the bulletinSPRING | 2007

More than 46 million Americans lack health insurance (U.S. Census Bureau, 2006). For these people, accessing affordable medical care and medicine is both diffi cult and costly. Safety-net clinics, community health centers, local public health clinics, and hospital emergency rooms are often the only options for those who lack insurance. Over the past four years, Direct Relief’s safety-net clinic program has worked to provide medicine and supplies to this growing group of uninsured through supporting clinics and health centers treating working-poor patients who would otherwise go without care or pay high, non-negotiated rates for their medicine.

Support for the safety-net clinics expanded in April, as Direct Relief partnered with The Children’s Health Fund, the National Association of Community Health Centers, and the National Association of Free Clinics in a nationally focused effort to distribute 500,000 environmentally friendly inhalers to more than 850 community health centers and free clinics in all 50 states and Puerto Rico.

The partnership, under the banner of the 2007 ASPIRE Campaign, is the result of a generous donation of 500,000 units of the PROVENTIL® HFA inhaler by pharmaceutical company Schering-Plough.

Schering-Plough’s donation was a proactive response to a federally mandated ban on chlorofl uorocarbons (CFCs) inhalers from the Food and Drug Administration. The ruling required all drug makers that produced CFC inhalers to transition them off the market by 2008. Asthma patients who used the commonly available CFC albuterol asthma inhalers must switch to an environmentally-friendly inhaler like the PROVENTIL® HFA inhaler. The ASPIRE Campaign’s

purpose was developed to ease the transition for low-income patients treated at participating clinics who will be hardest hit by the federal ban.

Working directly with national, regional, and local health center and clinic associations, Direct Relief identifi ed the needs of providers treating uninsured asthma patients. A total of 858 health clinics nationwide

responded to Direct Relief’s survey, resulting in a total donation of 471,873 units of the environmentally friendly inhalers to be distributed to low-income, uninsured asthma patients free of charge.

The ASPIRE Campaign, combined with an expanding domestic initiative to provide critically needed medicines and medical supplies to community centers and clinics over the last year, has increased Direct Relief’s domestic support to over $64 million (wholesale) since 2003.

USADirect Relief Partners with Nationwide Clinics to EaseAsthma Inhaler Transition

DIRECT RELIEFBY THE NUMBERSFiscal Year 2007April 1, 2006 through March 31, 2007* Unaudited fi gures

$133.6 millionmedical resources furnished (wholesale value)

34.8 millioncourses of treatment provided

59 countries served

1,070 number of aid shipments

1,094 tonsof medical material aid furnished

40

42

44

46

48

50

20052004200320022001

Mill

ions

of U

nins

ured

Number of Uninsured Americans*

Year*Source: U.S. Census Bureau, August 2006

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20

30

40

2007200620052004200320022001

Mill

ions

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ater

ial A

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Direct Relief’s Support to U.S. Safety-Net Clinics

Year

Katrina SupportOngoing Support

photo credit:Asian Pacifi c Health Care Venture

In-Kind DonorsFrom November 1, 2006, through March 15, 2007, Direct Relief received medical aid with a wholesale value of $52,616,402. We thank the following in-kind donors whose generosity has enabled us to help millions of people around the world.

AbbottAllied HealthcareAstraZenecaBaxter International Inc.BDBoehringer Ingelheim CARES FoundationBristol-Myers Squibb CompanyCarlsbad Technology, Inc.Chattem Inc.Child Health FoundationCovidienCure MedicalDey LaboratoriesE. Fougera & CompanyEdgepark SurgicalEthicon, Inc.FSC Laboratories, Inc.GlaxoSmithKlineHeart HuggerHenry Schein Cares ProgramIAPYX MedicalInstyMeds Corporation/RedPharm InvacareJanssen Pharmaceutica, Inc.Johnson & JohnsonJohnson & Johnson Consumer CompaniesJoseph Weintraub Inc.Lane Instruments CorpLeMaitre Vascular, Inc.Marlyn Nutraceuticals, Inc.McNeil Consumer & Specialty Pharmaceuticals Medline IndustriesMerck & Company, Inc.Microfl exMicrolife USA, Inc.Midmark CorporationMiltex Instrument CompanyMylan Laboratories Inc.Onyx Medical CorporationPurdue Pharma, L.P.Quixtar, Inc.REM EyewearRoyal ChemicalRoyce MedicalSandel Medical Industries, LLCsanofi -aventisSappo Hill SoapworksSchering-Plough CorporationSpan-America Medical Systems, INC.TEVA Pharmaceuticals USATher-Rx CorporationTrading Places InternationalVitamin Angel AllianceWatson Pharmaceuticals, Inc.

Improving Global Health

GlaxoSmithKline Sponsors Projects Throughout Tsunami-Affected Sri LankaIn 2006, GlaxoSmithKline (GSK) provided $265,000 to improve healthcare and mental health services for tsunami-affected communities in Sri Lanka. The funding has supported three major projects in southern and eastern Sri Lanka, including the operation of mobile medical clinics in the coastal Ampara District, the construction of a health clinic in Nintavur, and the provision of medical, dental, nutritional, and psychosocial services for tsunami-affected children in the District of Hambantota.

Along the east coast of Sri Lanka, where thousands still remain displaced from the tsunami and civil strife, GSK funds supported the purchase of a mobile medical vehicle for the Guardian Foundation, a Sri Lankan nonprofi t organization. The mobile medical vehicle travels along the tsunami-affected coastline, bringing primary health services and health education to over 9,000 patients in the fi rst quarter of 2007 alone.

In Nintavur, a small coastal community in the Ampara District that suffered extensive infrastructure damage from the tsunami, the GSK grant fi nanced the construction of a two-room health clinic that will focus on the provision of primary, preventative, and maternal and child health services for the community of 8,000 people. In southern Sri Lanka, GSK is working with Direct Relief to provide medical, dental, and psychosocial services for tsunami-affected children through Shilpa Children’s Trust in the Hambantota District. Medical and dental camps are arranged for children and their families who lack access to primary health services.

Both GSK and Direct Relief are committed to fi nding and assisting long-term healthcare solutions for the Sri Lankan people who continue to suffer the effects of the tsunami, which has been compounded by escalated civil strife and violence.

Boehringer Ingelheim Provides Critical Pain Medication for Low-Income AmericansIn October 2006, Boehringer Ingelheim CARES Foundation

contributed over $45 million (wholesale) of the pain medication Mobic® in support of Direct Relief’s efforts to assist safety-net community health centers and clinics in the United States with needed medications for their low-income, uninsured patients. The material contribution was the largest single donation in Direct Relief’s history, but more importantly it was a key resource for clinicians treating patients in need.

Pain medication is often too expensive for community health centers and clinics to purchase. With this contribution, clinic physicians are able to deliver this highly effective pain reliever free of charge to their patients. Centers and clinics that have received Mobic® from Direct Relief noted that the product is critical to their provision of care for arthritis and helped expand their assistance to patients who would have otherwise been unable to pay for medications.

One bottle of Mobic® delivers a three-month supply of pain medication for one patient. Direct Relief estimates that more than 18,000 patients have received critical pain relief as a result of Boehringer Ingelheim’s generous contribution.

Direct Relief’s Tsunami Response

$45.1 million(wholesale) medical resources furnished

4.6 millioncourses of treatment of specifi cally requested medicines, supplies, and medical equipment to care for tsunami victims

$12.3 millioninfusion of cash to assist the rebuilding of the health infrastructure

Cameroon

Physicians in Cameroon face some of the most extreme healthcare challenges in the world. They are continually faced with chronic shortages of medicines, medical supplies, and proper medical equipment. Physicians are constantly overwhelmed, working in a country with severe health worker shortages. With only 19 physicians per 100,000 people, Cameroon has one of the lowest ratios of doctors to patients in the world. Life expectancy for women is 51 years and only 50 years for men (UNDP 2006).

For Quality Healthcare Unit (QHU), a clinic located in the capital city of Yaoundé, the supply side of the challenge is being eased with the support of Direct Relief.

In March, Direct Relief provided QHU, a partner organization since 2004, with maternal and child health equipment that will drastically upgrade the facility’s ability to diagnose potential problematic pregnancies, monitor fetal development, conduct abdominal and uterine surgeries, and prevent complications for women who have miscarried. The enhanced equipment will also encourage QHUs doctors to work and stay engaged in their local community.

The assistance to QHU is the most recent example of a Direct Relief initiative, launched in 2006, to improve maternal and child health services in high-need countries through the provision of requested and appropriate maternal and child health technology. The goal is to reduce maternal and infant mortality and morbidity by making signifi cant improvements in a partner’s capacity to prevent and treat health problems among pre- and post- partum mothers and their children.

Equipment provided to QHU included such critical pieces as a new ultrasound machine, fetal monitor, suction aspirator for pediatric

reanimation, baby incubator, instruments for dilation and culletage, and key laboratory pieces for comprehensive hematology, chemistry, and microbiology testing. Each partner facility included in the initiative receives a customized module based on their particular equipment, biomedical situation, and the priority needs of the population being served.

QHU was established by Dr. Judith Shang, an epidemiologist formerly employed in the U.S. by the Centers for Disease Control and Prevention, and the Food and Drug Administration.

Situated in a densely populated neighborhood on the outskirts of Yaoundé with a population of 1.4 million, QHU provides primary care services, with a focus on maternal and child health and family planning, to a largely urban, impoverished community. In addition to the full compliment of maternity services, QHU also addresses common medical concerns such as diarrheal disease, upper respiratory infections, malaria, and malnutrition. The clinic’s approach emphasizes preventative care for all patients.

Despite the extensive poverty of the local population, QHU, as a result of their expertise and standard of services, is able to attract some urban, middle-income patients that help to cross subsidize patients that cannot pay for services. The Direct Relief-donated equipment module will hopefully encourage additional paying patients to come to the facility, which in turn, will facilitate the expansion of services for poor and indigent patients.

Direct Relief is pleased to be working with the Quality Healthcare Unit to protect and save the lives of Cameroonian women and children. Other maternal and child health equipment modules have been provided to El Salvador, Ghana, Guatemala, and Tanzania. For more information on Direct Relief’s maternal and child health assistance, visit www.DirectRelief.org.

Direct Relief Provides Critical Equipment to Improve Maternal-Child Health in Cameroon

In 2006, Direct Relief launched an initiative to improve maternal and child health services in high-need countries by providing critically needed equipment. Direct Relief has already furnished fi ve consignments of requested and appropriate maternal and child health technology to partners, including the Quality Healthcare Unit in Cameroon.

CAMEROON FACTS18 million population

45.7 years life expectancy

144 out of 177 countries on the UNDP Human Development Index

1989 the year Direct Relief began sending assistance

$9.1 million (wholesale) assistance furnished

1.5 million courses of treatment provided

Aravind Eye Hospital, founded in 1976 by ophthalmic surgeon Dr. G. Venkataswamy, began as an 11-bed eye care clinic located in the old temple city of Madurai, Tamil Nadu, India. Established to provide comprehensive eye care services and eliminate preventable and curable blindness, Aravind has grown into a self-sustaining system that now includes fi ve hospitals, an international research foundation, a resource and training center, and an ophthalmic product manufacturing facility. Aravind’s network treats over 1.7 million patients each year, two-thirds of whom receive free care.

Since its inception, one of Aravind’s priorities has been cataract surgeries. However, the high cost of consumables – particularly intraocular lenses (IOLs) that are implanted into the eye after a cataract is removed – proved a signifi cant barrier. In the 1970s and 1980s, IOLs were primarily manufactured in the U.S. and sold for $300 or more per lens.

The most viable solution to cutting this cost was to produce the lenses in-country. In 1992, Direct Relief provided the necessary production equipment to Aravind. Once the equipment was received, Aurolab, Aravind’s new manufacturing arm, was able to cut the cost of IOLs to under $5, which enabled them to fulfi ll their own demand as well as that of other charitable eye care facilities in India and around the world. Over the past 15 years, Aurolab has supplied more than fi ve million lenses to facilities in 120 countries.

With a generous grant from The Allergan Foundation, Direct Relief is now purchasing IOLs from Aurolab for partner ophthalmic

facilities in Africa, Asia, and Latin America. As a result of the project, thousands of people will recover their sight and have the opportunity to regain their traditional roles in family and society. Direct Relief’s assistance 15 years ago has now come full circle to help even more people.

Restoring SightA Cost-Effective Intervention

Emergency ResponseHurricane KatrinaTwenty months after Hurricanes Katrina and Rita struck the Gulf Coast, Direct Relief continues to provide direct cash investments to support the healthcare infrastructure in the region. Direct Relief is committed to providing medical material aid and targeted cash grant assistance to quality healthcare providers in the Gulf for as long as it is needed.

• Furnished $26.8 million (wholesale value) of needed medical supplies and pharmaceuticals, constituting 1.66 million courses of treatment through 95 shipments

• Disbursement of 95 percent of the $5.1 million in cash donations received for hurricane relief

• Infusion of $4.68 million • Infusion of $4.68 million • Infusion of in critically needed cash grants to 42 partner clinics, hospitals, and associations

Direct Relief’s Emergency Response$85 millionmedical material aid furnished for disaster relief in the last 29 months

$18.5 millioninfusion of fi nancial resources granted for disaster relief in the last 29 months

$0 millionamount of disaster contributions spent on administration or fundraising

Direct Relief’s recent infusion of cash has assisted the following:

• Provision of Medical EquipmentTeche Action Board (TAB), Louisiana

$70,000 to enable the purchase of a robotic dispensing system for the in-house pharmacy to increase the Community Health Center’s ability to dispense medications in a safe, effi cient, and cost-effective manner

• Mental Health ServicesSoutheast Mississippi Rural Health Initiative

$100,500 to improve mental health services in the Hattiesburg Public School District, Mississippi through the support of a licensed psychologist for school-based clinics

• Oral Health ServicesSt. Gabriel Eastside Community Health Center, Louisiana

$99,996 to reduce the oral health problems in the Iberville and Ascension Parishes through the support of medical personnel for a new dental clinic

• Maternal and Child Health Services St. Charles Community Health Center, Louisiana

$75,000 to improve maternal and child health services for the expanding Latino population in the Greater New Orleans area through the support of a nurse midwife program

In addition to partnering with The Allergan Foundation and the Aravind Eye Hospital to provide IOL lenses for patients with cataracts, Direct Relief also provides high-dose vitamin A to clinics throughout the world to prevent childhood blindness.

Honorary Chair ($1,000,000 + ) The Estate of H. Guy DiStefano

Ambassador of Health ($100,000 + )AnonymousBDThe Osprey FoundationMr. and Mrs. Jon B. LovelaceThe Orfalea FundMr. and Mrs. Cooper WilliamsNancy E. Williams Family Foundation

Consul General ($50,000 + )AnonymousAbbott FundThe Antioch CompanyGlaxoSmithKlineMr. and Mrs. Peter O. Johnson, Sr.Mr. and Mrs. Donald S. KennedyMr. Michael ScottMr. and Mrs. Harold Simmons/ Harold Simmons Foundation

Global Emissary ($25,000 + )AnonymousBoehringer Ingelheim CARES FoundationFrancois and Sheila Johnson BrutschMr. and Mrs. Robert CathcartGoogleMr. and Mrs. Brett Hodges/ WWW FoundationJohnson & Johnson Family of CompaniesDorothy Largay, Ph.D. and Mr. Wayne RosingMSST FoundationThe Nurture FoundationMr. and Mrs. James J. Roehrig/ Roehrig Family FoundationMr. and Mrs. Richard SchallMr. and Mrs. Pete Schmidt-PetersenThe David Vickter FoundationMr. and Mrs. Anant YardiYardi Systems, Inc.Yorba Oil Company, Ltd.

World Health Envoy ($10,000 + )AnonymousMr. and Mrs. Stephen AdamsBower FoundationJohn G. Braun Charitable Annuity TrustDr. Bronwen G. Brindley and Mr. John L. Warren

Mrs. Ruth R. CrawfordMr. and Mrs. Thomas J. CusackMr. and Mrs. Steve DowMr. and Mrs. James DrasdoDr. and Mrs. Ernest H. DrewMr. and Mrs. Thomas P. ElsaesserFedExMr. and Mrs. Gary FinefrockMs. Penelope D. FoleyFox Point Ltd.Ms. Claudia FreyJosephine Herbert Gleis FoundationGlobal Partners for DevelopmentMr. and Mrs. Richard GodfreyGuyana Medical Relief, Inc.Mr. W.T. HammondMr. and Mrs. W. Scott HedrickMr. and Mrs. George Holbrook, Jr./ George W. Holbrook Jr. FoundationMr. and Mrs. James H. Jackson/ The Anne Jackson Family FoundationThe Lehrer Family FoundationMacheist LLCMr. and Mrs. Frank MagidMontecito Bank & TrustThe Samuel B. and Margaret C. Mosher FoundationMr. and Mrs. Robert NakasoneNationwide Life Insurance CompanyOrfalea Family FoundationMr. Dee Sterling OsborneMr. David Russell and Mrs. Diane RussellMr. and Mrs. Denis R. SananMr. and Mrs. James SelbertShaker Family Charitable FoundationMr. and Mrs. James ShattuckThe Skolnick FoundationMs. E. M. StephensMr. and Mrs. Andrew StevensonMr. Sanu K. ThomasMrs. Grace A. TicknerWilliam A. and Madeline Smith FoundationMr. and Mrs. Frank M. Wilson IIIWood-Claeyssens FoundationWriter Family Foundation

President’s Council ($5,000 + )AnonymousAnacapa Micro Products, Inc.

Anner TrustMr. and Mrs. Bruce AnticouniArnesen Woodland Hills LLCMr. Anderson J. ArnoldMs. Sara BarrMr. and Mrs. Philip M. BattagliaMs. Jocelyn C. BauerMr. and Mrs. Frederick BeckettBeckmen VineyardsMr. and Mrs. Frank BlueMr. and Mrs. Jack BowenBristol-Myers Squibb CompanyMr. Frederick P. BurrowsMr. Robert J. ButtelThe Hon. and Mrs. Henry E. Catto/ Catto Charitable FoundationMr. and Mrs. Barton E. Clemens, Jr.Mr. and Mrs. Kenneth CoatesMr. Debra ComptonMs. Helen S. ConverseMr. Scott CooperCrosby Family FoundationMr. and Mrs. Robert L. EmeryMr. and Mrs. Thomas E. EverhartMr. and Mrs. Ted EwingMs. Carol Ferren and Mr. Gary OvermanMr. and Mrs. Brooks FirestoneFirestone VineyardMary Alice Fortin FoundationMr. and Mrs. Edward GaylordMr. and Mrs. Lawrence R. GlennDr. Bert Green and Ms. Alexandra Brookshire/ Brookshire Green FoundationMrs. Raye Haskell/ The Haskell FundMr. and Mrs. Stanley HatchMrs. Juliane HeymanPriscilla Higgins, PhD. and Mr. Roger W. Higgins/ Higgins-Trapnell Family FoundationMr. Phillip HobbsMr. Erle HolmE. Carmack Holmes, M.D. and Mrs. Carolyn HolmesMr. and Mrs. S. Roger Horchow/ The Horchow Family Charitable FoundationMr. and Mrs. Preston HotchkisMr. and Mrs. Stanley HubbardMr. and Mrs. Richard A. JohnsonDr. Amy Kelley

Mrs. Marvel KirbyMr. and Mrs. Robert KlausnerMr. and Mrs. John Knox-JohnstonMr. Larry Koppelman and Mrs. Nancy Walker KoppelmanMr. Ishwan KumarMrs. Nancy LessnerMichael E. and Carol S. Levine FoundationThe Hon. and Mrs. John D. MacomberMr. Doug Margerum/ The Wine CaskMs. Roya MokhtariMostyn Foundation Inc.MyFonts.com, Inc.Mr. and Mrs. Frank R. Ostini/ The Hitching Post & Hitching Post WinesMr. Devon PatelMr. Gregory PerronMr. and Mrs. Donald E. PetersenMr. Alan R. PorterThe PRASAD ProjectMr. Pooja RajRivinus Family FoundationThe Roney Family FoundationMr. and Mrs. Rick RoneyMs. Edith SatorMr. C. William Schlosser, Jr.Mrs. Nancy Schlosser/ Nancy B. & C. William Schlosser Family FoundationAyesha Shaikh, M.D. and Mohammed Shaikh, Ph.D.Mr. and Mrs. Bhupi SinghMs. Carol L. SkinnerMr. and Mrs. John W. SweetlandTSystem, Inc.Mr. and Mrs. Paul TurpinMr. and Mrs. James VillanuevaMs. Judith WatsonMr. and Mrs. Michael WeberDr. and Mrs. Thomas A. Weber

Five new members were named to Direct Relief’s Board of Directors in February. Thomas Cusack, Richard Godfrey, Raye Haskell, Donald Lewis, and Ashley Parker Snider will all be joining the Board for a three-year term.

Direct Relief’s Board of Directors elected Stanley C. Hatch as its new chairman. Hatch, a board member since 2003 and vice chairman for the past two years, succeeds previous chairman Denis Sanan, who served in the offi ce from 2005 to 2007 and reached his term limit as chair.A founding member of the Santa Barbara

law fi rm Hatch & Parent, Hatch served as its managing partner from 1968 to 1991.

The Board’s executive and philanthropic expertise will broaden with the skills of the incoming members. Ms. Haskell has held a variety of executive roles with the California State Government. She also serves on the Santa Barbara Board of Community Arts and Music Association, and on the Board of Directors for the Little Town Club. Ms. Parker Snider is Vice President for Marketing and Public Relations for Fess Parker Winery & Vineyard. She is also a board member of the Rehabilitation Institute at Santa Barbara.

The new slate also brings a strong business background to the humanitarian organization. Mr. Cusack was formerly the Chairman, President, and CEO of Transamerica Occidental Life Insurance Company, and Executive Vice President of Transamerica Corporation. Mr. Godfrey, who served on the Direct Relief board including as chairman from 1999 to 2005, was formerly Managing Director in charge of Private Client Services for Trust Company of the West, a global investment management fi rm. Mr. Lewis has more than 30 years experience in commercial and industrial real estate investment and brokerage in the Pacifi c Northwest.

Direct Relief Welcomes New Board Members and Chairman

Our InvestorsGifts received from November 1, 2006, through March 31, 2007

Thank You

27 S. La Patera LaneSanta Barbara, CA 93117tel: (805) 964.4767fax: (805) 681.4838www.DirectRelief.orginfo@DirectRelief.orgaddress service requested

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Make a Gift Through Your IRA Now!If you make a gift to Direct Relief International on or before December 31, 2007, the Pension Protection Act of 2006 provides new tax incentives for charitable gifts from donors who are 701⁄1⁄1 2⁄2⁄ or older. You don’t have to pay income tax on the amount coming out of your IRA, and it can count as meeting all or part of your required minimum distribution, if you so desire. For further information about contributing funds through your IRA, please call Janice Pegram at (805) 964.4767 or consult your tax advisor.

Direct Relief Announcements• 2007 Shareholders’ Meeting

We hope that you were able to attend our annual Shareholders’ Meeting on May 17. If you happened to miss it, you’re in luck! Event footage will be available online in June. Just visit www.DirectRelief.org.

• New Web Site LaunchDirect Relief is excited to unveil its new web site in June. In addition

to the new design, the site will highlight additional information about Direct Relief’s programs around the world and the organization’s renowned effi ciency.

Healthy people.Better world.