Africa's Epidemic of Disappearing Medicine

The global system for public health donations has a crippling accountability problem.

BY ROGER BATE | JANUARY 11, 2011

On Oct. 29, Togo's health minister, Komlan Mally, reported that the government audit had revealed that roughly a third of the antimalarial medicines provided by the Global Fund, worth well over $1 million, had been stolen. What is worse, CAMEG's own chief financial officer is alleged to be involved. He, along with four other CAMEG officials, including another senior manager, an operations manager, a warehouse manager, and a storekeeper, are under investigation for theft and trading in stolen products. Several remain in Togolese custody, considered potential flight risks. The investigation is ongoing. But the losses are considerable. The Togolese government managed to recover some of the stolen drugs from the markets, but much has simply disappeared, possibly to other African markets.

Corruption can occur anywhere, and it is to the credit of the Togolese government, and to Assih of CAMEG in particular, that it has been relatively transparent about these problems. But the Global Fund never should have allowed malfeasance to reach this level. The organization took too long before sending investigators to Togo -- they arrived in autumn, months after the first credible reports of widespread corruption -- which meant the trail had gone cold well before they arrived. A more cynical interpretation, though, is that by acting slowly, much of the evidence of a problem had disappeared by their arrival.

Unfortunately, Togo is not an isolated instance of abuse. The Global Fund has a long history of problems with stolen funds and failing projects. In 2005, it suspended grants to Uganda for mismanagement, and in 2010 it stopped giving funds to Zambia's Health Ministry, preferring instead to work with the more transparent UNDP.

My research into criminal drug distribution has revealed a steady increase in stolen drugs over the past three years. As many as 30 million donated malaria treatments are "diverted" every year, leaving malaria sufferers to pay in private markets for poorly stored products they should have received for free. Unsurprisingly, criminal gangs are now gaining greater control over medicinal distribution systems in many emerging markets across the globe. Rich international donors, by exponentially increasing the formerly limited drug supply, have also unwittingly expanded the opportunities available to criminal drug traders, from Pavel Garg's team in India to the Bryntsalov family in Moscow. In short, this is a huge and growing problem. Yet the Global Fund grant system continues unchanged and unaffected by the evident corruption in the states that receive funding. Currently, the organization only temporarily cuts the flow of funds from Geneva before again turning the funding tap back on.

Theoretically, that could change in the near future. At next week's meeting, the Global Fund will convene law enforcement and health officials to draw up a plan to combat the problem. Their efforts, however, are likely to amount to mere talk. This is a problem that requires not bureaucratic hand-wringing, but the attention of an international criminal-justice organization like Interpol.

One model for the Global Fund may be the U.S. medicinal aid system, which controls its own drug purchases for the developing world far more tightly. First, unlike the Global Fund, the U.S. government doesn't simply provide funds to recipient countries. Rather, it comes to an individual agreement with each country regarding which drugs the country wants; then it buys the drugs and has U.S. contractors deliver the products to the government distributors. When it encounters a problem with public-sector drug distributors, as it has in Angola, it completely bypasses the troublesome actor -- in this case the Angolan government -- and looks for other private distribution networks, including direct handoffs from U.S. contractors to in-country clinics. The global health community doesn't approve of this approach, however, suggesting that it wastes funds that could in principle be used to treat more people. Perhaps, but it's indisputable that the drugs at least get to where they're supposed to go.

The new U.S. Congress is lead by a Republican Party that has promised to take a hard look at wasteful spending decisions. The Global Fund, and its broken distribution systems, would be a good place for them to test their mettle.

 SUBJECTS: PUBLIC HEALTH, AFRICA
 

Roger Bate, the Legatum fellow at the American Enterprise Institute, is writing a book on illegal drug markets.

JLIDEN

1:46 AM ET

January 20, 2011

A Half Truth on drug theft

Roger Bate has told half a story about drug theft. Let us complete the picture.

Theft of medicines is indeed a serious problem in both the developed and developing worlds. It is a challenge for all donors and aid programs for health. While the Global Fund to Fight AIDS, Tuberculosis and Malaria is aggressive about addressing the issue and speaks openly about the problem, it is not the only organization facing such challenges.

The Global Fund has zero tolerance for theft or fraud. Contrary to Mr Bate’s claims, the Fund is acknowledged (by the U.S. and other governments) to have one of the most rigorous mechanisms to uncover and tackle fraud and to recover stolen funds. Its Office of the Inspector General aggressively audits and investigates these issues and is at the forefront in the international community when it comes to addressing drug theft, diversion and counterfeiting. The Fund is continuously working with law enforcement and other agencies as well as with drug manufacturers to investigate claims of theft. The grant management side of The Global Fund works closely with the Inspector General to safeguard donor money once any form of misappropriation is discovered.

Mr Bate uses Togo to illustrate how donor money gets lost and suggests that the Global Fund has turned a blind eye in this country. Let’s get the facts straight. In Togo, the Deputy Director of CAMEG - a Togolese national procurement agency - and his accomplices were involved in the misappropriation of malaria drugs worth $849,832 from a program financed by the Global Fund. When alerted to suspicions of this theft, the Togolese national oversight body responsible for Global Fund grants took swift action. The government of Togo pledged to compensate for missing drugs and has since repaid the Global Fund most of the value of the stolen drugs. It is ultimately the Togolese tax payer who will pay for this theft , not international donors. While the theft is despicable, it is not a reason to withdraw continued support for the country’s efforts to fight malaria, since the entire population should not be punished for the actions of a handful of bad people. Equally important, this scandal has spurred the Togolese government - with the support of international organizations and foreign missions in the country - to analyse weaknesses in its drug distribution system and strengthen it so that the risk of theft in future has been greatly diminished.

Different remedies are required in different settings. In a few cases, temporary systems parallel to national ones are necessary to prevent ongoing losses. However, the solution to drug theft in developing countries is not to depend upon parallel systems but to work with countries and their partners to ensure that existing systems include appropriate safeguards. Long-term solutions lie in working with honest people to build secure and sustainable supply chains so that products reach the intended end users. To imply, as Mr Bate does, that only foreign oversight can secure drug distribution is an affront to the vast majority of honest, hardworking pharmacists, doctors and nurses who are successfully and conscientiously delivering drugs to patients in many countries around the world.

Perhaps Mr Bate focuses upon the Global Fund because it is so transparent and because we talk publicly about these problems when they arise. For example, the Fund has recently demanded that five countries take action to prevent theft based on indications of irregularities. These measures were announced publicly to ensure that the other 140 countries we support understand that the Fund is ready to take tough measures. In the coming weeks we will hold a meeting that brings together the main U.S. and international organizations to encourage them to work collaboratively with the Global Fund to better prevent such theft.

Mr Bate has never contacted The Global Fund to discuss his campaign against drug theft, to verify his information or to learn about our policies, but had he done so, he would have discovered that he has a strong ally in The Global Fund.

Professor Michel Kazatchkine, Executive Director, The Global Fund

John Parsons, Inspector General, The Global Fund

 

ELIZABETH DICKINSON

11:50 AM ET

January 27, 2011

Posted on behalf of Roger Bate, author

Sir,

My article was relatively short and couldn’t address all of the nuance of my concerns about the Global Fund.

More detail on the research I've done can be found at http://www.dovepress.com/antimalarial-medicine-diversion-stock-outs-and-other-public-health-pro-peer-reviewed-article-RRTM

and also here http://www.aei.org/outlook/101009

As to contact with the Global Fund, which the authors appear to be unaware of, I spent about an hour on a call with a Global Fund investigator in early December discussing the theft of medicines. And my colleagues and research assistants have contacted the Fund on several occasions over the past year to gather information.

The fact that most of the actors that the Fund works with are competent and honest, does not mean they can be complacent about the remainder – a few rotten apples can destroy entire systems, or rather develop alternative dangerous networks.

But the Fund's IG and ED are correct in other regards, they are more transparent than any other multialteral agency, and I commend them for it - and in the above documents and most of the articles I write, I point this out. It is a travesty that UNDP hides its data from the Fund.

But the fact that other agencies are worse than the Global Fund doesn't mean we can be complacent when drugs go missing, and I fear that the Fund cannot oversee drug delivery particularly well.

-Roger Bate