The Wall Street Journal - July 7, 2000
Michael Waldholz, Staff Reporter

Mr. Baralengwa soon learned that the gift came with many strings attached. Bristol-Myers's grant guidelines require that he spend the money only on services directly related to counseling people about the dangers of HIV, the AIDS virus. Mr. Baralengwa can't use it to pay for any cost not explicitly requested in his original proposal, such as additional support staff, office rental or furniture (he has next to none) or unanticipated phone bills -- all of which he says are necessary if his fledgling Botswana Christian AIDS Intervention Program is to be effective.

"These restrictions don't make sense to me," Mr. Baralengwa said soon after Bristol-Myers's auditors from PricewaterhouseCoopers told him that he would be required to store grant-related spending records in a locked file cabinet. "I told them that would cost me 8,000 pula [about $1,500] and if I had 8,000 pula, I'd pay my phone bill, not buy a file cabinet," he said.

Major Commitment

Last May, Bristol-Myers announced a five-year charitable donation of $100 million to help fight AIDS in Botswana and four of its neighbors in southern Africa. In doing so, Bristol-Myers became the first Western company to make a major commitment to battle a scourge that in Botswana alone will kill two-thirds of its 15-year-old sons and has already reduced life expectancy by more than 20 years. The company's offer was unveiled publicly to much international fanfare only a few months after United Nations Secretary General Kofi Annan made a personal plea for help to Bristol-Myers Chairman and Chief Executive Charles Heimbold during a private dinner.

Thirteen months later, Bristol-Myers has run up against a host of unexpected problems. Corporate executives, including those who dreamed up the program, admit they are frustrated and chastened. So do Africans like Mr. Baralengwa, who, while grateful for the company's philanthropy, says the company's rules and regulations have hurt the program's effectiveness and sparked unnecessary resentments. A close look at Bristol-Myers's project shows the pitfalls that ensue when a big-pocketed foreign corporation, well-meaning but with little or no experience in Africa, brings its money and management style to Africa's AIDS epidemic.

Wary of a history of government corruption in Africa, the company has rigidly controlled how it doles out its charity, preferring to deal directly with selected universities, private individuals and nongovernmental organizations. In Botswana, Bristol-Myers is spending about $18 million to build a Harvard University-associated AIDS research laboratory and to pay for clinical trials. Both the lab and the drug studies -- the first of their kind here -- are widely praised as worthy undertakings certain to bolster this country's limited capacity to conduct sophisticated HIV research.

But the company hasn't considered backing one of the government's pet ideas, a large-scale effort to raise the nation's HIV consciousness with a program of door-to-door visits by an army of trained neighborhood volunteers. And it has allotted just $430,000 in its first year's commitment for education and outreach to two nonprofit community groups in Botswana.

'Get Our People Talking'

"We appreciate what Bristol-Myers is offering, of course," says Joy Phumaphi, Botswana's health minister. Mrs. Phumaphi says that while the new lab and large-scale drug trials are helpful, she is convinced the greatest challenge to stopping the virus's spread is overcoming the rampant stigma and denial of the disease in a country in which less than 5% of infected people even know they carry HIV. "We must get our people talking about what's killing them and their children," Mrs. Phumaphi says, noting that if Bristol-Myers had asked her, "that's where I'd say the money would be best spent right now."

The Bristol-Myers program is drawing close scrutiny in the drug industry. Other companies reaping huge profits from selling expensive AIDS medicines, including Abbott Laboratories and Merck & Co., are known to be scrambling to produce their own high-profile, charitable programs in Africa. So the Bristol-Myers experience promises to have a big influence on the course of future philanthropy here. Several of the companies had hoped to announce their plans before this weekend, when the world's attention will be turning to Durban, a seaside resort on South Africa's northeastern coast. There, an estimated 12,000 researchers, activists, public-health officials and others from around the globe will gather for the 13th International AIDS Conference. Activists and international public-health officials are likely to call for increased access to Western medicine, especially the life-prolonging but expensive AIDS medicines that are almost nonexistent in poor southern Africa.

Cumbersome Conditions

Despite the charitable effort by Bristol-Myers and smaller ones by other drug makers, the pharmaceutical industry can expect a drubbing in Durban. Even when the gift is free medicine, many African nations say they most want to control their own health delivery. Indeed, some are saying they would rather buy drugs if it gives them control rather than have donations linked to cumbersome conditions. One big fear for the drug industry: the prospect that governments could flood their markets with inexpensive generic versions that are produced in violation of company patents by several countries, including India. In part to blunt an anticipated storm of attacks in Durban about the high costs of their drugs, five drug makers, including Bristol-Myers, surprised many Africans in early May by promising to slash the prices they charge for many of their AIDS drugs for people in countries in sub-Saharan Africa. In recent weeks, discussions among the five companies and officials from the United Nations AIDS program over the size of the price cuts and other details have bogged down, and it is not clear how long it may take before low-priced medicines are widely distributed, if at all.

For its part, Bristol-Myers says its program is prompted by nothing more than the desire to be a good world citizen. "We've heard the charge that we are here to buy good will for our products," says Mark Ahn, the Bristol-Myers executive managing the company's donation program. "All I can say is that we are doing this because it and much much more than we can ever do is needed."

Soon after Bristol-Myers's CEO, Mr. Heimbold, had dinner with the U.N. Secretary General, he turned the task of investigating a potential donation to his longtime lieutenant, Kenneth Weg, the company's vice chairman.

'A Certain Naivete'

Mr. Weg dispatched staffers to South Africa and other nearby countries. Almost immediately, the company ran into problems, particularly in South Africa, where Bristol-Myers's hard-charging style ran afoul of a government of strident personalities hardened by the recent fight against apartheid. "We went in there with a certain naivete," says Mr. Weg. "We expected someone willing to spend $100 million would be warmly welcomed."

Mr. Weg says that Bristol-Myers set up its program to fund medical research and AIDS education based on conversations with local health professionals, but that the company didn't reach out in the beginning to the very top people in government. As a result, several government officials say they felt slighted and even suspicious of the company's motives when it presented a completed program design without first consulting with the governments.

One early surprise for Bristol-Myers: Finding that many Africans were more interested in very basic health-care services, such as shielding the uninfected and prenatal care for young and infected pregnant women, than for money to conduct expensive studies of experimental vaccines or for testing new drug combinations.

"Many in the company simply didn't understand that our priority is to come up with new ideas to prevent the disease from spreading further, not aggressively treating those already sick," says Ashraf Grimwood, a Capetown physician Bristol-Myers recently hired to be medical director for its "Secure the Future" program. Noting that South Africa has some of the highest rape statistics in the world, he adds, "We need help creating innovative ways to quell sexual violence against very young women, one of the more common and terrible ways the virus is being spread."

The company first sought out programs to fund last spring by asking local nongovernmental organizations, or NGOs, and academic researchers, partly through newspaper advertisements and word-of-mouth, to submit grant proposals. The company and its advisers "were really surprised by the poor quality of the grant requests," says Dr.Grimwood.

'Why Should They?'

That should not shock anyone, says Audrey Kgosidinsti, a public-health advocate who works as a health-management consultant here in Gaborone, Bostwana's capital, and has taken on the volunteer job of helping NGOs figure out how to apply for funding. "People with great ideas had no experience writing a persuasive grant proposal, and, of course, why should they?"

In the end, the program funded only two Botswana NGOs in the first year. One is Mr. Baralengwa's nascent HIV-counseling project, which he hopes to set up in several towns. The other went to a traveling drama group. It sealed its grant request for $32,000 after a Bristol-Myers staffer based in Johannesburg saw it perform powerful outdoor theater pieces that portray how rape and promiscuous sex can be deadly to entire families. "It was easy for the company to understand its value just by watching the immediate educational impact the drama can have on people," Ms. Kgosidinsti says. "Most of the other NGOs have a much harder time explaining themselves."

Botswana's health minister, Mrs. Phumaphi, says she understands the NGOS are "very, very frustrated by the process" of competing for grants, a system that is commonplace for nonprofit groups in the U.S., but foreign to local NGOs. She says the government provided a grant-writing consultant to attend the original workshops, but it doesn't have a budget for a full-time staffer. Paying for a consultant to help Bristol-Myers dole out its grants, she says, can't be a priority right now.

Because it failed to fund anywhere near the amount it hoped to target to community programs, Bristol had to seek a second round of grant proposals in its first year. It wasn't able to begin paying out community-education funds until almost 12 months after the program was announced. Debbie Matthew, who runs the AIDS Foundation of South Africa, a private social-welfare funding agency based in Durban, says she has told Bristol-Myers staffers that "they are making a mistake spending money on public-health fellowships, physician-exchange programs and scientific projects." She says, "Very little of the money is going into community programs, where real change must take hold."

Mrs. Matthew says she has suggested that the Bristol-Myers money help train traditional healers in treating HIV-related illnesses because in the KwaZulu Natal rural area outside Durban, they are the most trusted health-care providers. Mrs. Matthew has been unable to secure money for that project, although she did receive a $37,000 grant to help relatives and others who are willing to care at home for many children being orphaned by the disease's assault on adults. She is hoping that in the future the company will begin aggressively supporting programs to target sexual violence against teenage girls and programs to help sex workers find new jobs.

Traditional Healers

Mr. Ahn, the Bristol-Myers executive, says the company hopes to give up to one-third of its funds to community programs, although in the first year, only one-eighth of its money went to such projects. He points out that the company last year gave $661,000 that, along with about $350,000 from a private Catholic charity group, is funding health educators from the University of Illinois to train 2,500 rural health workers in nearby Swaziland, some of whom are traditional healers. Mr. Ahn says Mrs. Matthew is "one of the people we are listening to very carefully" in making its grants.

One of the company's most visible projects is its $3.9 million grant to help the Harvard AIDS Institute complete the construction and equipping of a clinical lab at Botswana's Princess Marina Hospital. An additional $13.9 million is being targeted at research that will be conducted at the hospital and the lab that will try to determine if drug resistance is emerging among infected mothers and their children who are receiving anti-AIDS medicines paid for by the government.

The company also paid for several local doctors to have training sessions at Baylor College of Medicine in Texas and several young infectious-disease doctors from Baylor have been sent to work at Princess Marina Hospital. One such exchange already seems to be paying off. Gabriel Anabwabi, head of pediatrics at Princess Marina, spent several months at Baylor studying how to design clinical-research studies. Upon his return, he put together a proposal to test a relatively inexpensive drug combination in HIV-infected children. The trial, which has received a $4.7 million grant for the coming year, will test three Bristol-Myers drugs, a combination that isn't used in the U.S. because its effectiveness isn't known. If the drugs are effective against HIV, 500 children enrolled in the study will get the drugs for the rest of their lives.

Dr. Anabwabi says that without his experience at Baylor or the presence of the lab, he "wouldn't have ever thought to conduct such a trial." Bristol-Myers may eventually also benefit because if the experimental drug combination should prove effective, its low cost may make it very attractive in other developing nations, as well as in the U.S.

But even successes have come freighted with unanticipated difficulties. Patience Sizani, a 46-year-old married nurse with four children, who works full-time in a small clinic outside Pretoria in South Africa, says her yearlong involvement in a Bristol-Myers-funded public-health fellowship program "has turned me into an activist. ... I feel ready and excited to help people in my town fight this disease."

The fellowship program, run by the Medical School of Southern Africa with a $1.8 million Bristol-Myers grant, exposes health workers to a wide range of public-health advocacy skills such as creating an NGO, grant-writing and doing educational outreach programs for children and adults. Mrs. Sizani, who attended two two-week courses at the school and completed the rest of the curriculum on the Internet, says she was inspired to respond to a local newspaper ad about the fellowship in order to provide better help to the many HIV-infected teenagers she counsels at her clinic.

Much of her job -- often seeing as many as 50 clients a day -- involves trying to persuade HIV-positive teenagers not to re-infect others or re-expose themselves, which may hasten the disease's onset. But Mrs. Sizani is frustrated with the way the program ended. The yearlong fellowship "has inspired me to do community work, but nobody has told me whether now that I've been trained as a community organizer whether there will be any financial help to set these programs up," she says. Indeed, she says she was surprised that the fellowship provided her with a computer, but it didn't pay for her monthly Internet access fee or pay for the books and other materials the program required. Moreover, when the yearlong fellowship ends, "I've got to give back the computer," she says.

Mr. Ahn of Bristol-Myers says complaints from Mrs. Sizani and others have persuaded the company to pay for the Internet charges for future fellows and to allow them to keep their computers.

Some people here also say they have been offended by Bristol-Myers' s effort to publicize its projects. Mrs. Sizani says she was disturbed when she was urged by those running the fellowship to take a day off from work to attend the university's graduation ceremonies in May, where the company's vice chairman, Mr. Weg, was given an honorary doctorate.

The company held a high-profile ribbon-cutting ceremony when it dedicated the lab at Princess Marina Hospital, inviting Mr. Weg from New York, Maurice Templesman, the investor who owns mining interests here, and Mpule Kwelagobe, the 1999 Miss Universe, who is from Botswana.

"A little less fanfare and more concrete contributions will probably help Bristol win over converts," says Jose Zuniga, director of the Chicago-based International Association of Physicians in AIDS Care.

Bristol-Myers staffers say they are learning to listen to criticisms like this one. Mr. Ahn says the company's greatest lesson has been giving up "some control, being humbled by the magnitude of the problems and learning to let people tell us what they want and how things should be done."

Write to Michael Waldholz at mike.waldholz@wsj.com
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