Facing wave of opioid lawsuits, drug companies sprinkle charity on hard-hit areas

The drug industry is spending millions in grants and donations to organizations in locations that have sued the companies over the U.S. opioid epidemic. Wholesaler Cardinal Health, for example, this year gave $35,500 to a nonprofit in Clermont County, OH, where overdoses have soared for more than a decade.

The drug industry is spending millions in grants and donations to organizations in locations that have sued the companies over the U.S. opioid epidemic. Wholesaler Cardinal Health, for example, this year gave $35,500 to a nonprofit in Clermont County, OH, where overdoses have soared for more than a decade. In all, the company has given at least $3 million to some 70 groups. Drug wholesaler McKesson, meanwhile, seeded a standalone nonprofit dedicated to fighting the opioid-abuse crisis with $100 million. Distributor AmerisourceBergen started its own opioid-focused grant program, and has announced a $50,000 grant to three Boise, ID-area hospitals to launch a program to help patients who overdosed on opioids. Companies facing lawsuits regularly seek ways to influence public opinion. Researchers at Harvard Business School who studied 20 years of lawsuits against public companies found that targeted local advertising increased by 23% after lawsuits were filed, and that they increase the probability of a favorable outcome. Corporations can deduct or donate up to 10% of their annual taxable income. But a company can violate self-dealing rules if giving is seen by the Internal Revenue Service as using its charity to benefit the company, including paying debts or fines, said Marcus Owens, a partner at law firm Loeb & Loeb LLP and former director of the agency's exempt-organizations division.