Gov. Wolf's biggest PAC donor includes money from secretive compounding pharmacies

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Gov. Tom Wolf received $1 million last year from Fairness PA. The PAC’s contributor include doctors and lawyers who own pharmacies.

Gov. Wolf has dozens of political action committees helping to fund his reelection, but one PAC towered above them all last year.

Fairness PA, based in Center City, poured $1 million into Wolf’s campaign coffer during the second half of 2017 — twice the total from  any other committee for the year.

When Democrat Wolf disclosed his biggest campaign donor in a required January filing, the low-profile PAC got brief mentions in the Harrisburg press as being funded by labor unions, teachers, Philadelphia-area lawyers, and prominent Democratic donors.

A closer analysis shows that Fairness PA has also become a channel for doctors and lawyers who own pharmacies to put their campaign contributions to use. Their donations are coming in as lawmakers debate a bill that could put an end to the controversial practice of pharmacies billing insurers for unproven pain creams that can cost $4,000 a tube or more.

The Republican-backed legislation would create a list of drugs, known as a formulary, covered under the state workers’ compensation program, similar to the lists used by standard health insurance plans, Medicare, and Medicaid to manage costs.

The latest version of the bill was introduced in October after an Inquirer and Daily News investigation found that workers’ comp lawyers and pain-management doctors have sent clients and patients to pharmacies in which they have an ownership interest, then billed their employers’ insurance providers for the expensive compounded creams.

Legal and medical ethicists say the ownership structures can raise serious conflicts of interests.

Five pharmacies and a consulting business affiliated with Insight Medical Partners, a Conshohocken firm that operates area pharmacies, contributed $125,000 to Fairness PA last year.

Pond Lehocky Stern Giordano — the large workers’ comp law firm that started its own pharmacy, Workers First, in 2016 — gave $87,000 to Fairness PA, in addition to $13,400 contributed by its lawyers and other employees.

(In December, the state Board of Pharmacy received an application to transfer 72 percent of Workers First to four new owners. None of the Pond Lehocky partners appear as listed owners under the proposed new ownership structure. That application, however, is still pending as of April 19, 2018.)

Fairness PA also received $42,000 last year from Pond Lehocky’s political action committee, Pennsylvanians for Injured Workers, whose donors include doctors from the Insight network and doctors with ownership stakes in the Workers First pharmacy. Attorney Sam Pond has been leading the opposition to legislation to create a workers’ comp drug formulary.

Wolf shares that position. His spokesman, J.J. Abbott, said the proposed bill would go far beyond curbing the overprescription of opioids, potentially making it more difficult for injured workers to get necessary medical treatment.

“We believe an injured worker’s access to benefits and treatment deemed reasonable and appropriate by their doctor could be negatively hindered and delayed by the proposed legislation,” Abbott said. “State government does not and should not interfere with the relationship between a doctor and patient.”

Fairness PA was created by local trial lawyers in 2015, primarily to support candidates running for the state Supreme Court that year. One of its early contributors, personal-injury lawyer Shanin Specter, told the Inquirer and Daily News in 2015 that he gave to the PAC because direct donations to justices could be grounds for recusal.

The committee spent just $100,000 in 2015. In 2016, it spent $585,000. Last year, that number increased to just over $1 million, due in part to the influx of money from pharmacy interests. Almost all the money went to Wolf, who faces a tough reelection battle this year. Pennsylvania is among those few states that impose no limit on campaign contributions from individuals.

Fairness PA’s treasurer, Adam Bonin, declined to say who solicits contributions for the PAC and who decides how the money is spent. He could not recall who named it but said it is not focused on any specific piece of legislation.

“Fairness PA is a statewide coalition of business leaders, labor organizations, progressive organizations, professionals, and other individuals committed to electing Democrats across Pennsylvania to executive, legislative, and judicial offices,” Bonin said. “We make our decisions by consensus.”

Wolf’s campaign spokesman, Jeffrey Sheridan, described it similarly: “Fairness PA is a statewide political action committee comprised of hardworking Pennsylvanians, including progressive organizations and business, legal, community, and labor leaders.”

Several Fairness PA donors contacted by the Inquirer and Daily News declined to comment on the contributions or did not return messages.

Larry Cohan, chairman of the Philadelphia trial lawyers’ PAC, Committee for a Better Tomorrow, said the organization contributed $25,000 to Fairness PA last year because “their objectives were consistent with ours.” Cohan said the contribution was not tied to any specific issue.

“There’s probably no progressive group that supports Democrats that hasn’t been addressing the complex issues relating to the workers’ comp legislation,” Cohan said. “I’m sure that group, along with others, cares very much about how those laws are developed.”

In July, Wolf attended a dinner at Del Frisco’s steak house in Center City sponsored by Insight Medical Partners. An invitation to the event called it an “exclusive dinner discussion” with Wolf. The RSVP was to Rishin Patel, a doctor and CEO of Insight Medical Partners.

Patel and doctors and pharmacies affiliated with Insight Medical Partners are being sued by Liberty Mutual Insurance and other insurance firms for prescribing $3.7 million in allegedly fraudulent pain creams. The suit says the creams, which are not approved by the Food and Drug Administration, cost between $5,000 and $8,000 a tube.

Sheridan has previously said the Del Frisco’s meeting was not a fund-raiser, but declined to elaborate. He said last week that the new financial support from doctor-owned pharmacies through Fairness PA has no bearing on the governor’s opposition to the drug formulary bill and that “any insinuation or claim that Governor Wolf’s position was not related to policy is completely ludicrous.”

Jeff Jubelirer, a spokesman for Patel and the Insight group, declined to comment on their political contributions.

Why are some pain creams so expensive?

This Pennsylvania Department of Labor & Industry PowerPoint slide describes a hypothetical price escalation of a compounded medication. In the workers’ compensation system, payments are typically capped at 110 percent of the Average Wholesale Price (AWP).

Camera icon Pa. Dept. of Labor
Pa. Dept. of Labor & Industry, Bureau of Workers Compensation

Fairness PA last year gave money to only one other officeholder, State Rep. Leanne Krueger-Braneky, a Democrat from Delaware County. She received $5,000. Krueger-Braneky is strongly opposed to the drug formulary bill and spoke out against it at a January committee meeting.

“This language has been problematic,” Krueger-Braneky said of the bill, raising concerns that it could make it more difficult for police, firefighters, and paramedics to obtain antiretroviral drugs if they are exposed to blood from someone who is HIV positive.

Krueger-Braneky’s spokesman, Joe Corrigan, said last week that she opposed the legislation because “politicians in Harrisburg shouldn’t be able to tell doctors and pharmacists what they can prescribe first responders and other workers who have been hurt on the job.”

The bill passed the Senate in October, but was defeated last month in the House with a 98-98 tie. It could be voted on again this month.

The Republican senators who introduced the legislation said in their legislative memo that it would address opioid abuse and end the “ethically questionable” practice of law firms and doctors profiting off medicines prescribed to their clients and patients. Sam Pond, whose email to doctors outlined such an arrangement, did not return a request for comment.

Democrats are united in opposition to the bill, which they describe as overly broad because it covers all drugs and treatments for injured workers, not just opioids.

“Governor Wolf has made tackling the opioid epidemic his top priority and continually urges the General Assembly to enact helpful legislation, but conflating these workers’ compensation bills with the opioid crisis is misleading and opportunistic,” Abbott said.

Abbott said he could not say whether Wolf would veto the bill if it is passed by the General Assembly.

Staff writer Dylan Purcell contributed to this article.

This article was updated to reflect a December application to the state Pharmacy Board to change the listed owners of Workers First Pharmacy.