VZCZCXRO0782
OO RUEHCHI RUEHDT RUEHHM
DE RUEHJA #2230/01 2270959
ZNR UUUUU ZZH
O 150959Z AUG 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5795
RUEHPH/CDC ATLANTA GA
INFO RUEAUSA/DEPT OF HHS WASHINGTON DC
RUEHRC/USDA FAS WASHDC
RHEHNSC/NSC WASHDC
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMUNA/CDR USPACOM HONOLULU HI//J07/CATMED/CAT//
RUEHBK/AMEMBASSY BANGKOK 8079
RUEHBY/AMEMBASSY CANBERRA 1008
RUEHFR/AMEMBASSY PARIS 1017
RUEHGV/USMISSION GENEVA 7597

UNCLAS SECTION 01 OF 02 JAKARTA 002230 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/MTS, G/AIAG AND OES 
USAID FOR ANE/CLEMENTS AND GH/CARROLL 
DEPT ALSO PASS TO HHS/WSTEIGER/MSTLOUIS AND HHS/NIH 
GENEVA FOR WHO/HOHMAN 
 
E.O. 12598: N/A 
TAGS: TBIO EAGR CASC KHIV PGOV KFLU ID
SUBJECT: AMBASSADOR DISCUSSES SAMPLE SHARING AND VACCINE WITH BAXTER 
VACCINES PRESIDENT 
 
¶1. (SBU) Summary. The President of Baxter Bioscience's Vaccine 
Business, Kim Bush, told the Ambassador on August 14 that he 
believes the Indonesians would welcome a solution to the AI virus 
sample sharing impasse.  Negotiations among a smaller group of key 
stakeholders could best resolve the issue.  He identified possible 
steps including use of existing domestic industry-government 
agreements that would provide a reasonable royalty arrangement, such 
as the 0.5 percent royalty paid to sample suppliers in certain 
protocols. Bush also described the status of Baxter's human AI 
vaccine and current negotiations with the Government of Indonesia 
(GOI), including their possible involvement in clinical trials and 
the development of a downstream "fill and finish" vaccine production 
partnership.  Baxter requested that the Embassy urge key WHO 
officials to visit commercial laboratories, such as Baxter's U.S. 
facilities, to witness cell culture vaccine-based technology for 
possible application in developing countries.  End Summary. 
 
---------------------- 
Sample Sharing Impasse 
---------------------- 
 
¶2. (SBU) Based on numerous Baxter-GOI meetings, Bush offered 
insights into the GOI perspective on sample sharing.  In his 
opinion, multilateral discussions have stalled and negotiating 
positions are widening rather than narrowing.  Bush urged that the 
USG consider quiet, focused discussions involving key Indonesian 
officials and fewer international players.  Solving a complex 
problem on the public stage is not conducive to a quick resolution 
to the impasse, since the media are following the issues closely. 
Bush noted that fewer people away from the public eye would allow 
for calmer fact-based negotiations and would more likely result in 
real progress. 
 
¶3. (SBU) In addition to GOI concerns about access to a pandemic 
vaccine for its population and a share of commercial rewards or 
success, Bush emphasized the importance of respect. He felt that a 
Washington-initiated invitation to key GOI figures would go a long 
way in building up better relations for a faster and more productive 
resolution to the impasse. 
 
¶4. (SBU) Bush also noted that the GOI appears naove in its 
understanding of the commercial vaccine business.  Bush explained 
that Dr. Triono Soendoro, Director of the GOI National Institute of 
Health Research and Development and other key MOH figures have never 
had the experience of working out material transfer agreements 
(MTAs) with industry.  They don't have a sense of realistic royalty 
sharing, nor an appropriate model text.  Although GOI officials have 
ideas of what they want to see in a final agreement, they don't know 
how to reasonably get there.  Bush recommended that negotiators find 
a commercial precedent that works and adapt it in Indonesia.  For 
example, he noted that domestic U.S. pharmaceutical producers pay a 
0.5 percent royalty to sample suppliers in certain protocols. Baxter 
has previously worked arrangements with the U.S. NIH and the U.S. 
Centers for Disease Control (CDC). Bush felt that if negotiators 
provided the GOI with fact-based information on how business works 
and how governments can license technology, sample sharing 
negotiations could move forward faster. However, Bush did not offer 
ideas of how this could be worked within the context of WHO 
influenza surveillance network. 
 
----------------------- 
Baxter-MOH Negotiations 
----------------------- 
 
¶5. (SBU) Bush clarified the terms of the Baxter-GOI MOU.  Despite 
press articles to the contrary, Bush noted that Baxter has never 
received virus samples directly from MOH, nor is the company seeking 
virus samples in the future. Baxter is committed to working 
exclusively through the WHO collaborating centers to acquire virus 
strains. Bush explained that Baxter developed the AI vaccine from 
the Indonesian strain that used CDC-released samples from 2005, not 
later samples.  Baxter has completed initial testing in Europe, with 
Phase II clinical trials in Hong Kong and Singapore to be completed 
by the end of the month. Baxter intends to conduct a pediatrics 
trial and a Phase III trial prior to releasing the vaccine.  Baxter 
 
JAKARTA 00002230  002 OF 002 
 
 
has offered Indonesia a chance to participate in the Phase III trial 
but contrary to MOH press statements, has not yet reached any 
agreement. 
 
¶6. (SBU) Bush clarified that the Baxter-MOH MOU signed in February 
is simply a framework agreement that will incorporate future 
agreements addressing specific issues such as technology transfer 
for downstream production of vaccine.  Bush noted that the Baxter 
MOU only references bulk vaccine transfer for a "fill and finish" 
production partnership.  The GOI recognizes its own limitations for 
vaccine development and is not seeking anything beyond a bottling 
role in vaccine production. 
 
¶7. (SBU) Bush also asked the Embassy's help in urging WHO to do 
field site visits to better understand cell-culture based vaccine 
technology.  Bush noted that WHO remains dubious about the 
application of cell-culture vaccine technology for application in 
developing countries but that this technology was of critical 
importance to meeting global demand in the event of a pandemic. 
Bush reported that Baxter had invited WHO officials to tour Baxter 
laboratories to better understand the merits of this new 
technology. 
 
¶8. (SBU) Bush summarized that Baxter does not want to find itself in 
the crossfire between Indonesian and WHO negotiations but would be 
willing to play a constructive role, as appropriate. Baxter wants 
quick resolution of the sample sharing impasse in order to be able 
to obtain current samples from WHO collaborating centers.  Bush 
pledged to continue to communicate with the Embassy in order to help 
all parties understand the industry position. 
 
¶9. (SBU) Comment:  Embassy believes Baxter officials are operating 
in good faith with their recommendations.  Embassy concurs that 
getting key policymakers to meet away from the public eye may be 
more effective in hammering out resolution to the myriad of sample 
sharing issues.  Embassy also believes that if one of the Indonesian 
key issues (for example, a royalty sharing arrangement along the 
lines of those already in use with other sample suppliers) could be 
separated out from the others for priority discussion and perhaps 
resolution, the MOH may be persuaded to resume sample sharing while 
remaining issues are still under discussion. 
 
HUME