Aid agencies aim to do good; those providing medicines for fatal diseases save lives. Last year the US 'President's Malaria Initiative' (PMI) and the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) between them bought about 120 million treatments, mainly for sub-Saharan Africa. The intention is, of course, to treat the poorest malaria sufferers, who are unable to buy the best treatments.
But there are numerous examples of drugs not going where they are intended. The Ugandan finance ministry found that in one district, only 20% of anti-malarials dispensed from clinics actually went to those with malaria, other 'patients' are speculators, who hoard the top-quality free handouts for future use, or sell them on to dealers. Additionally, theft of medicines is widespread.
My own research on the drug theft and diversion problem was recently published in the peer-reviewed literature (Bate et al., 2010). We found that of the clinically superior, most expensive and widely donated products, 30% had been diverted, and this diversion accelerated over the three years of the study.
After this study was published, GFATM announced it was conducting its own investigation into medicine theft. It is impossible to be sure how much is diverted and traded, but drawing on research findings and anecdotal reports, if 100 million treatments of the best drugs are donated to Africa perhaps as much as 30 million are diverted.
Given the rhetoric of donors and recipients alike one would expect such profiteering to be sharply curtailed. But, looking deeper, one finds a lack of incentives driving agencies to actively address the problem-some individuals may care enough to risk their jobs by speaking out, but most keep their heads down and mouths shut.
If no one exposes the problem, then who, in the short run, actually suffers? Donors, drug companies, recipient finance and health departments, even some clinicians, all benefit from the current system, even though the drugs are stolen, because international health aid programmes have rarely monitored outcomes. In fact, some benefit more if orders have to be duplicated because of theft, and none would benefit from blowing the whistle. Until the incentive structures are adjusted so that remuneration is based on whether patients with malaria receive anti-malarial drugs, rather than whether the drugs are provided to a national store, then theft will continue.
Some donors, notably the PMI, publish audit reports and are robust enough to insist that the most egregiously corrupt recipients are removed or bypassed. When repeated thefts occurred from Angolan government stores, PMI began only using bonded private warehouses and private contractors.
GFATM was established to help poor countries manage their own drug procurement and delivery processes.
GFATM's approach follows 40 years of international health policy, which is supposed to assist poor nations to build up their own competence to deliver healthcare to their own people. This is a noble aim, and is essential since no amount of foreign assistance can ultimately improve another nation's health. The crux of the problem is that too many poor nations, and their identified recipients of drugs, are simply not capable of doing the job. If GFATM's approach helps other countries grow and enhances their capability, one could make the case that the aid is worthwhile even if only 20% of malaria drugs reach intended patients. But working against this are two major problems: the dependency culture in the aid system; and encouragement of criminal activity as large networks develop to distribute diverted drugs.
Since donors do not systematically gather data on performance (thus measuring lives saved, rather than drugs distributed) we do not know whether major changes to the entire aid system are required. We are relying on guesswork; that suits most of those within the aid industry, because it perpetuates the status quo.
Roger Bate is the Legatum Fellow in Global Prosperity at AEI.