The Greed Behind Project Deform

By David Pasquarelli

Magnus April 2000

They say those who fail to learn from history are doomed to repeat it. Nowhere is this more evident than in the world of AIDS drug promotion where, unable to comprehend the lessons of the 1980’s AZT poisoning fiasco, the gay community is now facing a new round of death and deformity due to rapidly-approved, outrageously-priced and widely-advertised protease inhibitor treatments. One organization, Project Inform, and one man in particular, Martin Delaney, its Founding Director, are largely responsible for this current desperate situation.

Back in 1996, I and other members of ACT UP San Francisco disrupted a forum on new drug guidelines at the International AIDS Conference to force media attention to our well-researched conclusion that protease inhibitors would cause untold suffering and death. Martin Delaney, however, presented his far more optimistic opinions in a mass-mailed fundraising letter for Project Inform:

“By now you probably know the good news: after negotiations with government regulators, we’ve finally won quick approval for a new generation of therapies for HIV/AIDS infected people. These are some of the most potent and promising drugs ever made available,” Delaney gushed. “We have a potential miracle in our hands and, with your generous help, we can bring it safely home.”

Deforming Miracles

Four years later, after record-breaking approval by the Food and Drug Administration and in the absence of any long-term survival data, it has become clear that protease inhibitors are anything but “miraculous” or “safe.”

The list of devastating effects caused by these experimental chemicals, prescribed for life as soon as possible after an HIV positive diagnosis, continue to grow. Sudden death from liver damage, kidney failure, heart attacks, strokes, and diabetes as well as metabolic abnormalities resulting in grotesque physical deformities like hunchbacks,  hardened, distended bellies and stick-like limbs have finally made headlines, albeit too late for many.

It is for these reasons that Delaney has lost the trust of many in the patient community and his organization, now known on the streets as “Project Deform,” is increasingly viewed as a threat to the health and well-being of people with AIDS.

A Question of Ethics

Oddly enough, soon before the protease inhibitor implosion hit the pages of magazines and newspapers across America, Project Inform quietly began circulating a draft document entitled Proposed Guidelines for Ethical Relations Between HIV Community Agencies and Pharmaceutical Companies.

The draft document was startlingly forthright in admitting that “industry of all types has long sought to influence government, the public, and in particular, advocates working in fields related to their products. Taken to an extreme, this effort can stretch the limits of ethical behavior.”

Clearly, both Project Inform and Delaney occupy a critical position in transmitting information to HIV-positive individuals from companies that sell profitable antiviral AIDS drugs.

Project Inform lobbies the government for the rapid approval and release of experimental AIDS drugs. Through its toll-free hotline, Project Inform volunteers recommend treatments and encourage frightened HIV-positive individuals to enroll in clinical trials of new drugs. Through its website, publications and local and national treatment forums, Project Inform promotes the latest AIDS drugs to a global audience. The HIV-negative Delaney even sits on AIDS research advisory panels to the National Institutes of Health and National Academy of Sciences - despite having no formal medical training.

Today, it is no secret that Project Inform receives considerable financial support from pharmaceutical companies. In 1998, Project Inform accepted nearly $500,000 from pharmaceutical companies out of $1.9 million in total raised revenues. Indeed, both Glaxo and Merck each made corporate contributions of $100,000 or more to the organization. Accusations that Project Inform has been corrupted by drug money have lingered for years in San Francisco. In 1995, I outlined how Project Inform’s mission had been severely compromised by the acceptance of pharmaceutical dollars in my essay Exposing Project Infirm (available at

With the protease dream transformed into a nightmare and the sudden emergence of Project Inform’s “ethical guidelines,” it appears that corruption of AIDS agencies may go far deeper than anyone imagined. While the guidelines could be viewed as a proactive measure to come clean before any verifiable improprieties surface, they seem more a skilled attempt to deflect attention away from specific ethical issues.

For example, under “Guiding Principle #1: Disclosure,” Project Inform recommends what has been largely commonplace: that grants over $5,000 be announced publicly; that educational materials purchased by drug companies be identified as such; that pharmaceutical and biotech funding be published annually along with the funding’s use; and that agencies develop public statements regarding industry support.

However, suspiciously missing from the document are concrete rules and regulations governing disclosure of personal income obtained from drug companies by executives and staff members of nonprofit AIDS agencies. While it is relatively difficult for highly scrutinized nonprofits to hide a large influx of pharmaceutical dollars, it is quite easy to conceal such payments transacted between private business entities and individuals.

Is it ethical for presidents, executives, board members and staff to secretly amass personal wealth through payments from drug companies or their hired public relations firms in the form of consulting fees, honoraria, in-kind donations and gifts, travel allowances and through stock options?

Of course not. Yet the silence shrouding this area of financial impropriety indicates that it is not only happening but that it is unduly influencing public opinion about the benefits and dangers of experimental AIDS drugs as well as the reasons behind their expensive price. The issue of concealed personal pharmaceutical payoffs becomes most relevant when executives of AIDS non-profits attempt to influence drug costs and public perception in ways that could be legally defined as price-fixing and fraud.

The Sustiva Scandal

For example, when the AIDS drug Sustiva was approved by the Food and Drug Administration in the fall of 1998 its maker, Dupont Pharmaceuticals, faced a carefully orchestrated campaign attacking its efficacy, side effects, and, above all, its price. The campaign was led by Project Inform’s Delaney and Gary Rose of the public relations firm Issuesphere.

The AIDS community assumed that this was just another skirmish in the battle over AIDS drug pricing. However, Delaney’s high-profile PR stunt was very different from previous protests, such as those over the initial $10,000 per year price of AZT.

Most importantly, Sustiva, at approximately $3,500 per year, was one of the cheapest anti-HIV treatments on the market. There were no protests when Merck priced its new drug Crixivan at about $4,000 per year and no screaming when Agouron priced Viracept, a similar protease inhibitor, at $5,600 per year then raised the price another 15%. There were no demonstrations over Roche’s Saquinavir priced at $6,000, nor over Abbott’s Norvir priced at $7,200 nor when Glaxo priced its new nucleoside analogue Ziagen at $6,100.

Yet Dupont’s Sustiva met with nationwide demonstrations and outright boycotts. Certainly it was to the advantage of Dupont’s competitors to be free to price their drugs as high as the market would bear without reprisals. It was also to their advantage to see Dupont, a new company just entering the AIDS field, battered in the public eye and forced to reduce its price and profits. A lower price on Sustiva meant more money from the limited funds of the AIDS Drug Assistance Program (ADAP) would be left for the higher priced drugs of Dupont’s competitors. Why pick on Dupont when it had the lowest priced new AIDS drug?

Surprisingly, Delaney claimed that since Sustiva was of a different chemical category from the others its price should be lower. Ordinarily, however, the factors that determine a drug’s price are cost of research, development and manufacture; efficacy and side effects; and market competition. Chemical category is as irrelevant to the price of a drug as color is to the price of a car. More relevant was the financial affiliation of the activist protesters. Delaney and Rose, the two leading individuals who orchestrated the anti-Dupont protests, were paid consultants of Dupont’s competitors or employed by AIDS organizations or public relations firms that received large donations or contracts from Dupont’s competitors. There is something fishy about activists and executives on the payroll of one drug company orchestrating campaigns to influence the drug pricing of a competitor in order to ensure high prices for all AIDS drugs.

Dupont Pharmaceuticals’ protracted fight with Delaney over the pricing of Sustiva took an unexpected turn last spring. Because activists led by Project Inform were hurting its market share in California, Dupont decided to court and lavishly reward the very people who had bashed them six months before. First came a million dollar donation to a dubious San Francisco AIDS prevention panel, a panel that could potentially become an extended job project for Delaney loyalists. Then Dupont sponsored gay pride month at KQED, a local PBS station, and kicked off the event with a dinner honoring Delaney as a hero of the gay community. No less a dignitary than Dupont’s CEO flew in to sing Delaney’s praises.

Given that AIDS drug manufacturers are less competitors and more collaborators in this age of “combination cocktail therapies” it appears that Dupont, the newest member of the AIDS drug cartel, decided it was in their profit-making interests to court rather than offend Delaney.

Public Silence = Personal Wealth

For the last decade Delaney has been rumored to have been a paid consultant for several drug companies including Glaxo Wellcome and Merck, Sharpe and Dohme. When unsuspecting AIDS patients call the Project Inform hotline they believe they are being given objective treatment information from their peers. There is an unethical conflict of interest when pharmaceutical companies pay tax exempt community groups or their leaders to influence AIDS drug pricing or public perceptions about the benefits or dangers of their product or a competitor’s. When patients pay for their drugs they do not expect that quietly compensated AIDS executives have conspired with pharma-ceutical companies to keep drug prices exorbitantly high.

To prevent fraud, price gouging and the victimization of people with AIDS it is imperative that we have full disclosure of all pharmaceutical industry contributions - not only to nonprofit AIDS groups but, more importantly, to all AIDS organizations’ executives, board members and employees.

Therefore, as a public demonstration of their commitment to ethical conduct, I challenge Glaxo Wellcome and Merck, Sharpe and Dohme to publicly disclose all payments and remuneration made over the last ten years to Founding Director Martin Delaney and Project Inform Treatment Information Advocates Brenda Lein and Ben Cheng. I also challenge Delaney, Lein and Cheng to make the same public disclosures by having an independent auditor confirm their IRS tax returns for this time period.

As the sky-high cost of protease inhibitors continues to gobble up more public resources while they injure and kill more patients, it is critical that we pull back the curtain and expose the behind-the-scenes payoffs that fuel the AIDS industry’s engine.

Only by demanding full disclosure from nonprofit AIDS industry executives can we hope to prevent a repeat performance of the AZT/protease inhibitor debacles - taxpayer-funded disasters that will certainly go down as two of the worst examples of medical corruption in American history.