A relief convoy arrived in Tirana, Albania, last month bearing tons of antacids, antibiotics and multivitamins, all donated by American drug companies.
The shipment, destined for Kosovar refugees encamped on the Yugoslav border, also included almost a ton of a drug whose side effects could be dangerous under refugee-camp conditions and amid the greater chaos of refugees returning to farms, villages and cities ravaged by war.
The drug, Voltaren, is a powerful arthritis painkiller made by Novartis Pharmaceutical Corp. Its journey to Albania illustrates how well-intended U.S. tax laws encourage drug companies to make charitable donations that offer relief to their bottom lines but can endanger patients, create surpluses of unneeded or outdated medicines, and undermine local drug makers and doctors.
Albania's health ministry approved the Voltaren donation, and a trusted U.S. pharmacist in Albania asked for the drug by name. But the pills Novartis donated are three times stronger than those Albanian doctors usually prescribe, and the medication must be taken twice daily with meals, a diet regimen not guaranteed in refugee camps.
When it is taken by the book, the English-language label warns, Voltaren can cause sudden and fatal bleeding ulcers, particularly among "elderly and debilitated patients." In the United States, cautious doctors monitor blood and kidney functions when Voltaren is prescribed and may prescribe a second drug to reduce the painkiller's gastrointestinal side effects.
When Novartis donated the Voltaren, worth $2 million wholesale, the drug's sales were slumping, in part due to the success of Monsanto's Celebrex, a newer, less-expensive competitor that advertises fewer side effects. Regardless of the circumstances, under U.S. tax law the gift qualifies for double the normal charitable tax deduction because it is humanitarian: intended for "the ill, the needy or minor children."
Within the drug industry, charitable donations offer a way to reduce oversupplies of a drug, a practice dubbed "inventory purging." Such gifts also can be a way to build new markets, in which case they're called "venture philanthropy." Whatever the name, the result often is a rough and risky matchup of what donors want to give and what sufferers need.
"People who want to give medical help often don't know what's needed," says Dr. Nils Daulaire, president of the Global Health Council, a Washington-based alliance of nonprofit groups working overseas. "People who know what's needed often don't know how to get it."
Through the enhanced tax breaks, taxpayers underwrite all kinds of donations, from Merck & Co.'s campaign to vaccinate the Third World for free against river blindness to Ty Inc.'s contribution of 150,000 Beanie Babies to provide trauma therapy for Kosovar refugee children.
The tax breaks help explain why four drug companies are among America's five most generous corporations, according to Corporate Giving Watch, a philanthropy newsletter. The four -- Merck & Co., Johnson & Johnson, Pfizer Inc. and Eli Lilly and Co., in that order -- claimed $463 million worth of donations on their latest available tax returns.
Other drug companies, chain drugstores, hospitals and doctors contribute hundreds of millions more. So do private citizens, but their drugs, usually opened or expired, rarely reach disaster victims. After Hurricane Mitch, Nicaraguan authorities burned them.
When donations fit badly, it's often due to a mismatch between U.S. production and Third World conditions, in which diseases such as malaria, worms, diarrhea and tuberculosis are everyday killers. Of these diseases, only diarrhea is common enough to warrant a substantial U.S. drug inventory.
Often what's donated is a giant-sized version of an American medicine cabinet. The shipment that included Voltaren also contained Tylenol, sanitary napkins, iron supplements and 3 tons of shampoo. That was welcome, camp doctors report, but what refugees needed was anti-lice shampoo.
The combination of a highly publicized disaster and the tax incentives for charitable donations often produce huge drug surpluses. In Bosnia and Herzegovina, a staggering 18,000 tons of outdated, inappropriate or otherwise unusable drugs and medical supplies piled up between 1992 and 1996, according to estimates published in the New England Journal of Medicine. Incinerating them could cost Bosnia's ravaged treasury $34 million.
Doctors who work in disasters gripe about wasteful donations, but not openly. "To get the stuff they need, they know they have to be quiet about the junk they get," explains Oliver Davidson, a disaster consultant based in Washington. "So if the contribution isn't life-threatening, they tolerate it."
Taxpayers rarely learn of the inefficiencies they subsidize. After Hurricane Mitch, U.S. agencies airlifted to Central America thousands of liters of Pedialyte, a drink that rehydrates children with diarrhea. It's a water-based solution of oral rehydration salts, available in grape, fruit or bubble gum flavors, that costs $5.84 a liter wholesale. The value of the tax deduction is about $1.50.
But a packet of oral rehydration salts, a water purification tablet and water can also rehydrate children with diarrhea. That costs about 15 cents. The bottom line: If Americans want to treat infant diarrhea, buying the salts and tablets would do 10 times as much good as a tax break for donated Pedialyte.
An absence of regulations complicates the problem of matching what's available and what's needed. Market forces don't apply, because donated products are free. Most U.S. laws don't apply because the traffic is international. And internationally no effective laws exist, only two conflicting forces.
One is the United Nations' World Health Organization, which promotes an austere regimen of essential generic drugs. It's popular with Third World governments because the U.N. guidelines aim for maximum health benefits at minimum cost.
The other force is the pharmaceutical industry. Drug companies are the de facto rulers in many disaster situations because medical-aid groups are largely dependent on what the companies donate.
For Third World countries, that often means importing U.S. medical practices with U.S. aid, and that's not always economical or welcomed by local health officials. "We tend to overmedicate compared to Honduran doctors," says IMC Vice President Stephen Tomlin, reflecting on the group's Hurricane Mitch experience. "So, in the clinics of the countryside, American doctors came to be preferred because they gave out more medicine."
Attempting to redress imbalances between supply and demand, WHO issued new drug-donation guidelines in 1996 in an effort to: Deter donations within a year of the drug's expiration unless the recipient approves the short-dating.
Limit donations to drugs named on the recipient country's list of essential drugs or widely recognized alternatives.
Permit donations only of drugs specifically requested by recipients, such as health-relief agencies, hospitals and ministries of health.
Pub Date: 6/22/99