Monday, January 18, 2010

So Far, I Have Donated More to Haiti Relief Than Pharma (as % of Daily Income)

So far, global pharmaceutical companies have donated or pledged to donate about $9 million in cash and an additional $15 million or more worth of drugs or medical supplies to Haiti earthquake relief. Some have pledged to match employee donations as well (see table below for up-to-date numbers). The cash donation represents about 0.4% of the daily global sales of prescription drugs (IMS estimates global drug sales totaled $750 billion in 2008 or about $2 billion per day).

In contrast, Cheap Joe's Art Supplies -- where I sometimes shop -- pledged to donate 5% of the sales it made last Friday. Cheap Joe sent me the following notice by email last week:


If Cheap Joe can donate that amount relevant to sales, why can't the pharma industry do it too? Even I can afford to donate that much. I just donated about 4% of my daily income to the Clinton/Bush Haiti Fund. A few dollars more and I will reach 5%!

Here's my pharma Haiti relief tally so far (Feb 12, 2010):

pharma Haiti relief tally chart

If your company is not on this list, please let me know. If you have more correct, up-to-date data, also let me know. My email address is johnmack@virsci.com

P.S. Some companies (eg, Novartis) report a total contribution that includes the cost of drugs and medical supplies donated. Of course, those costs can be inflated manufacturers' suggested retail prices (MSRP) rather than wholesale prices or typical market prices.

P.P.S. Generic drug manufacturer Teva just announced on CNBC that it would donate $7 million worth of drugs to Haiti relief. $7 million is 5-30 times what brand drug companies are donating. I wonder how they calculated that number? Maybe they used the MSRP of the branded versions of their drugs? But it's all good.

P.P.P.S. Compared to pharmaco donations for the 2005 tsunami relief effort, the Haiti numbers seem small (it is estimated that total pharma tsunami relief was $170-180 MM). Here are some numbers from 2005 (see "Drug Companies Give Aid to Tsunami Victims"):
  • Pfizer will donate $10 million to local and international relief organizations operating in the region. Pfizer will contribute approximately $25 million worth of the company's healthcare products which includes the anti-infective products Zithromax, Zyvox and Diflucan.
  • Merck & Co. Inc. is giving $3 million in cash while Johnson & Johnson and Abbott Laboratories Inc. are each donating $2 million; each of the three are also sending drugs and other health care supplies to the region. Bristol-Myers Squibb Co. is donating $1 million in cash and $4 million in antibiotics and antifungal drugs. Roche Group and GlaxoSmithKline PLC were also planning to donate supplies and/or cash.

13 comments:

  1. Why are we so obsessed with the money? As I see it what is needed is coordination to make sure the help gets where it is needed.

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  2. Every relief organization as well as governments are appealing for cash donations as the most important way we can help. Some pharma companies -- eg, Pfizer -- say they are well-positioned to overcome logistical problems and help deliver supplies. However that may be, uncoordinated efforts like these may be the root cause of the current logistical problems.

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  3. Palio (@palio_saratoga) just sponsored a lunch that employees paid to receive. The company is going to match the funds raised and then send them to the relief effort :)

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  4. Anonymous11:15 AM

    John, I have great respect for your work, but you may be calling people to task prematurely, eg, "The cash donation represents about 0.4% of the daily global sales of prescription drugs...If Cheap Joe can donate that amount relevant to sales, why can't the pharma industry do it too?" In terms of impact on the company's bottom line, donating the proceeds from future sales is very different from donating existing drug supplies. Also, the sales figures are almost always the net amount, so what that 0.04% actual represents appears skewed. I think it is prudent for pharma companies to defer their total commitment until we get a better grasp of the long-term impact of this tragedy. Then they can make a determination on how much they are willing to contribute to a long-term effort over several years instead of a lump sum donation, which can be readily addressed by hundreds of other corporations.

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  5. You suggest that "pharma companies defer their total commitment until we get a better grasp of the long-term impact of this tragedy." Did pharma defer its commitment to tsunami relief in 2005 until after it had a better grasp of the long-term impact of THAT tragedy? It did not. According to this PhRMA press relase (http://www.phrma.org/node/178) within a few weeks of the tsunami in 2004, "An additional $111 million in cash, medicine and services has been contributed by America’s pharmaceutical companies to the global relief effort for tsunami-hit Asia and Africa, bringing the total so far to $172.8 million, up from $61.2 million just six days ago." The death toll from the Haiti quake is estimated to make it one of the top 8 of all time. What more needs to be grasped?

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  6. Anonymous1:52 PM

    Re: current efforts, I think Billy Tauzin's response described it best: "...The more the need for medicinal aid is defined, the more our companies are providing it." If anything, I think the article you identified supports my point; the press release was issued 2.5 wks after the disaster, not within the first 9 days, and the donations more than doubled over the 6 days at the end of the 17-day period. So I'm inclined to think the 'total donations' I refer to further increased after that initial period. Also, PHrMA's figures indicate the total industry amount was $20 million as of 1/19; their PR rep may have some info on how they arrived at that amount.

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  7. I hope what you say is true. There may have been a delay in 2004-5 because of the Christmas and New Year's holiday when a lot of pharma people who make these decisions are on vacation. I would, therefore, take a week off of the 2.5 and say the reaction time was closer to 10 days compared to 9 in this case. I will be keeping my tally.

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  8. Anonymous2:22 PM

    Me, too! If the response to Hurricane Katrina is indicative, the outlook appears promising: $25 million after 1 week, $100 million after 3 weeks, and $130 million at the end of 3 months.

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  9. Anonymous12:26 PM

    If companies publicize their donations, then they are doing it only for the PR.

    If companies do not publicize their donations, then it is assumed (on your table) that they gave $0.

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  10. That's a lot of bull! Every company that is donating SHOULD and probably DOES issue some kind of statement even if only to notify their employees who should DEMAND that their companies issue notices when they do anything that they can be proud of!

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  11. Anonymous1:41 PM

    John is right; most publicly traded companies are obligated to disclose sizable donations for any cause, if only to alert their investors. Therefore, in the case of the highest donors, the positive PR is only "the icing on the cake," so to speak. -Tanya in NY, NY

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  12. Anonymous1:59 AM

    John
    FYI - Abbott is now at $2.5 million cash, plus additional nutritional products (don't know the dollar amount on those yet)

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  13. Anon,

    Thanks for the info. Abbott announced "The company will provide $2.5 million in grant funding and donations of critical pharmaceutical and nutritional products to humanitarian aid organizations." -- see http://bit.ly/aeE3Ur

    It's not all cash -- in fact the announcement says "Initial support from the Abbott Fund for earthquake recovery efforts includes $150,000 in grants to four of Abbott's trusted humanitarian aid partners..."

    I left the $1,000,000 under the cash column (so far only $100,000 seems to have been released) and put the difference ($1,500,000) into the drugs column.

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