Side effects of medical donations


Charity: U.S. companies seeking tax breaks donate medicines that can endanger disaster victims and produce huge surpluses.

June 22, 1999|By Frank Greve | Frank Greve,KNIGHT RIDDER/TRIBUNE

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charitable donations that offer relief to their bottom lines but can endanger patients, create surpluses of unneeded or outdated medicines, and undermine local drug makers and doctors.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."

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