Patrick Kennedy profits from opioid-addiction firms

- April 17, 2018

Patrick Kennedy, the former Democratic representative and scion of the liberal political dynasty, has emerged as the unlikely go-to player for companies seeking to benefit from the Trump administration’s multibillion-dollar response to the opioid crisis, reaping well over $1 million in salaries and equity stakes in the firms.

The 50-year-old son of the late Sen. Edward M. Kennedy, who stepped down from Congress in 2011 amid his own decades-long battles with addiction and mental illness, is a high-profile mental health advocate who sat on President Donald Trump’s opioid commission.

At the same time, he’s served as the CEO of the behavioral health nonprofit Kennedy Forum, which is funded in part by major drug makers and addiction-treatment companies. He received more than $1.1 million in total compensation from the organization between 2014 and 2016. The Kennedy Forum declined to provide details on his pay for 2017.

Kennedy also sits on the boards of eight corporations deeply invested in Washington’s response to the opioid crisis, from which he said he collects director fees and holds an equity stake in the firms. Many of those firms — along with the dozens who support the Kennedy Forum — stand to benefit from fresh efforts in Congress and the Trump administration to combat the opioid crisis by expanding treatment and speeding anti-opioid drugs to market. In the meantime, Kennedy has met regularly with his former congressional colleagues to advocate for higher levels of spending.

The companies for which Kennedy is a board member range from CleanSlate Centers, which primarily provides medication-assisted treatment to patients with alcohol and opioid disorders, to Axial Healthcare, a tech startup that sells pain and opioid management products. InteraXon, a company that makes a “brain sensing headband” that promotes meditation as an addiction rehabilitation aid, lists both Patrick Kennedy and his wife Amy Kennedy, a former teacher, as advisory board members.

The many entanglements make Kennedy a one-man nexus of government, private-sector and patient-advocacy work, which he defends as an expression of his lifelong goal to erase the stigma surrounding mental health and addiction. He acknowledged that his battles for more government funding and broader use of medication dovetail with the financial interests of the firms he advises and several of the Kennedy Forum’s corporate backers, but said the treatments are also medically sound.

“We’re about promoting policy and it so happens that in the case of supporting that policy, some people benefit and so they support our efforts,” Kennedy said. “But to say that we’re doing what we’re doing to kind of promote them, that’s not my MO.”

He also waved off criticism of the personal income that he’s made from his work on behalf of the Kennedy Forum and as a board member for various corporations.

“I spent 22 years as a public servant, and most of my colleagues can attest, with all these demands on us as electeds, you’re not making money in government,” he said. “I feel very grateful that I have the chance to continue to work on the issues I’ve always worked on and make a living for myself and family.”

Despite his extensive advocacy work, Kennedy said, he has not registered as a lobbyist because his activities don’t meet the legal specifications of lobbying.

“I think it can be said to be lobbying,” Kennedy said. “But that’s got such a pejorative sound to it, because we’re not lobbying for any specific interest to game some government contract or get some footing.”

Ethics specialists say the line between lobbying and advocacy can be blurred. But Roger Colinvaux, a Catholic University professor and expert on nonprofits, said that as long as Kennedy stops short of pushing for a specific piece of legislation, he’s free to advocate for policies or funding without crossing into lobbyist territory.

“Lobbying is a pretty technical term,” Colinvaux said, adding that advocates “can meet with members and talk about policy … if the whole purpose is to educate the public, and that would include members of Congress.”

Still, nonprofit specialists raised questions about who Kennedy is effectively representing in meetings with lawmakers or administration officials, and about the transparency of the Kennedy Forum’s funding. Kennedy also give frequent speeches for which he said he’s typically paid between $15,000 and $40,000 apiece. He declined to estimate how much he makes per year from those speeches, but said they also give him the opportunity to promote his 2015 memoir.

“He’s got good intentions, but also is willing to take money from those who will expect him to do pretty much what he’s doing — which will benefit them either indirectly or directly,” said Paul Streckfus, a former IRS agent and expert on tax-exempt organizations. “Charitable giving by corporations is also about getting.”

Kennedy Forum Chief of Staff Kara Kufka declined to disclose the largest financial supporters of the organization, which in 2016 reported revenues of a little over $1.1 million and currently employs five people. She also would not reveal how much the Kennedy Forum receives from drug lobby PhRMA or major drug makers like Janssen Pharmaceuticals — which is facing a lawsuit over allegations it contributed to opioid crisis — and Eli Lilly, which is developing a nonopioid pain drug aimed at beating back the epidemic. But Kufka said neither PhRMA nor the two drug makers have cumulatively donated more than $50,000 to the Kennedy Forum.

Those three are among the 39 sponsors that the Kennedy Forum discloses, a group that includes an array of health care companies, trade associations and foundations. But the actual number of sponsors is greater. Kufka said that “when donors wish to be recognized, they have been listed on our website.“ Others are not.

Nonetheless, Kennedy’s advocacy for anti-opioid drugs and medication-assisted treatment programs is likely to benefit a wide range of firms that make those products and provide those services, including some that support his nonprofit group. While nonmedication rehabilitation and recovery facilities have long dominated the addiction treatment space, Kennedy has provided a megaphone for more evidence-grounded approaches to countering substance use through medication.

“Bottom line is, we need more influence in this space,” he said. “I’m happy to be one of them, and I don’t mind doing what I know best, and that’s how to organize efforts to get a desired result.”

For instance, Kennedy met with Labor Secretary Alex Acosta in November to press for greater enforcement of so-called parity laws requiring insurers to pay for mental health services, including opioid addiction treatment, on the same basis as other medical or surgical benefits. The meeting, which came out of his stint on Trump’s opioid commission, prompted Acosta to commit to supporting legislation expanding the Labor Department’s enforcement authority, Kennedy said.

He also touted his longstanding ties to the Trump administration’s mental health chief, Elinore McCance-Katz, a former state official in Rhode Island, which he represented in Congress, who now runs the nation’s Substance Abuse and Mental Health Services Administration.

“I’ve had the chance, obviously, to be with her on a number of occasions and work with her, and I’m a big fan of what she’s trying to do,” Kennedy said, characterizing their relationship as “symbiotic.”

“I whacked the administration for not putting more money behind [the opioid crisis response],” he added. “But I always say, if there’s anyone who knows how to spend it, it’s her.”

SAMHSA spokesman Chris Garrett said Kennedy and McCance-Katz have had one phone call since she took office, and that it was about a now-defunct program. They’ve also attended the same event on three separate occasions.

Kennedy said he’s spoken recently as well with lawmakers including Sens. Bill Cassidy (R-La.) and Rob Portman (R-Ohio) about forcing insurers to cover more mental health treatments. Cassidy said he spoke with Kennedy a couple weeks ago, but didn’t get into the details of the complex issue. A representative for Portman said he has never had an official meeting with Kennedy, but that he spoke at a Kennedy Forum event alongside Kennedy last fall.

Kennedy has also gone on the road to push state officials to toughen oversight of mental health coverage — where his family name and status as a celebrity who has wrestled with mental illness and substance abuse tend to draw crowds.

“I think his name and his work sort of precedes itself,” said Alexis Horan, the vice president of government relations for CleanSlate, for which Kennedy is a board member.

She recalled an open-house event that CleanSlate hosted at a new treatment center in Philadelphia. Because Kennedy came to speak at that opening, Horan said. Philadelphia Mayor Jim Kenney also showed up.

“These aren’t people who might come to see any old treatment program,” she said. “That’s Patrick’s value.”

Horan testified at a March hearing by the House Committee on Energy and Commerce, for which Kennedy was also slated to testify, an invitation she said she was “thrilled” to receive as CleanSlate pushes for legislation raising the cap on the number of prescriptions physicians can write for the anti-opioid drug buprenorphine.

Horan said she doesn’t believe Kennedy engineered the invitation, but that she nevertheless appreciates any doors Kennedy can open for medication-assisted treatment providers.

“I wouldn’t say that was because of our relationship with Patrick,” she said of the hearing invitation. “If that helps, I can’t say it bothers me.”

CleanSlate declined to say how much Kennedy is paid for his work on the board, but acknowledged donating an unspecified amount of money to the Kennedy Forum.

Kennedy himself is unapologetic about receiving financial backing from companies with a stake in the policies he favors, arguing that the funding is necessary in a space where the government has devoted precious few dollars to addressing mental health issues. He describes his vision for the Kennedy Forum as an “AFL-CIO for mental health” that can serve as a national force for a disparate advocacy community that’s traditionally had little influence in Washington.

“Ultimately, I want to build a movement, and we’ve got to get money behind it,” Kennedy said. “I’m not running away from it. I’m fine with it.”

Many companies associated with Kennedy and the Kennedy Forum declined to reveal either his compensation or their donations to his non-profit, but some offered a few details.

An Eli Lilly spokesman said the company donated $25,000 to the Kennedy Forum in 2014, but has not contributed since then. A representative for Janssen disclosed a $5,000 payment the firm made in 2017 to sponsor one of the Kennedy Forum's events.

Braeburn Pharmaceuticals, where Kennedy is also a board member, disclosed in regulatory filings that it initially committed $900,000 to a separate nonprofit that Kennedy co-founded in 2016 called Advocates for Opioid Recovery, which promotes combating opioid use disorder through medication-assisted treatment. It contributed another $200,000 to the group in 2017, a spokesperson said. Kennedy said he does not receive any compensation from the nonprofit.

Braeburn makes long-acting implants that dispense buprenorphine to treat opioid use disorder.

Among the other firms for which Kennedy is a board member, InteraXon declined to disclose its financial agreements with Kennedy or his wife, citing its status as a privately held company. Quartet Health, a tech startup designed to connect patients with both mental and physical health care, and Pear Therapeutics — which is developing a digital-based treatment for opioid use disorder — also would not disclose Kennedy's board compensation.

Axial Healthcare, the mental health tech company Medibio and Utah-based addiction treatment center Recovery Ways did not respond to questions about Kennedy’s director pay.

Carol McDaid, a mental health and addiction lobbyist who represents several major addiction treatment organizations, lauded Kennedy’s influence in giving the advocacy community a voice on Capitol Hill — an environment where mental health issues are often still stigmatized.

“He will expend his own political capital on these issues, and a lot of times other [former] members that are lobbyists are a little more cautious about not burning up chits,” she said, adding that he’s more than justified in receiving generous compensation for his work. “Should you have to take a vow of poverty to work on these issues? No, I don’t think you should.”

For Kennedy’s part, he described his work over the last decade as the continuation of a congressional legacy defined by his successful championing of mental health parity requirements and simultaneous personal struggle with addiction — and a broader family focus on mental health dating back to President John F. Kennedy.

“My credibility as an advocate in this space comes from three places,” he said. “One, the author of parity. Two, someone with lived experience who has suffered from and grapples with the chronic illness of addiction and depression. And then the absolute unbelievable aspect of this all is that it was my uncle, who was the president to sign the most sweeping mental health reform over 50 years ago when he signed the Community Mental Health Act.”

That’s allowed him to assemble what he describes as a dream team of top researchers, medical experts and organizations to push for the policy prescriptions that provide the best chance at beating the opioid epidemic. And if anyone, from drug makers to trade groups to treatment centers, want to support that mission, so be it.

“What I’ve done is basically, I’ve got everybody on my team,” he said. “Like it or not, the name’s got the ability to do that. And that’s what I’ve used it for. And that’s why people give to me, frankly. They love the legacy. They trace it back.”


 

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