How greed fueled Lebanon’s deadly milk and medicine shortage

Beirut/Akkar, Lebanon — Ammouneh Haydar sits on a plastic chair in the sparsely furnished apartment she hasn’t left for a month. As the sun sets, a single fluorescent lamp casts its weak glow across the room. Within minutes, a power outage lasting 22 hours will reduce the place to darkness.

Haydar, 32, will confine herself to her tiny home in the village of Tleil near the Syrian border for another ten days. Her husband, Ibrahim Urfali, was killed in a fuel tank explosion in mid-August, and she is adhering to a mourning tradition common for grieving widows in some conservative Muslim communities in Lebanon, refraining from contact with men for 40 days.

Tears stream down her cheeks during a moment of quiet reflection. Her six-year-old, the couple’s second-born, pulls Haydar’s face to his and showers it with kisses, seemingly desperate to ease his mother’s agony.

She forces a small smile.

Haydar’s tragedy is emblematic of her country’s crisis.

Like the vast majority of Lebanon’s population, her material losses have multiplied at breakneck speed since the country’s financial disaster began two years ago. The family’s already modest earnings have been whittled down to almost nothing. Rampant shortages have deprived her of the ability to adequately feed her four children.

Even as local television stations screened images of large amounts of stockpiled infant formula at the end of August, Haydar says she couldn’t find any to buy for her seven-month-old son. She says she resorted to feeding him hot water mixed with sugar.

Lebanon’s financial crash was fueled by the greed of a commercial elite, and it is ordinary people like Haydar who are paying a high price — in her husband’s case, the ultimate price — for it.

The country’s economic depression has been driven by a rapid depletion of public finances, exacerbated by what the World Bank says was “deliberate” mismanagement of the crisis on the part of the ruling elite. But the hoarding of essential goods has also dealt the economy a devastating blow.

Lebanon’s Prime Minister Najib Mikati said last month that traders and “corrupted people” have withheld 74% of the country’s subsidized goods — fuel, medicine, food and baby formula — from the public over the past year. This accounts for around $7.4 billion of the $10 billion Mikati says the state spent on subsidies in a year.

Import data, statements from the Central Bank and dozens of interviews with pharmacists, doctors, patients and aid workers conducted by CNN point to an increase in some subsidized goods coming into Lebanon in the first half of 2021 when many parents were struggling to feed their babies, cancer patients didn’t have life-saving drugs and diesel exhaustion caused hundreds of businesses to temporarily shutter.

The fuel tank explosion which cost Haydar’s husband his life highlights the potentially devastating impact of hoarding.

On August 14, Lebanon’s military seized a tanker-load of fuel from a smuggler in Tleil, 110km from Beirut.

In the early hours of the following day, troops tried to distribute the diesel to scores of local men desperate to fuel the generators that power their families’ homes. Ibrahim Urfali was scrambling for a share when the tank exploded, killing at least 31 people, and leaving more than 79 injured.

His wife said Urfali suffered burns to more than 95% of his body.

He and the others gravely wounded in the blast were taken to nearby hospitals for treatment. Some of the medication they needed was missing, and its absence was chalked up to Lebanon’s financial tailspin.

Several of the wounded were flown overseas for treatment, another sign of how far the fortunes of Lebanon — for decades the medical capital of the Middle East — have fallen.

After unsuccessful efforts to fly him abroad, Urfali died.

Days after he succumbed to his burns, Lebanon’s health ministry revealed that more than 6,800 ampules of one of the missing medicines — albumin — had been found in a Beirut warehouse piled high with hoarded medication.

Albumin is a drug typically used to treat severe burns and resuscitate lost fluids, which doctors CNN spoke to said is essential to lowering morbidity rates.

The discovery of the Albumin stockpile, in an affluent Beirut neighbourhood, came during health ministry raids on more than 10 storage units — which the ministry said mostly belonged to importers and pharmacists — in which huge amounts of hoarded medications and baby formula had been stashed away.

“We found all the kinds of medicine and baby formula we had been looking for,” one health ministry official who participated in the raids on warehouses, and who asked not to be named, told CNN.

The medication and formula seized in the raids has since been distributed to hospitals and others in need, the health ministry said.

The Health Ministry says several of the warehouse owners who hoarded medications have been arrested and that evidence gathered in the raids has been forwarded to Lebanon’s judiciary.

The raids appear to have stopped since a new government was formed in early September. The country’s new health minister, Firass Abiad, did not respond to CNN’s repeated requests for comment on why this was the case.

In 2020, in the midst of a deepening financial crisis, the Lebanese government started to subsidize essential goods in response to hyperinflation and rising unemployment. With a majority of goods imported the move was seen as a lifeboat, but the plan — seen by experts as unsustainable — soon backfired.

Local media reports highlighted the illegal smuggling of fuel to Syria. After traders bought fuel in Lebanon at subsidized prices, they reportedly took it across the border to sell at global market rates, leading to significant profits. As the local currency plummeted, profit margins grew. The lira has lost over 90% of its value in two years, whereas global markets have been largely unchanged.

“The [Central] Bank essentially financed the profits of traders,” Zouhair Berro, head of the Consumers Protection Association, a Lebanese watchdog group, told CNN. “Through stockpiling, traders would wait for the price to rise and then sell it at a high price. In this way, very little reached the people.”

The Central Bank claims it warned the Lebanese government about the abuse of subsidies since last June, but their claims have been met with widespread skepticism. The bank has been repeatedly accused of of aiding capital flight from Lebanon and helping the commercial elite shore up profits in the face of the country’s financial freefall — accusations bank officials reject.

At the height of Lebanon’s fuel crisis in July — when queues at petrol pumps extended for miles and power outages spiked dramatically — the country’s Central Bank spent around $800 million on fuel imports, Central Bank Governor Riad Salameh told local media in August. That money would typically sustain Lebanon for three months, he said.

Army raids on petrol pumps in August uncovered tens of millions of litres of hoarded petrol, according to state media and multiple videos showing fuel stockpiles.

In June, Lebanon’s Central Bank largely stopped supplying dollars to banks to extend lines of credit — an essential part of the subsidy mechanism — to importers of infant baby formula and medicine, saying it could no longer afford the drain on its reserves, and citing a significant discrepancy between its bloated import bill and shortages in the market.

“The bill for medicine and healthcare supplies in the first half of 2021 exceeds the entire bill of 2020,” the bank said in a statement in July.

The bank said it had been billed around $1.5 billion on medicines and infant formula in the first six months of 2021 alone, compared to $1.173 billion it had paid in the whole of 2020.

“The numbers just don’t add up,” said another high-ranking Central Bank official. “We discovered these big figures … we went out of our minds.”

Data from Euromonitor International, a strategic market research group, also showed a boost in baby formula imports in the first half of 2021. Lebanon’s pharmaceuticals importers syndicate chief Karim Gebara also acknowledged a growth in medicine imports, though he accused the central bank of attempting to exaggerate import growth in the medicine sector.

“We believe that [the Central Bank’s] analysis is not correct … the data of the order of pharmacists says no, there is a growth of around 10% between this year and last year,” he says. “We also took data of an international company that do analysis of markets. They say the market grew by 10%.”

Gebara says medication imports stopped in May when a pre-approval process for medicine importers was halted by the Central Bank. In August, the Bank said it resumed pre-approvals for subsidized medicines. However, when CNN interviewed doctors at four major hospitals a month later, they said the medicine crisis had not been alleviated by the change.

CNN interviews with aid workers, pharmacists and new mothers also found that while shortages of baby formula and other essential supplies intensified this summer, they began several months before the Central Bank effectively paused the subsidy program.

Asked why the Central Bank paused supplying dollars for subsidies, a high level bank official, who asked to remain anonymous, told CNN it was “because we can’t continue … We don’t have money anymore. It’s done.”

At Lebanon’s biggest public hospital, the Rafik Hariri University Hospital, the mood is sombre.

Dejected looking patients and their loved ones sit on the ground outside the main entrance. There is no toilet paper in any of the bathrooms — one nurse helpfully offers someone a medical mask instead.

Medical staff and patients alike, it seems, are battling not just shortages of medicine and essential supplies, but a sense of impending doom.

Tharwat crouches by a windowsill in the oncology ward, staring into the distance. The 50-year-old has just been diagnosed with Amyloidosis, a heart condition which requires treatment with a chemotherapy medication that neither she nor her doctors can find.

“I don’t understand it,” Tharwat, who asked not to be fully identified, says. “I don’t understand how I can’t find medication.” As she says this, her sister breaks down in tears and scurries out of the room.

“I’m someone who loves life,” Tharwat, wide-eyed and emaciated, explains. “I had a beauty shop. I had customers who I loved. Why is this happening to me.”

“The absolute worst part of my job is when I have patients with curable cancers, but who I cannot treat,” RHUH’s Head of Oncology, Dr. Issam Shehadeh, tells CNN, adding that the majority of cancer patients in Lebanon now cannot receive treatment.

In the hospital’s basement, the mood in the pharmacy is akin to that in a morgue.

The department’s head Raida Bitar opens cabinet after cabinet, refrigerator after refrigerator. Each is empty, or mostly empty: Chemotherapy drugs, medications to raise blood pressure, medicines to treat pregnant women — all missing.

Bitar says some patients have died because the hospital ran out of one cheap and usually widely-available drug, Noradrenaline. “They died because we couldn’t raise their blood pressure.”

An international aid organization recently donated supplies of Noradrenaline to the hospital, so the pharmacy now has a small amount in stock.

Bitar says newborn babies have died because of a lack of Magnesium Sulfate — also recently donated — which is given to mothers who suffer from hypertension.

“These are all very cheap medications,” she says. “Magnesium Sulfate costs 10 cents per ampule.”

“This isn’t only a financial problem,” she adds. “This is a problem of shortages. Suppliers are greedy, the Central Bank isn’t managing the crisis well, the previous government didn’t manage the crisis well. And patients are paying the price.”

Even upper middle-class patients are not immune from the effects of the crisis.

Carine Abou Saab, who is battling Hodgkin’s Lymphoma, underwent an incomplete course of treatment because of the lack of immunotherapy drugs.

When she tried to get hold of the missing medication herself, the serial number on the drug she secured was wrong — suggesting either that it was counterfeit, or that it had been exported from Lebanon to Syria only to be reimported and sold on the Lebanese black market at a higher price.

While Abou Saab was being treated, her three-year-old daughter Maria was diagnosed with leukemia. Abou Saab managed to get hold of the medication Maria needed, but says that given the ongoing crisis in Lebanon, she would prefer her to be treated in Portugal, where Maria is a citizen.

“We feel trapped here. As soon as Maria’s immunity improves, I’m going to take her out,” says Abou Saab.

To alleviate the shortages, non-profit organizations and community groups have stepped in. One of these, the Barbara Nassar Association for Cancer Patient Support, is helping cancer patients secure medication through its international networks.

Hani Nassar, who co-founded the organization with his wife, Barbara, days before she died of cancer, says it’s impossible to keep up with the growing demand.

“If the relatives of patients only knew what was happening in cancer wards, they would commit a massacre,” he says. “Doctors and nurses are having to choose between who gets treatment and who doesn’t — basically who gets to live.”

Less than a kilometer from Ammouneh Haydar’s house in Tleil, lies an abandoned villa, its exterior blackened by smoke. The property belonged to the alleged smuggler whose confiscated fuel exploded in the deadly August 2021 tank blast.

A group of vigilantes torched the home in an act of revenge — one of a number of isolated acts of retaliation in a country where distrust runs deep, and where despair is so widespread, most feel there is little point trying to assign blame.

“Everyone exploited us,” says Haydar.

Recounting the litany of tragedies that have befallen her family, it is her inability to properly feed her seven-month-old that brings tears to her eyes

“There’s a huge difference in how I fed my older children when they were infants,” says Ammouneh. “Because of the shock that happened to me, I can’t breastfeed. I need baby formula. But there is no baby formula.”

“I can’t even tell you how I feel when I feed my child water and sugar,” Haydar says, choking back tears. “It’s something so difficult.”