A Framework for Rational Decision Making
Health Companies
Alcon
Abbott Laboratories Fund
Baxter
BD
Boehringer Ingelheim Cares Foundation
Bristol-Myers Squibb Co.
Eli Lilly and Company
Genzyme
GlaxoSmithKline
Hospira, Inc.
Johnson & Johnson
Merck & Co., Inc.
Pfizer, Inc.
sanofi-aventis US
Humanitarian NGOs
AmeriCares
Catholic Medical Mission Board
Direct Relief International
Heart to Heart International
International Aid, Inc.
Map International
Mercy Medical Corps
Mercy Ships
National Cancer Coalition
Medical Teams International
Project HOPE
U.S. Fund for UNICEF
Tulipe
World Vision
2
3
Development
40%
Medical Kits
56%
Humanitarian
Disease
Emergency
Specific
2%
2%
Seven Components
1. Assessment
2. Appropriateness
3. Quality & Quantity
4. Packaging
5. Transportation
6. Human Resources
7. Evaluation
Why add medical
product valuation?
There are many legitimate approaches to
valuation that are socially relevant and
ensure compliance with required
financial accounting standards.
The project is an effort to find common
ground among often disparate opinions.
Goal to create a white paper or standards.
But first, there are three major challenges
to address……
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Exit price notion, from market participant
perspective (ASC 820-10-30-2)
The transaction to sell the asset occurs in the
principal market (i.e. provides the greatest
volume and level of activity for the asset) or the
most advantageous market (i.e. maximizes the
amount received from a sale) if a principal
market is not available (ASC 820-10-35-5)
They should not be adjusted for transaction costs
(ASC 820-10-35-7).
They assume the highest and best use of the
asset by market participants (i.e. maximizes the
value of the assets) (ASC 820-10-35-10).
Real
Change
Takes
Time
Due process means that any person (organization,
company, government agency, individual, etc.)
with a direct and material interest has a right to
participate by:
 a) expressing a position and its basis,
 b) having that position considered, and
 c) having the right to appeal.
Due process allows for equity and fair play. The
following constitute the minimum acceptable due
process requirements for the development of
consensus.
Advisory
Group
Input
Public
Comment
Review
Revision
Key
Stakeholders
Experts
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Principles
Standards or guidelines
White paper
Examples
Tools: a decision tree
It is not meant as a replacement for any
NPO’s professional financial review
and interpretation of GAAP.
Developed to inform the valuation process
used by non-profits to assign a financial
value to medical product donations. Also
provides a foundation for standards.
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Transparency
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Compliance
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Relevance
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Proper documentation
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Patient centered donations
There should be a clear and
transparent donation valuation
framework that complies with
all applicable external
accounting requirements.
Valuation frameworks must be
GAAP compliant, subject to
accounting interpretation
within the law, but consistent
in application.
The valuation framework
should reflect the wide range
of products, sources, markets
and recipients.
The valuation process should
be documented through
written procedures and
practices and published as
part of an organization’s
financial statements.
Primary focus should remain on the
recipients; the community, the
receiving institution, and the
patient.
Where there is a conflict between
valuation and service to this
population, we will make decisions
that first do no harm to the
recipients, within the law.
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Expansion of Principles into
Guidelines/Standards
Public Comment Period
◦ Survey on PQMD.org and email
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Revisions and Final Comment Period
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Publication
Contact:
lwarrens@pqmd.org