VZCZCXRO6325
RR RUEHCN RUEHGH
DE RUEHIN #1454/01 1170844
ZNR UUUUU ZZH
R 270844Z APR 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 9896
INFO RUEHBJ/AMEMBASSY BEIJING 5120
RUEHUL/AMEMBASSY SEOUL 7795
RUEHKO/AMEMBASSY TOKYO 7668
RUEHCN/AMCONSUL CHENGDU 1221
RUEHGZ/AMCONSUL GUANGZHOU 9267
RUEHHK/AMCONSUL HONG KONG 6323
RUEHGH/AMCONSUL SHANGHAI 0078
RUEHSH/AMCONSUL SHENYANG 5179
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAUSA/DEPT OF HHS WASHDC
RUEHGV/USMISSION GENEVA 1738

UNCLAS SECTION 01 OF 03 TAIPEI 001454 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/RSP/TC AND EB/TPP/BTA, STATE PASS USTR FOR 
ALTBACH, WINELAND, STRATFORD, USDOC FOR 
ITA/MAC/AP/OPB/TAIWAN/JDUTTON, HHS FOR EVANDER, GENEVA FOR 
DHOHMAN 
 
E.O. 12958: N/A 
TAGS: ETRD ECON TW
SUBJECT: TAIWAN HEALTH MINISTER: WHO, AVIAN FLU, AND 2G 
HEALTH SYSTEM 
 
¶1.  (U) Summary:  Minister of Health Hou Sheng-mou told AIT 
Director Young that preparing for Avian Influenza is the top 
priority of Taiwan's Department of Health (DOH).  Taiwan is 
eager to participate meaningfully in WHO meetings and to work 
with the U.S. to respond to global health emergencies.  DOH 
wants to help resolve pharmaceutical industry concerns about 
pricing policy.  Minister Hou would like to meet Health and 
Human Services Secretary Leavitt in Geneva and find an 
opportunity for Taiwan CDC Director General Kuo to meet with 
HHS counterparts to discuss Avian Flu and pharmaceutical 
policy.  Upcoming TIFA meetings are a good chance to raise 
IPR and market access issues.  Action Request para 8.  End 
Summary. 
 
------------------------------ 
Avian Flu Taiwan's Top Concern 
------------------------------ 
 
¶2.  (U) Director Young (accompanied by Econ Chief and Econoff 
(notetaker)) paid an introductory call on Minister of Health 
Hou Sheng-mou April 24.  Hou was accompanied by Counselor 
Hsiao Mei-ling, CDC Director General Steve Kuo, and 
International Cooperation Director Peter Chang.  The Director 
congratulated Taiwan on its preparations for Avian Influenza 
(AI) and noted Taiwan Center for Disease Control (CDC) 
Director General Steve Kuo has been an excellent interlocutor 
on emergency preparedness issues.  Minister Hou thanked AIT 
for facilitating cooperation between the US and Taiwan CDCs 
during SARS and noted that he had raised the possibility of 
increased cooperation during Congressman John Linder's (R-GA) 
recent visit to Taiwan.  AI preparations remain Taiwan's top 
health priority, said Hou, and, although he hoped the warm 
weather will limit the possibilities of an outbreak, he was 
eager to continue work to prevent any cases in Taiwan. 
 
------------------------------ 
Taiwan's International Profile 
------------------------------ 
 
¶3.  (U) The Director encouraged Taiwan to continue 
participating in World Health Organization (WHO) sponsored 
technical meetings and to demonstrate that it can make a 
meaningful contribution.  Hou agreed that meaningful 
participation was Taiwan's goal in these meetings but noted 
that Taiwan had still been unable to attend one third of the 
meetings due to late notice or other problems.  Taiwan would 
like to share its experience and cooperate with the U.S. and 
others in time of crisis, Hou said.  Taiwan sent medical 
supplies and teams to Indonesia after the tsunami and 
contributed to Hurricane Katrina relief as well.  The 
Director praised Taiwan's contributions and suggested that 
relief efforts were a good way to demonstrate Taiwan's sense 
of international responsibility.  He encouraged Taiwan to 
unilaterally agree to the WHO International Health 
Regulations. 
 
------------------------------ 
Still Feeling the Heat on Beef 
------------------------------ 
 
¶4.  (U) Hou turned to U.S. beef imports, lamenting that in 
spite of popular support for the decision to re-open Taiwan's 
market, DOH was still facing pressure from legislators to 
reverse itself.  Hou asked for additional support from U.S. 
experts to demonstrate that U.S. beef is safe.  Young said 
the U.S. position was that food safety decisions should be 
based on sound science and praised Taiwan for its transparent 
and science-based decision making process.  Hou asked that 
the U.S. prominently announce any Japanese decision to reopen 
its market.  He also suggested that DOH's move to reopen 
Taiwan's market contributed to the Legislative Yuan (LY) 
decision to freeze the DOH budget.  Hou said good news from 
Japan or Korea could ease the pressure here. 
 
------------------------------- 
 
TAIPEI 00001454  002 OF 003 
 
 
Pharma Policy Key to TIFA Talks 
------------------------------- 
 
¶5.  (U) The Director then raised pharmaceutical policy 
issues.  Makers of innovative pharmaceutical products are 
concerned that pricing policies discriminate in favor of 
generic drugs, to the detriment of Taiwan patients.  Hou 
responded that Taiwan's health care system is modeled on the 
Canadian system.  As such, government needed to find the 
balance between encouraging the best treatments and keeping 
costs in check.  The Director replied that research and 
development relies on innovator's ability to market their 
products and encouraged Taiwan to do more to encourage 
innovative products.  Deputy USTR Bhatia will participate in 
the May Trade and Investment Framework Agreement (TIFA) 
meetings and it is important for DOH to be engaged. 
 
---------------------------- 
Taiwan's Health Care Reforms 
---------------------------- 
 
¶6.  (U) Hou explained that Taiwan's health care system is in 
need of reforms.  "Global budgets" and "balanced billing" 
will be an important part of Taiwan's "second generation 
health care system," said Hou.  Global budgeting will cap the 
amount each hospital can be reimbursed by the National Health 
Insurance (NHI).  Balanced billing will reduce costs by 
capping the maximum reimbursement for each treatment. 
Patients can then purchase innovative drugs or medical 
devices for an additional charge.  This will allow the NHI to 
save money while speeding up the entry of new drugs and 
devices onto the Taiwan market, according to Hou.  CDC DG Kuo 
added that this could be good news for the pharmaceutical 
industry and would encourage more market flexibility.  DOH 
Counselor Hsiao acknowledged that U.S. companies opposed the 
idea, but suggested Taiwan could address their concerns after 
the new pharmaceutical law had been passed.  Hou added that 
DOH believes this will be a good system to get drugs into the 
Taiwan market quickly and that Taiwan is looking to Korea for 
advice on how to carry out reforms. 
 
--------------------- 
Making Biotech Bigger 
--------------------- 
 
¶7.  (U) The Director asked for DOH's view on Biotech issues. 
Hou responded that Taiwan policy is to encourage the 
development of biotech and was directing as much investment 
as possible to the field.  The National Science Council is 
overseeing the creation of a biotech science park near 
Hsinchu.  Counselor Hsiao added that Taiwan's National 
Institute of Health (NIH) had already moved to a location 
nearby.  On DOH's stance toward genetically modified 
organisms (GMO), Hou said his main concern was only to get 
information into the hands of consumers.  Hsaio noted that 
some groups opposed GMO products, but that the level of 
protest was insignificant compared to Japan or the European 
Union. 
 
------------------------------------- 
Hou/Kuo Meeting with HHS Sec Leavitt? 
------------------------------------- 
 
¶8.  (U) International Cooperation Director Peter Chang noted 
that Minister Hou had met with U.S. Health and Human Services 
Secretary Mike Leavitt in August 2005.  According to Chang, 
 
SIPDIS 
both sides agreed to pursue future meetings.  Chang asked if 
it was possible to arrange a meeting between Minister Hou and 
Secretary Leavitt on the margins of the WHO meeting in Geneva 
 
SIPDIS 
in May or for CDC DG Kuo to meet with Secretary Leavitt in 
Washington to discuss AI and pharmaceutical policy. 
 
¶9.  ACTION REQUEST: AIT/T would appreciate HHS views on the 
possibility of a meeting between Minister Hou and Secretary 
Leavitt in Geneva, as well as CDC DG Kuo with counterparts in 
 
TAIPEI 00001454  003 OF 003 
 
 
Washington. 
 
¶10.  (SBU) Comment: Post-SARS, AIT/T has had excellent 
cooperation with DOH on crisis prevention and management. 
This good feeling has spilled over into some aspects of our 
trade relationship, but DOH remains a very conservative 
organization filled with medical doctors turned bureaucrats 
who are unaccustomed to consultation, cooperation, and 
openness.  TIFA discussions will present us with an 
opportunity to strongly push for additional IPR protection 
for pharmaceuticals, fair market access, and a level 
regulatory playing field for U.S. health and medical products 
and services.  End Comment. 
YOUNG