VZCZCXYZ0057
OO RUEHWEB

DE RUEHJM #2486 1671547
ZNR UUUUU ZZH
O 161547Z JUN 06
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2838
INFO RUEHXK/ARAB ISRAELI COLLECTIVE IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE

UNCLAS JERUSALEM 002486 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA FOR FRONT OFFICE; NEA/IPA FOR 
WILLIAMS/GREENE/WATERS/WAECHTER; NSC FOR 
ABRAMS/DORAN/LOGERFO; TREASURY FOR NUGENT/ADKINS; USAID FOR 
BORODIN 
 
E.O. 12958: N/A 
TAGS: PHUM ECON EAID PGOV KWBG
SUBJECT: PALESTINIAN PHARMACEUTICAL COMPANIES WANT TO 
PARTNER WITH DONORS 
 
 
¶1.  (SBU) Summary:  Palestinian pharmaceutical companies 
called on donors, in a June 14 briefing, to coordinate with 
them on relief efforts and consider procuring 
Palestinian-manufactured drugs.  They also asked donors to 
intervene with Israeli authorities to facilitate the passage 
of their products and raw materials across checkpoints.  The 
drug companies underscored their financial difficulties from 
a drop in sales and unpaid bills for supplies provided to the 
Palestinian Authority (PA) Ministry of Health (MOH).  End 
summary. 
 
Drug companies call for coordination, 
offer to help humanitarian efforts 
------------------------------------- 
 
¶2.  (SBU) Members of the Union of Palestinian Pharmaceutical 
Manufacturers (UPPM), including Bassim Khoury (Pharmacare), 
Iyad Masrouji (Jerusalem Pharmaceuticals), and Talal 
Nasiruddin (Birzeit Pharmaceutical), met with donors and NGOs 
June 14 to discuss their current challenges and how they can 
help the donor community provide humanitarian assistance to 
the Palestinians.  Nasiruddin called upon donors to 
coordinate with the UPPM, the representative body of six drug 
companies located in Ramallah (4), Beit Jala (1), and Gaza 
(1).  He said that with USD 38 million in revenues, the 
Palestinian drug companies are well-positioned to assist with 
local manufacturing capacity and a far-reaching network 
targeting medical staff in the hospitals and clinics in the 
West Bank and Gaza.  Furthermore, UPPM can help with 
monitoring indicators and alerting the international 
community to imminent crises in the health sector. 
 
Donors should consider procuring 
Palestinian-manufactured drugs 
-------------------------------- 
 
¶3.  (SBU) Nasiruddin urged donors to consider buying 
Palestinian-made drugs, noting that local drug companies 
produce 1,070 different high-quality drugs at reasonable 
prices.  Six companies have ISO 9000 and five have ISO 14000 
certifications, while the top four are compliant with Good 
Manufacturing Practices (GMP) and have been inspected by 
several international groups.  Locally manufactured generics 
comprise 60 percent of an estimated USD 70 to 90 million drug 
market, which has an average annual per capita spending of 
USD 23.  The PA MOH tenders 20 percent of its annual drug 
needs to Palestinian pharmaceutical companies.  These drug 
needs are based on the MOH essential drug list, of which 
Palestinian companies manufacture 156 out of 472 products, 
according to Nasiruddin. 
 
Calling on donors to intervene with GOI for 
drug distribution and raw material imports 
------------------------------------------- 
 
¶4.  (SBU) Nasiruddin called on the international community to 
facilitate the transport of drugs through Israeli 
checkpoints.  Border closures, especially those at Karni, 
have raised transportation costs and made it difficult to 
import raw materials, he said.  Over the last five years, 
these companies have invested USD 40 million in upgrading 
equipment and facilities, but have found it increasingly 
difficult to get the materials that they need because of the 
closures. 
 
Financial difficulties from 
depressed sales and unpaid bills 
-------------------------------- 
 
¶5.  (SBU) Nasiruddin warned that local drug companies are 
facing financial difficulties due to unpaid bills by the MOH 
and a drop in revenues.  Thus far, the MOH owes USD 5 million 
to the Palestinian drug manufacturers for purchases made over 
the last twelve months.  In addition to unpaid bills, the 
absence of PA salaries has depressed revenues, Khoury said, 
pointing to evidence that drug sales typically spike the week 
that salaries are paid.  Now, as a result of reduced incomes, 
people are spending less on drugs and more in food.  This 
reduced cash flow has forced one company, Birzeit 
Pharmaceutical Co., to apply for a bank loan, for the first 
time in its corporate history, in order to sustain its 
operations. 
STEVENS