Charity Funded by Drugmakers Draws IRS Probe on Tax Exemption
- Government says Chronic Disease Fund was ‘conduit’ for donors
- IRS seeks records from Roche, Biogen and other companies
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The U.S. Internal Revenue Service has opened a probe into the tax-exempt status of a charity funded by pharmaceutical companies, threatening a lifeline the industry uses to help patients buy expensive drugs for cancer, multiple sclerosis and other diseases.
The agency is exploring whether the Chronic Disease Fund, a patient-assistance charity funded largely by drugmakers, gave “impermissible” benefits to its corporate donors, according to federal court filings. An IRS analysis found that 95 percent of the $129.3 million the charity spent on co-payment support in its public programs in 2011 went to patients taking drugs made by the very companies that had donated the money, according to court papers.