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Reference ID	Created	Released	Classification	Origin
06WARSAW2064	2006-09-22 15:38	2011-08-24 00:00	UNCLASSIFIED//FOR OFFICIAL USE ONLY	Embassy Warsaw

null
Anne W McNeill  10/06/2006 04:25:28 PM  From  DB/Inbox:  Anne W McNeill

Cable 
Text:                                                                      
                                                                           
      
UNCLAS        WARSAW 02064

SIPDIS
CXWARSAW:
    ACTION: ECON
    INFO:   ADM MGT ORA FCS DCM AMB PAS POL

DISSEMINATION: ECOX
CHARGE: PROG

APPROVED: ECON:LGRIESMER
DRAFTED: ECON:DZIMMERMAN
CLEARED: NONE

VZCZCWRI711
OO RUEHC RUCPDOC RUEHKW RUEHBS
DE RUEHWR #2064 2651538
ZNR UUUUU ZZH
O 221538Z SEP 06
FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2065
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RUEHKW/AMCONSUL KRAKOW 1313
RUEHBS/USEU BRUSSELS

UNCLAS WARSAW 002064 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EUR/NCE/BPUTNEY 
STATE PASS TO USTR FOR DONNELLY/ERRION 
COMMERCE FOR 4232/ITA/MAC/EUR/OECA/MROGERS, JBURGESS, 
JKIMBALL 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR ECON PL
SUBJECT: POLAND: SECOND ROUND OF PRICE REDUCTIONS FOR 
INNOVATIVE DRUGS 
 
 
¶1. (U)  Sensitive but Unclassified/NOT for internet 
distribution 
 
¶2. (SBU)  At a September 15 meeting, Piotr Blaszczyk, the 
Acting Director of the Drug Policy and Pharmacy Department of 
the Polish Ministry of Health, issued a second round of price 
cuts to 27 pharmaceutical companies.  The price reductions 
vary by company and product, and appear to range from 4 to 23 
percent.  (Note: at a September 7 meeting with American 
companies, Deputy Minister of Health Boleslaw Piecha stated 
that the second round of price cuts would be from 5 to 8 
percent.  End Note.)  The price cuts apply only to sales of 
innovative drugs to hospitals, and affect approximately 100 
active substances comprising about 30 products.  The cuts 
could become effective as soon as September 29. 
 
¶3. (SBU)  At the September 15 meeting, the Health Ministry 
delivered individual papers to each company via sealed 
envelope detailing the price cuts.  The companies are 
required to respond to the Health Ministry by September 25 on 
whether they agree to the terms dictated by the Ministry 
(which could be done in writing) or wish to negotiate (which 
will be done in person on September 25 and 26).  Companies 
generally do not believe that negotiating will change the 
situation or defer the price cuts, and could cause the Health 
Ministry to discontinue using them as suppliers.  Some 
companies are considering not selling to the Health Ministry 
at the new prices as they will not be able to make a profit. 
The pharmaceutical companies all agreed that there was a 
total lack of dialogue and transparency throughout the 
process. 
 
¶4. (SBU)  The Health Ministry explained to the companies that 
it arrived at the new prices by asking other European 
countries for their pricing lists; by surveying 320 Polish 
hospitals for their pricing data (which had been previously 
negotiated with each pharmaceutical company on an individual 
basis); and by examining global sales data in IMS.  (Note: 
IMS is the leading global provider of business intelligence 
for the pharmaceutical and healthcare industries.  End note.) 
 The Health Ministry also directly requested more information 
from 27 companies on their products and pricing, to which 22 
companies reportedly responded.  Beyond this, the Health 
Ministry did not explain its methodology or evaluation 
criteria for selecting the products which were reduced in 
price.  According to the pharmaceutical companies, the 
products selected for price reductions tended to be their 
most expensive. 
 
¶5. (SBU)  Comment:  This second round of price cuts follows 
an initial round of price cuts which reduced the 
reimbursement price by up to 13 percent for imported 
pharmaceuticals and pharmaceuticals manufactured in Poland by 
foreign firms using imported active ingredients.  Prices were 
not cut for domestic producers in either round.  During the 
first round of cuts the Ministry of Health speciously 
explained that the cuts were necessary because of "exchange 
rate fluctuations".  Apparently learning from this 
experience, the Ministry offered no explanation for the 
second round of cuts.  American and European innovative 
pharmaceutical companies are increasingly frustrated by the 
Ministry's non-transparent price cuts and lack of dialogue. 
Post will continue to work with the companies to try to 
foster a constructive, transparent dialogue with the Ministry 
of Health. 
ASHE

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Viewing cable 06WARSAW2064, POLAND: SECOND ROUND OF PRICE REDUCTIONS FOR