine a “Online Journal” has become a propaganda arm for those who think nothing that industry does is worthwhile.
At a time when costs of health care are spiraling, should we really be criticizing foundations for donating billions of dollars to help improve global health? Such criticism seems misguided and extremist. The money these foundations provide assist pharmaceutical development grants. For example, because of the grants provided by the Gates Foundation companies, such as Merck and GlaxoSmithKline have established partnerships to test:
- Pneumonia and rotavirus vaccines (such as the ROTATEQ partnership and the Merck Vaccines network partnership with the Global Alliance for Vaccines and Immunizations network)
- Experimental malaria vaccines (through Medicines for Malaria Venture, an NGO), cervical cancer vaccines (through PATH, an NGO, and Merck's vaccine Gardasil), and
- HIV interventions (through the Africa Comprehensive HIV/AIDS partnership).
Do any of these grants or endowments sound like potential conflicts of interest? In addition, Johnson & Johnson has entered a clinical partnership to develop new HIV-prevention technology, noting, “the work between Johnson & Johnson and the Gates Foundation is a strong, strategic, comprehensive relationship.”
Ultimately, the world must recognize that the bulk of the Bill & Melinda Gates Foundation's financial transfers in global health have been to programs developing medical technologies, with more than 97% of its financial disbursements directed to infectious diseases. While only 3% goes to chronic noncommunicable diseases, the Foundation has given $9 billion in financial transactions that went toward 1,094 global health programs between 1998 and 2007. Of this total, 42% was spent on health care delivery or increasing access to drugs, vaccines, and medical commodities, while an additional one-third was allocated to technology development (mainly for vaccines and microbicides) or basic science research, and the majority of the Foundation's grants are directed to researchers in the U.S.
These investments are made with one goal in mind: improving global public health. As Americans, we should be proud of the grants that these foundations are making to help the world and while transparency and mitigating potential conflicts are important, no evidence has suggested such actions are necessary. Yet foundations already have in place numerous measures to ensure the highest level of integrity in their funding decisions. As a result, we should be applauding the work of these foundations, particularly because of their emphasis in funding researchers in the U.S. If America hopes to remain competitive in health and science, the money these foundations continue to provide to U.S. researchers and global health efforts will be crucial for attracting and keeping the best and brightest talent in the world.