A Study of the Contraceptive Business at Planned Parenthood

Summary

The amount of profits generated from contraceptive sales by Planned Parenthood Federation of America (PPFA) was estimated as the result of a study of PPFA's operation. PPFA's profit percentage on contraceptive sales is 75.38%. PPFA has estimated annual contraceptive sales of $85 Million and an annual profit from the sale of contraceptives in excess of $64 Million.

In eight years of focusing on the activities and philosophy of the Planned Parenthood Federation of America (PPFA), we have constantly been faced with defining the true "business" of PPFA. We, like many others, became involved in the fight against PPFA because of abortion. It is the organization's outright insistence on totally unrestricted abortion that attracted our attention. We have found that PPFA is an integral part of the abortion scene. It has fought in the courts and in state and federal legislative bodies to secure what it calls the "right" to abortion. Reading its pro-abortion literature and advocacy has led us to observe many times that "Planned Parenthood has never met an abortion it doesn't like." But, PPFA has always contended that abortion is not its main business. That it performs less than 10% of all the abortions in the United States and that less than 10% of its income is derived from abortion. As a result of these claims, we began an investigation to determine "what is PPFA's business?"

This report is the result of that investigation.

Background

This study was performed by reviewing numerous Planned Parenthood documents, examining data published by the Family Planning industry in the United States, and commissioning and conducting independent research. The facts we have uncovered are surprising. This report is intended to make those facts public.

Planned Parenthood Federation of America has long been a champion of the use of contraceptives and other forms of birth control. The organization was originally named the American Birth Control League. We have found that PPFA puts a great deal of emphasis on the sale of contraceptives and on increasing the number of female contraceptive patients at its clinics. The data show the following growth in the number of female contraceptive patients seen at PPFA:

  • 1980—1,200,000(1)
  • 1981—1,300,000
  • 1982—1,350,000
  • 1983—1,400,000
  • 1984—1,450,000
  • 1985—1,500,000
  • 1986—1,600,000
  • 1987—1,650,000
  • 1988—1,690,000
  • 1989—1,720,000
  • 1990—1,804,000
  • 1991—1,813,000(2)

In reading PPFA material, it becomes clear that it considers the providing of contraceptives as its primary business. Further investigation revealed that PPFA's contraceptive business is composed of(3):

  • 83% - oral contraceptives
  • 9% - condoms
  • 8% - all other devices

Any look at PPFA's contraceptive business, then, is really a study of its oral contraceptive (i.e. birth control pill) activities. The remainder of this report will concentrate on that portion of its activities.

Retail sales

In dealing with oral contraceptives, a common reference is to a "cycle." A cycle is simply a month's supply.

At our request, the organization known as Pharmacists for Life did a survey to discover what its member pharmacies typically charged for a cycle of oral contraceptives. The actual charges varied by area of the country and by type of pill. Typically, pharmacies charge $23 to $26 for a cycle.

We then conducted an independent survey of a number of PPFA affiliates around the country. We found that Planned Parenthood affiliates charge $5 to $15 for a cycle. PPFA also offers its contraceptives on a "sliding scale fee" so that poorer women can receive the pills for less money (or even free in some cases).

It appeared, on the surface, then, that PPFA is, as the general public believes, an organization offering the Pill at severely discount prices to the women of the United States. An organization that sells the Pill below cost so women who want it can get it. Further investigation, however, proved this first impression to be wrong.

Wholesale price

As part of the survey described above by the Pharmacists for Life organization, we also received information on the price pharmacists pay drug companies for the birth control pills. Again, the prices varied, but the pharmacists typically paid $14 to $17 for a cycle. The pharmacists, then, paid more for the pills than PPFA was selling them for. The key question, then, was what does Planned Parenthood pay for the contraceptives? Does it sell them at a loss, or does it have some deal with the manufacturers to buy the Pill at reduced costs.

This question was answered for us by a reading of an issue of The Newsletter of the National Family Planning and Reproductive Health Association. The October 1991 issue of this newsletter contained an article decrying the increases in the costs of oral contraceptives. According to the article(4), family planning providers around the United States pay an average of $0.38 to $2.40 for a cycle of pills with most pills falling in the $0.65 to $1.40 price range.

The newsletter article specifically stated that the dollar figures did not include numbers from "Planned Parenthood or other non-profit grantees." The clear implication was that Planned Parenthood pays less than $1.40 for a cycle of pills that it resells for $5 to $15. If this information was accurate, it would put a whole new slant on Planned Parenthood's contraceptive business and would mean that PPFA receives a tremendous amount of profit from the sale of these devices.

We searched through hundreds of Planned Parenthood financial statements to see if we could get some handle on its profits from the sale of contraceptives. Unfortunately, PPFA's financial statements routinely include its pill business in a general heading of "Clinic Income" and "Clinic Expenses".

The infamous Form 990

Like most non-profit organizations, each PPFA affiliate files a Federal Form 990 each year. This form gives the financial information about the operation of that particular affiliate. As stated above, most PPFA affiliates include contraceptive business in its clinic business and do not report separate numbers.

However, we were able to identify one Federal Form 990 that did break out the contraceptive business separately. This Form was filed by Planned Parenthood of Dutchess-Ulster, Inc.(5).

According to this report, in 1985 Planned Parenthood of Dutchess-Ulster, Inc. purchased contraceptive supplies for $61,030. It sold these contraceptives for $252,015. In addition, the 990 form said that this affiliate started the year with a total inventory of $27,214 and ended the year with a $26,212 inventory(6). If we add the total inventory reduction to the cost of the contraceptives sold, this one affiliate of Planned Parenthood made a profit of $189,983 in one year from the sale of contraceptives.

A check of the operations of Planned Parenthood of Dutchess-Ulster, Inc. reveals that it operates just like other PPFA affiliates. Offering birth control pills at $5 per cycle (one of the lowest PP prices in the country) and also offering a sliding scale fee structure. Yet, even with all this, this affiliate made a tremendous profit from contraceptive sales.

As we have traveled around the country over the last year, we have tested our findings by talking about the profits PP makes from contraceptive sales. The recent response of a PP affiliate in Springfield, Illinois is typical. After we told reporters of the profit, they asked the local PP executive director about it and she confirmed our statement by saying: "Planned Parenthood makes money by selling contraceptives.(7)"

With our basic premise thus confirmed, we used the information from the NFPRHA newsletter and the specifics of Planned Parenthood of Dutchess-Ulster's operation, to make some calculations on PPFA's overall contraceptive business.

National sales

The latest data from Planned Parenthood Federation of America says that it has "almost 1.9 million contraceptive clients"(8). 83% of these clients purchase oral contraceptives. If each of these 1,577,000 women purchase contraceptives an average of six times a year, and pay an average of $9 per cycle, then contraceptives will represent a total income to PPFA of $85,158,000. The profit to income ratio of PPDU's 1985 Form 990 was... 0.7538.

Using this ratio, we calculate that contraceptive sales produce an annual profit exceeding $64,000,000 for PPFA.

Conclusion

Although the facts uncovered in this study were surprising to the researchers, they obviously present no new news to Planned Parenthood. The reaction of PPFA affiliate officers has generally been that of "okay, we already know that. Contraceptives are our business."

We find, however, that the general public is not aware of the tremendous profit made by PPFA on contraceptive sales. The intent of this report, then, is to bring this information to the public forum and to ensure that the true nature of Planned Parenthood's operation is made known.

References

  1. PPFA 1991 Service Report, page 5 and page 10 (early year numbers interpolated from graph to nearest 50,000)
  2. PPFA 1992 Service Report, Page 29
  3. PPFA 1991 Service Report, Page 7
  4. NFPRHA NEWS, Volume 10, No. 3, October - November, 1991, page 8
  5. Federal Form 990, Planned Parenthood of Dutchess Ulster, Inc., Fiscal Year 1985, Part IV line c and attached Statement of Functional Expenses
  6. Ibid, line 52
  7. THE STATE JOURNAL-REGISTER, Springfield, Illinois, October 8, 1993, page 11
  8. PPFA 1992 Annual Report, Page 3