E-drug: What Motivates Drug Donations?
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Dear e-druggers:
Please pardon the length of this message.
Scott Hillstrom, in a January 22 message, made many allegations
against the donations community. Initially, we thought it best to let it
be. But on reflection, we decided that the record must be corrected,
lest E-druggers infer that Mr. Hillstrom's numerous incorrect
statements might be true.
So, asking your patience, I offer the following on behalf of The
Partnership for Quality Medical Donations. PQMD is an alliance of US
relief agencies and donor firms working for quality donations and
sound regulatory policies affecting them.
Mr. Hillstrom's chief allegations may be summarized as follows: (1)
The US donations community opposes the WHO Guidelines. (2) US
tax law "creates perverse incentives" that reward drug firms for
donating drugs they can't sell. (3) Relief agencies can't say no to
donations good or bad, and they're poorly managed. (4) Inappropriate
drug donations come primarily from US NGOs.
The truth may be summarized as follows:
(1) PQMD endorsed the 1999 Guidelines. Moreover, we support US
legislation to codify them. (2) The US tax code denies a charitable
deduction on a drug the donor can't sell, whatever the reason. (3)
Leading relief agencies regularly turn down donations they can't use,
and donors prefer to work with them. (4) The evidence, though
spotty, suggests that most inappropriate donations do not come from
"mainstream" companies or relief agencies.
Let me elaborate a bit on each of the above points.
(1) Mr. Hillstrom asserts that "relief organizations, some
pharmaceutical companies, and others who would lose economic
benefits generally oppose [the WHO Guidelines.]" PQMD helped
re-draft the 1999 Guidelines and endorsed them, last April. Last
November, the International Federation of Pharmaceutical
Manufacturers Associations endorsed them. We know of no
organization that now opposes the Guidelines, and we're frankly proud
that we took a role leading to that result.
(2) Mr. Hillstrom repeats the old canard: "Donors receive tax
deductions and are spared the cost of disposing of drugs they can't
sell." The facts: the US Internal Revenue Service allows donors to
deduct a small percentage of a donated product's "fair market value."
Not its "wholesale price" as Mr. Hillstrom claims, but what if anything
it could actually be sold for. Therefore, if a drug approaching
expiration has no "fair market value," the deduction is zero. Nothing.
The other rationale Mr. Hillstrom advances to explain bad donations is
avoidance of disposal costs. Imagine: high-profile, highly profitable
American firms whose futures depend on their stature in world
markets, jeopardizing their reputations to avoid disposal costs -- costs
that are so relatively tiny that they do not merit a line on their balance
sheets. A single story in the press detailing such a tactic would be far
more costly than the cost of disposal -- which, by the way, is a
tax-deductible business expense.
(3) The report charges that relief agencies "accept whatever gifts that
donors have available to give," even if "inappropriate, outdated, or
improperly labeled..." That's not our experience. Responsible relief
agencies regularly decline products they don't need. Responsible
donors, knowing that donations accepted by such agencies are utilized
responsibly, prefer them.
(4) Many believe that the people responsible for inappropriate
donations have been identified, but in fact surprisingly little has been
done to actually pinpoint (and educate) them. One scholarly attempt
was the little-noticed May 1999 WHO EURO report on Macedonia. Its
conclusions:
"The donations from well known NGOs are of best quality and comply
with international guidelines for donations. Governments and small
NGOs seem more likely to send nearly expired, non-essential and
brand name drugs, sometimes with labels only in the donor countries'
own languages. Some countries send physician's samples in very
small quantities."
Clearly, more research is needed.
Toward the end of his philippic, Mr. Hillstrom accuses relief agencies
of all manor of malpractice, i.e., they "typically" exercise no control
over donated drugs, "maintain few records," inflate the value of
donations and charge each other too much when sharing them. The
relief agencies I know follow state-of-the-art inventory management
and accounting practices. They send nothing to disaster scenes until
they know what is needed. They maintain contact with the MOH and
the cooperate with one another. People who have contrary information
should be contacting the agencies involved, along with WHO, PQMD
and IFPMA -- rather than smearing the donations community as a
whole.
Perhaps Mr. Hillstrom's most uninformed assertion is his first -- that
donors and relief agencies have been unresponsive to concerns that
have been raised.
The facts:
Last March, WHO staff kindly gave PQMD the opportunity to meet
with the interagency group that drafted the 1996 Guidelines. We
came to that meeting with specific suggestions, and they were largely
accommodated -- whereupon we endorsed the Guidelines.
Last September, US Congressman Lloyd Doggett sought PQMD's
views on his draft bill to discourage inappropriate donations by
denying them tax deductibility. We suggested changes to make the bill
consonant with the WHO Guidelines. Again, most of our suggestions
were adopted, and we endorsed the bill. Mr. Doggett kindly
acknowledged PQMD's support in his remarks on the House floor
November 3.
Much remains to be done, of course, including targeted actions to
identify all private and governmental organizations whose practices fall
short and help them make changes. But not only criticism is needed.
Donated medical supplies and services are a vital part of the health
care picture in many places, and organizations that do donations right
deserve recognition and encouragement to do more. We invite
e-druggers to contact PQMD when they have questions and
suggestions to improve our work.
But most of all, it's time to call a halt to innuendo-filled, uninformed
attacks on the donations community as a whole -- and the tedious
responses they provoke, including this one. Disaster victims and
deprived patients deserve much better, from all of us.
Respectfully,
James B. Russo
Executive Director
The Partnership for Quality Medical Donations
146 Koenig Road
Bernville, PA 9506
USA
610 488 8303
610 488 7036 (fax)
e-mail: JBRusso@aol.com
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