Drug, device makers pour money into MD foundations

With excitement growing about the role of philanthropy in healthcare after Warren Buffett's $30 billion gift to the Bill and Melinda Gates Foundation, the integrity of some tax-exempt charities with close ties to for-profit physician practices is being questioned. Critics say that medical device makers and pharma companies are using gifts to charities set by doctors they want to be close to as a form of "relationship funding." The New York Times looks at the example of the Midwest Heart Foundation, a charity set up by doctors at Midwest Heart, a for-profit cardiology practice, which has received large sums of money from medical device companies and drugmakers. Such grants and physician education programs are crossing an ethical line, opponents argue, by allowing money intended for non-profit uses to filter to the business side of practices.

Opponents are also pointing at the relationship between orthopedic surgeons and device makers as potentially problematic. The Times highlights the example of the Arizona Orthopedic Education Foundation, a charity set up by a Phoenix doctor with funds provided by the device manufacturer Stryker. Critics have long charged that such enterprises are ethically problematic. Yesterday, shares of orthopedic device firms ranging from Smith and Nephew to Stryker fell on word that the Department of Justice may be broadening an inquiry into the industry's marketing practices and relationships with doctors.

- see this article [1] from The New York Times

PLUS: More from the suddenly exciting world of nonprofit healthcare: Perhaps annoyed after having been upstaged by Warren Buffett and getting the boot from Harvard in the same week, Oracle Founder Larry Ellison says he is giving $100 million to the medical foundation that bears his name. Ellison is also telling the media that he decided not to go through with a $100 million gift to Harvard after the firing of president Larry Summers. Article [2]