PhRMA ends funding for high-profile addiction treatment group

A nonprofit that made ambitious promises to help people addicted to opioids is losing its biggest financial backer — the drug lobby.

PhRMA, which has provided the Addiction Policy Forum with about 90 percent of its funding, cut its donation from $8.1 million to $6 million this year. The lobby will end all support in 2020, PhRMA and the forum’s CEO, Jessica Hulsey Nickel, confirmed.

POLITICO spoke with eight current and former employees who stated that Nickel had poorly managed some of the millions the forum spent on a K Street office, a now empty, million-dollar high-tech Chicago call center, annual meetings and other projects.

Nickel — a lobbyist who has described growing up in foster care as her parents struggled with heroin addiction — denies the accusations of poor management, saying the digital health software and telecommunications infrastructure the forum bought for more than $1 million is still in use. “Not a dollar was wasted,” she said.

“We are making some changes to programs and priorities for 2020 based on the grants we received and the funds we’ve been able to raise,” Nickel told POLITICO. “It is categorically false to claim that we have misused or mismanaged money.”

Nickel founded the forum in 2015 and it quickly became a highly visible and unusually well-funded player in the addiction treatment world. Some other treatment groups criticized the group because its funding came primarily from the very industry that stands accused of seeding and fueling the addiction crisis, but Nickel said industry had a role in solving the crisis it helped create.

Money has poured into nonprofits in recent years as lawmakers called for action to help treat addiction, with 130 people dying of opioid overdoses every day. Hundreds of millions more dollars could flow into such programs with the settlement of the massive opioid litigation currently moving through the courts.

Current and former employees describe Nickel as a charismatic leader with a vision of bringing opioid addiction treatment to thousands nationwide. But one former employee said Nickel had a difficult time carrying through on objectives, and four former employees said the group’s relationship with PhRMA had grown tense by this year.

The current and former employees who spoke on condition of anonymity said they feared retribution by Nickel.

She defended the forum’s record of achievement, pointing to the establishment of a national database of treatment resources, the creation of toolkits for first responders, schools and families and the call center — although its hours were cut by more than half recently. About 7,000 people have contacted the call center over the past two years, according to presentations provided by the forum, although it’s not clear how many were steered successfully to services for opioid misuse. Nickel said such information couldn’t be released because “we don’t make any patient data publicly available.”

Nickel has loyal supporters, including the group’s board chairman, Jonathan Blodgett. “Whenever you grow fast like that in this field you are going to have people who are jealous of you, you’re going to have rivals,” said Blodgett, a Massachusetts district attorney.

Eleven other current employees and volunteers or consultants also reached out to support Nickel after she spoke with POLITICO.

“She was able to pull me into this amazing community where I was able to share the story of my brother and my family’s struggle and my experience,” said Lorraine McNeill-Popper, a volunteer with the group who lost her brother to addiction. Donald McDonald, a recovery consultant in North Carolina, told POLITICO he uses the nonprofit’s free videos and one-pagers to fight stigma and empower people in his state.

Nickel told POLITICO that the end of PhRMA funding was the natural conclusion of a three-year grant period and said the forum would continue its work through 2023 with “a diverse array of funding sources.” A spokesperson for PhRMA told POLITICO that while it was cutting funding, “we are confident that the organization will remain at the forefront of efforts to save lives.”

Nickel has described the forum’s work as a love letter to her father, whom she lost to heroin. Before creating the group, Nickel had been an aide to then-Rep. Rob Portman (R-Ohio), a staffer at the Office of National Drug Control Policy, and a lobbyist for Alkermes, which makes one of the three drugs approved to treat opioid addiction.

She was lobbying for Alkermes when she founded the Addiction Policy Forum in 2015, and most of the nonprofit’s $570,000 in revenues the following year came from Alkermes and Indivior, another opioid addiction treatment maker. Members of both companies have sat on the forum’s advisory board at times. In 2017, PhRMA donated $3.8 million to the forum, and touted a multi-year, multimillion partnership.

This fall the organization laid off four full-time employees and a number of contractors, and is moving its remaining 18 staff from K Street to a new headquarters in suburban Maryland, according to messages obtained by POLITICO. Nickel confirmed that four full-time staff jobs had been eliminated.

Even before the layoffs, the forum had experienced high turnover and a string of canceled or downsized projects, according to conversations with the eight current and former employees as well as emails, budget documents and staff records obtained by POLITICO.

PhRMA’s generosity gave the forum remarkably large resources for a nonprofit in the addiction world, but many of those dollars were wasted, said four former employees.

One source of contention was an ambitious project to establish a national call center, based in Chicago, to connect opioid users with help and recovery services. The call center’s objectives would have been lofty for any organization because of the difficulty of connecting people with substance use issues to appropriate, affordable treatment programs.

Nickel’s organization promised to create an around-the-clock call center, the Addiction Resource Center, with a 24/7 helpline and web portal. But while the forum’s website still advertised “speak with a counselor 24/7” as of Nov. 22, the center’s hours have been curtailed. Nickel said she still has at least one full-time staffer available during work hours to answer and direct calls.

The original vision for the center included telehealth services from licensed professionals to counsel people looking for help, but three former employees said the helpline was significantly pared down last year, including layoffs of the entire staff in a Chicago office envisioned as its national headquarters.

That 9,300-square-foot Chicago office, complete with high-tech telecommunications and data software, sits empty although the forum still pays the “ironclad” $1 million lease, according to a former employee — at least $15,000 a month, according to a copy of the 63-month lease obtained by POLITICO.

Nickel would not comment on the Chicago lease. The forum is paying a total of $527,000 this year to rent and lease various properties, according to a 2019 budget document.

A plan to have the forum appoint state chairs and set up chapters in every state was canceled in March, and the 50 volunteer directors, many of whom had been flown to Washington D.C. months earlier for a group retreat that cost more than $50,000, were notified by email that their roles would be discontinued, according to emails and documents obtained by POLITICO. They were instructed to instead sign up for volunteer committees within the nonprofit.

Nickel said a committee structure would allow more people to get involved in the nonprofit’s work. However, many of the committees have yet to materialize, according to two employees who left recently. Nickel, however, said the forum has more than 700 volunteers across the country.

Shortly after PhRMA funding began to wane at the beginning of 2018, Nickel announced more than $780,000 in cost-cutting measures — including eliminating the chief operating officer’s position and several other jobs. In an email to the board on April 7 obtained by POLITICO, she also described cuts to various employee benefits, and change in employee health insurance plans.

As the group was struggling over its funding and goals, one former employee said, several staff asked for human resources interventions with Nickel. Nickel yelled at employees, fired people who disagreed with her and frequently moved people to different projects and roles, sometimes in the span of weeks, according to conversations with six current and former employees.

Nickel sharply disputed sources’ critical descriptions of her management. “We have had training for the whole staff about being positive and mindful and making sure that we are kind to others even when they are unkind to us,” she said.

The forum instituted randomized drug tests in an office where many people working to help recovering users were also recovering themselves. But Nickel said the nonprofit connected employees to services and did not fire them if results showed drug use. The program was aimed at aiding recovery, said Jay Ruais, the forum’s chief of staff.

“I don’t think that we have fallen short on any of our objectives or strategic goals for the programs that we have put out there,” Nickel told POLITICO. “When we find an opportunity to improve and do it better, that’s what we do.”

Brianna Ehley contributed to this report.

CORRECTION: An earlier version of this reported misstated Nickel's earlier relationship with Alkermes. She was a lobbyist for Alkermes.