E-drug: Re: Proposed Donation Legislation in the UK
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E-Druggers,
I propose to prepare a letter for submission to appropriate
authorities concerning the proposed drug donation legislation in the
UK. If you are interested in contributing to and signing the letter,
please send me your comments. Perhaps we can add some clarity
to the debate.
Scott D. Hillstrom, J.D.
President
Sustainable Healthcare Enterprise Foundation
(formerly known as Cry For the World Foundation)
Suite 1800, Rand Tower
527 Marquette Ave.
Minneapolis, Minnesota (USA)
+1-612-730-5884
scott.hillstrom@analyticorp.co.nz
www.cryfoundation.org
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Some of you may recall spirited discussions a couple of years ago
between Jim Russo of the Partnership for Quality Medical
Donations in the US and myself. The *question* I raised was
whether US drug donors were willing to disclose information that
would make it possible to determine whether their purported
support for the WHO Guidelines was matched by their donations -
whether their deeds match their words. The *answer* was NO. US
companies have not publicly disclosed this information. Meanwhile,
inappropriate, outdated, and mislabeled drug donations from US
companies continue to flood into developing countries.
Now, like the US, the UK plans to grant tax concessions to drug
donors. The *purported* intent of the legislation is the make
needed medicine available to the world's poor. That is a good and
noble intent that we should all support. Another intent is to transfer
money from taxpayers to companies to encourage them to donate
drugs. That also is a noble intent for which poor countries will owe
a debt of gratitude to UK taxpayers. So there is little to debate with
respect to the fundamental intent of the proposed legislation.
Congratulations to industry, government, and taxpayers in the UK
for a good policy goal.
What *is* disputable is exactly *how* to put these good intentions
into practice. One does not blame a duck for swimming, flying, and
quacking. Its inherent in a duck to do these things. And one should
not find fault with a drug company that does all that it can to
maximize its profits--they are simply performing their duties to their
shareholders. It can't be helped that the *private* profit incentive
sometimes comes into conflict with good *public* policy. Any drug
donation tax scheme must be designed to reconcile this conflict. If
it doesn't, the scheme will be abused and result in the same kinds
of scandals that have been seen in the US. That would be bad for
MPs who put the scheme into law, bad for the taxpayers, and bad
for the companies who follow the rules since they would be tainted
along with those who don't.
Corrupt practices can only take place in secrecy. Total transparency
makes them nearly impossible. What company would say they
followed the WHO Guidelines, knowing that they don't, if the
details of their drug donations were published on the front page of
the Times? Knowingly making bad donations would be tantamount
to a confession. That's why it is axiomatic that, where the use of
public funds are concerned (as contemplated in the proposed
legislation), *how* those funds are used must be transparent. What
MP would vote for legislation giving a blank check to industry so
that it could secretly spend taxpayer funds in its own self-interest?
Yet, that is the effect of the proposed legislation if *effective*
transparency is not required.
US tax law attempted to address the potential for abuse of public
funds by imposing certain requirements on drug donors. For
example, tax concessions are granted only when a drug donation
fits within the charitable purpose of an organization that receives
the donation. And documentation to that effect is required. But, in
practice, these safeguards are not effective. Anyone who has seen
the flood of bad donations arriving from America in the developing
world can attest to it.
Similar safeguards are under discussion in the UK (e.g. requiring
that donations comply with WHO Guidelines). It's a good idea and
such safeguards should be in the law, but they won't solve the
problem. There is a large amount of ambiguity in the interpretation
of such rules when put to practice. Imagine a tax auditor arguing
with drug company tax lawyers and clinical experts that a particular
donation should be denied the tax concession because it is
"inappropriate" under guidelines that even WHO says are only
guidelines. Tax enforcement authorities with limited resources
won't find it easy to beat the drug industry at this game. And, even
if they could, drug companies, like the rest of us, understand that it
can be profitable to violate the rules much of the time if we are
caught and penalized only rarely. Anyone who knowingly drives
over the speed limit understands how this works.
The most effective method to deter abuse is to make drug
donations transparent. Period. The law *must* require that
donations for which a tax concession is claimed be reported with a
public agency whose records should be open to the public. If this is
not required, it would be folly to expect anything better than the
dismal mess we already have in the US. The continuous exposure
to public scrutiny will assure that donors follow the rules because it
won't be possible to get away with breaking them. Anyone who
has slowed down in a speed camera zone knows how this works.
Drug donors should be presumed to do what is in their own best
interests like the rest of us do. There is no wrong in that. But it
*would* be wrong, knowing that, to give the drug industry a blank
check for public funds to be spent in secret.
--
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