Would be 100 times easier to script this than do it in the database. In the database you would have to create a loot drop, then add it to every NPC's loot table and/or create a loot table if they don't already have one - or if they share one with NPC's that are under level 35.
If scripting it, you can just add it to global_npc.pl and do something like;
Code:
sub EVENT_DEATH {if ($mlevel >= 35) { $npc->AddItem(itemid, quantity); }
}
EDIT: Forgot your 1% requirement. Just add a random roll statement before the additem.