Ronny Gal, Ph.D., a senior analyst at the investment bank Sanford C. Bernstein & Co., recently published a fascinating report on the size of pharmaceutical manufacturers’ charitable foundations. Ronny has graciously agreed to let me share the high-level results below.

Ronny and his team found that pharmaceutical manufacturers’ patient assistance programs (PAPs) account for 10 of the largest 15 U.S. charities and provided $6.5 billion of support in 2014. (See table below.) On average, the manufacturers’ financial support accounts for 8% of their operating expenses.

PAPs are controversial and closely monitored. As I argue below, their growth is linked to pharmacy benefit designs that shift prescription costs to patients. Many insured patients face economically-debilitating coinsurance—in some cases with no limit on out-of-pocket expenses. The programs are an imperfect, but necessary, fix to our imperfect drug channel system. Ronny has provided some valuable facts that show how important these programs have become.

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