My Suggestion:
I think the biggest pain point is seeing a duplicate item drop when one is not desired (the normal case right now). The next sad point I see is getting a weapon you do not need, when your friend needs it so badly. Therefore I would suggest:
If a drop would randomize to be a duplicate, it should become 10 totems in your loot pool instead. This can then be exchanged for the item you need, or passed to someone so they can get the item they need.