Patient Access Network (PAN) Foundation was founded in 2004 to provide a way for uninsured or underinsured individuals to receive assistance to pay for their prescription drugs. This assistance helps to cover prescriptions that are not covered by a health insurance prescription plan, or for those who do not have prescription drug coverage on their current plan. PAN Foundation covers drugs designed to help patients manage chronic or terminal illnesses; these are often cost prohibitive for those without a good prescription plan. PAN Foundation is headquartered in Washington D.C.
- Less than one percent of revenue spent on fundraising activities
- Financial information is accessible to the public
- Strong social media presence
Included in PAN Foundations fundraising budget are both professional public relations and traditional fundraising activities. In 2015, the organization spent $1,045,538 on its fundraising activities, which is less than one percent of its annual revenue. This is an excellent indicator of fundraising efficacy.
Accessible Financial Information
PAN Foundation publishes its annual report of audited financial statements and IRS Form 990s on its website. This information is not as easily located in comparison to other organizations. We found that PAN Foundation publishes financial information from 2009–2015 on its site.
Interested parties are able to receive updates from the charity via an emailed newsletter or follow PAN Foundation on social media. The organization maintains accounts on Facebook, Twitter, Google+, YouTube, and LinkedIn. Regular updates from PAN Foundation occur at different rates on the different social media channels, with some being updated more frequently than others. For example, Google+ and YouTube are updated more frequently than Facebook and Twitter.
- Loss in investments
- High administrative expenses
- Negative press
The annual revenue for PAN Foundation has grown over the last several years. As the prices of prescription drugs rise, similar organizations also report a significant increase of annual revenue, rather than a significant increase in monetary donations from individuals. While these figures are not broken down in the organization’s reports, it is reasonable to assume that the rapid increase in revenue suggests the former, rather than the latter causal factor.
- 2015: $795,971,194
- 2014: $679,899,187
- 2013: $325,789,207
- 2012: $186,823,461
PAN Foundation operated with a deficit in 2015. The organization was required to use emergency cash to meet expenses, primarily its administrative expenditures. One of the reasons that may caused the deficit was a significant loss being reported from investments.
The payroll expenses for PAN Foundation are significantly higher than those for many other organizations, dollar for dollar. Many organizations do not include or provide salaries for all members of the voting board, and PAN Foundation does. The total cost of administrative expenses (salaries, benefits, supplies, office costs, etc.) for 2015 was reported at $4,188,007.
PAN Foundation states that it uses an average of 95 percent of its annual revenue for program delivery. Most charity watchdog organizations look for a 70 to 80 percent of revenue being used for program delivery as an indicator of responsible financial management and effective rates of program delivery. PAN Foundation exhibits responsible financial management with an exceptional annual average rate of program delivery.
In spite of this average, which illustrates superb program delivery, it is significant that the organization reported a significant loss in 2015 and was unable to meet its expenses, primarily those of its payroll.
Bloomberg Businessweek published an article in May 2016 with serious allegations against large pharmaceutical companies and their partnerships with co-pay assistance charities, such as PAN Foundation. According to the article, the pharmaceutical companies either create their own co-pay assistance foundation and use the donated or discounted cost of medication as a significant tax writeoff or donate to an existing co-pay assistance foundation, such as PAN Foundation and receive the same massive tax benefit.
The article also attributed these partnerships as the reason why prescription drug prices in the United States have skyrocketed, with price increases up to 600 percent during the last several years on some drugs. The pharmaceutical companies continue to raise prices to increase their tax writeoffs, increase their executive salaries, and grow their annual profit margin accordingly.
Charitable co-pay assistance foundations, such as PAN Foundation, receive the benefit of having higher donation values, which allows them to continue to increase executive salaries, etc. As such, what appears to many to be a worthwhile cause is sometimes more driven by the bottom line and revenue-driving motivation.