VZCZCXRO8888
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #0527/01 0252348
ZNR UUUUU ZZH
R 252348Z JAN 07
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 4360
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHGV/USMISSION GENEVA 1766
RUEHNE/AMEMBASSY NEW DELHI 4337
RUCPDOC/USDOC WASHDC
RUEAHLC/HOMELAND SECURITY CENTER WASHDC

UNCLAS SECTION 01 OF 03 BANGKOK 000527 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE PASS USTR FOR B. WEISEL, C. WILSON 
STATE PASS USPTO 
HHS/OHGA FOR AMAR BHAT, ERIKA ELVANDER 
USDOC FOR JKELLY 
 
E.O. 12958:N/A 
TAGS: ECON ETRD KIPR TH
SUBJECT:  MORE COMPULSORY LICENSES LIKELY FOR THAILAND 
 
REF:  SECSTATE 9256 
 
¶1.  (SBU) Summary:  The Minister of Public Health announced his 
intention to issue further compulsory licenses next week for 
HIV/AIDS medicines and heart medicine.  Similar to its earlier 
compulsory license on another HIV drug last November, the Ministry 
did not discuss or negotiate with patent holders before making the 
announcement.  Local industry is disturbed that the Ministry is 
considering licensing not only AIDS drugs but is moving toward 
breaking patents on other, more profitable therapeutic medicines and 
is considering changes in their investments in Thailand.  End 
Summary. 
 
¶2.  (SBU) On January 24, Minister of Public Health Mongkol na 
Songkhla announced to the press his Ministry's intention to issue 
compulsory licenses on three patented drugs, two for HIV treatment 
and another for heart disease.  The Minister withheld further 
details until an official announcement could be made on Monday, 
January 29.  The Minister's statement follows on the compulsory 
license announced last November for efavirenz, an HIV medicine 
patented by U.S.-based pharmaceutical company Merck & Co.  Although 
Mongkol did not identify the drugs to be licensed in this round, we 
understand they will be Kaletra, an antiretroviral produced by 
U.S.-based Abbott Labs, and one of its component drugs, probably 
ritonavir; and Plavix, a heart medicine produced jointly by French 
firm Sanofi-Aventis and U.S.-based Bristol Myers Squibb (but 
distributed by Sanofi Aventis in Thailand).  The RTG was also 
reportedly considering Pfizer's anti-cholesterol statin Lipitor, but 
is now looking into similar drugs that are already off patent as an 
alternative to breaking patents. 
 
¶3.  (SBU) The RTG intention to compulsory license Kaletra was 
unsurprising, health activists in and out of the government have 
long expressed a desire to find a cheaper version of this expensive 
second-line antiretroviral.  The RTG has committed to expand 
treatment to more HIV/AIDS patients and as a percentage of those 
patients inevitably develop resistance to first-line generic 
regimens, there will be both an increasing number and proportion of 
patients who require second-line drugs such as Kaletra.  Health 
officials have long expressed their fears that the commitment to 
treatment will stretch health budgets and possibly place at risk the 
financial situation of the entire universal health coverage system. 
 
¶4.  (SBU) Entry into other therapeutic medicines such as the heart 
medicine Plavix opens a new front.  Reportedly, an interagency 
committee on compulsory licenses met January 8 and developed a 
target list of drugs in four disease categories for potential future 
compulsory licenses.  In addition to cardiovascular drugs Lipitor 
and Plavix and the HIV drug Kaletra, the committee listed four 
cancer drugs and two antibiotics.  The committee recommended Kaletra 
and Plavix be next in line to be licensed, but it is unclear what 
timeline the others may follow. 
 
¶5.  (SBU) According to one member of the compulsory license 
committee, the Ministry of Public Health (MoPH) will follow a 
similar procedure to that done with efavirenz.  The Department of 
Disease Control will issue the license for Kaletra, while the 
Department of Medical Services will handle the process for Plavix. 
Both agencies have been instructed to send official letters of 
notification to the Department of Intellectual Property and to the 
patent holder once the compulsory license has been officially 
announced.  The committee does not believe cabinet approval is 
necessary for this round of compulsory licenses and it does not 
appear to have been discussed at that level. 
 
ACTIVIST OFFICIALS DRIVING MORE CL'S 
------------------------------------ 
 
¶6.  (SBU) The step to issue compulsory licenses is increasingly seen 
as a populist move by the military-installed government.  In a new 
government that is still feeling its way on how to govern, Mongkol 
is an activist Minister who has seen an opportunity to make a bold 
step forward in improving access to medicine with little opposition 
from other parts of the government.  A relatively small group of 
people is driving the compulsory licenses.  Dr. Sanguan 
Nitayaramphong, Secretary General of the National Health Security 
Office which manages the universal health care program and chairman 
of the interagency committee on compulsory licenses, apparently 
began the process of identifying which drugs to consider for 
compulsory licenses.  However, the main actor behind the process is 
considered to be Dr. Suwit Wibulpolprasert, Special Advisor on 
Health Economics at the MoPH.  Suwit had been an opponent of 
 
BANGKOK 00000527  002 OF 003 
 
 
pharmaceutical provisions in the proposed US-Thai FTA.  Dr. Suwit 
also this week spoke before a WHO Executive Board meeting in Geneva 
railing against pharmaceutical firms that use virus samples from 
Thailand to produce vaccines, but sell it back at unfair prices, 
saying "when the pandemic occurs, they survive and we die".  HHS is 
reportedly drafting a strong response. 
 
¶7.  (SBU) The expected spiraling financial outlays for HIV treatment 
and other medical care is an obvious motive for proceeding ahead 
with compulsory licenses, but less clear is why the MoPH has 
declined to negotiate or seriously discuss with pharmaceutical firms 
before issuing the licenses.  Dr. Sanguan and Dr. Suwit have each 
said privately and publicly that they had undertaken negotiations 
with the pharmaceutical firms and had made little progress, thus 
necessitating moving forward with the licenses.  The pharmaceutical 
firms, on the other hand, insist they never entered into any formal 
negotiations or discussions, though they have not publicly 
challenged the RTG on this point.  An executive VP of Sanofi-Aventis 
reportedly met with Minister Mongkol yesterday and offered to 
discuss prices on their antiplatelet agent Plavix, but asked that a 
CL not be issued as it would compromise their ability to negotiate 
later.  The Minister responded positively, but nevertheless notified 
the press only hours later that the license would go ahead (the 
Minister reportedly told Sanofi today he had not made the statement 
and that there had been a leak, but somehow most Bangkok papers 
sourced the information directly to him).  The local office of 
Abbott Labs has requested a meeting with the Minister as well, but 
the request was pushed down to the Department of Disease Control 
whom they will meet on Friday. 
 
¶8.  (SBU) The local industry pharmaceutical association, Prema, is 
reacting strongly to the move to issue licenses for not just 
HIV/AIDS drugs but other therapeutic medicines.  Prema issued a 
strongly worded press release today that expressed their alarm and 
suggested that a number of major firms will be reexamining their 
investment strategies in Thailand.  The statement aims to raise 
concerns over the already battered investment climate in Thailand. 
 
¶9.  (SBU) Ambassador Boyce lunched with PM Surayut on Wednesday and 
brought up the compulsory license issue, noting that consultation 
with affected firms was important for transparency.  Surayut 
appeared to be familiar with the issue and while not offering 
comment on it said he would bring it up with the Minister of Public 
Health.  The Ambassador also brought up the issue in his meeting 
today with Foreign Minister Nitya (reported septel). 
 
Update on individual CLs 
------------------------ 
 
¶10.  (SBU) Merck has heard that MoPH has ordered 66,000 bottles of a 
generic version of their drug efavirenz from Indian generic Ranbaxy, 
and that the first shipment should be arriving the second week of 
February.  The Government Pharmaceutical Organization (GPO) 
apparently was able to procure the generic for 700 baht per bottle 
(a one-month supply), approximately 180 baht less than Merck had 
been able to offer.  Thai FDA has approved the 200 mg version of 
generic efavirenz and will soon approve the more common 600 mg 
version.  Merck believes they are still in discussions with the RTG 
and may be able to present further price reductions. 
 
¶11.  (SBU) Abbott Labs has heard that the RTG is considering 
importing generic versions of its antiretroviral Kaletra from either 
Indian generic Cipla or Hetero.  Abbott does not believe that the 
WHO has qualified the generic from either company.  Abbott also 
expects to complete the registration process in March for a new 
heat-stable version of the drug which does not require 
refrigeration.  The new version has a reduced pill count (4 instead 
of 6 per day) and no dietary restrictions.  Abbott is uncertain 
whether a CL on Kaletra would cover its new version as well, but 
noted that no generic companies have yet to produce the new 
version. 
 
¶12.  (SBU) Comment:  Although we have been critical of the process 
the RTG has followed on issuing compulsory licenses, providing cheap 
antiretrovirals to poor AIDS patients is certainly a worthy goal. 
However, we and industry are concerned that a new front has opened 
and Thailand now seems to be moving to break patents on drugs simply 
because they are highly priced, and not necessarily for diseases 
that afflict the poor.  Embassy would appreciate any guidance on 
whether compulsory licenses on drugs not intended to treat pandemic 
diseases are treated differently under WTO TRIPS regulations.  We 
would also appreciate any guidance on whether points provided in 
 
BANGKOK 00000527  003 OF 003 
 
 
reftel have changed given today's new information. 
BOYCE