[Ip-health] Study on tax subsidies for donations of expiring drugs

[Mike Palmedo]

Press Release (Below)
http://www.waronwant.org/press/dd.htm

Full Report
http://www.waronwant.org/dd-report.pdf
-----------------------------------------

Embargo: 00.01am, April 3, 2002

Drugs for cash scandal exposed by Mark Thomas and War on Want 

New report launched to prevent Brown budget proposal leading UK down US
path of taxpayer-subsidised corporate greed

New US-style tax breaks, to be announced in the forthcoming budget,
could result in British drug companies such as GSK enjoying massive
publicly funded subsidies for simply offloading out of date or dangerous
medicines on the developing world.

A new report, written by Channel 4’s Mark Thomas and published by
anti-poverty charity War on Want, reveals that US drug companies have
been making money out of ridding their shelves of unsellable or out of
date drugs while gaining kudos from ‘charitable’ donations to areas
affected by humanitarian disasters.

Under US tax law companies can claim back twice the cost of producing
the drug. Given that inappropriate drugs are often unusable in the US,
and cost money to destroy, this represents a substantial reward for
clearing the shelves of unwanted stock.

On April 17, as part of the budget, Gordon Brown will announce
legislation to encourage drug donations. This is part of a package of
incentives designed to encourage research into, and development of, new
treatments for the three target diseases identified by the G8 and the
United Nations: malaria, TB and AIDS. But there is concern that unless
donations are regulated, tax concessions could result in the British
taxpayer subsidising corporate shelf clearance. 

Mark Thomas said: "Drug dumping by the pharmaceutical industry increases
the profits of drug companies and allows them to get rid of out of date,
inappropriate, useless products that are dangerous and cost NGOs money
on the ground to clear up. It's cynical, disruptive and a rip off."

Nick Dearden, War on Want Campaigns’ Officer, said: "We want drug
companies to register their donations publicly so that their
‘charitable’ activities can be scrutinised. We also want donations to be
determined by need, not by what companies want to shift off their
shelves."

A campaign is being launched on Mark Thomas’ Channel 4 show tonight,
April 3, calling for a publicly available register of drug donations.
Mark Thomas and War on Want urge the Government to avoid the pitfalls of
the US system, by ensuring that UK drug donations are regulated and
beneficial to their recipients. 

We will also be urging that tax credits should be geared to providing
the medicines needed on the ground. Donations should only be made based
on the recipient country’s essential drug list, or drugs specifically
required for a given medical emergency. There should be no donations of
out of date or short-dated drugs, and generic rather than brand name
drugs should be provided. Furthermore, tax credits should only cover the
cost of the donated product. 

During the famine appetite stimulants were dumped on Sudan by US drugs
companies, while in Lithuania worming medicine meant for animals has
temporarily blinded women. In Bosnia, so much useless stock was dumped
on the refugee camps that £34 million had to be spent on incinerating
it. Donated drugs are often out of date, not relevant to the emergency
situation, unfamiliar to local medical practitioners, or unsorted and
unlabelled. 

The Mark Thomas Product will be broadcast on Channel 4 at 11pm on
Wednesday April 3.

Notes for editors

Contact Nick Dearden, War on Want Campaigns Officer, on 020 7620 1111 or
07932 335464 or Geoff Atkinson at Vera on 020 7436 6116 for more details
and comment. 
For a copy of the report please contact Nick Dearden. 
War on Want is an anti-poverty and development charity that celebrated
its 50th anniversary last year. 
Full details on the campaign are available on the War on Want website.