VZCZCXRO7977
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #0488/01 0451014
ZNR UUUUU ZZH
R 141014Z FEB 08
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 1824
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHGV/USMISSION GENEVA 1967
RUCPDOC/USDOC WASHINGTON DC

UNCLAS SECTION 01 OF 03 BANGKOK 000488 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE PASS USTR 
USDOC FOR 4430/EAP/MAC/OKSA 
 
E.O. 12958:N/A 
TAGS: ECON ETRD KIPR TH
 
SUBJECT:  NEW HEALTH MINISTER PROMISES REVIEW ON COMPULSORY 
LICENSES 
 
¶1.  (SBU) Summary:  Thailand's new pro-business government has 
quickly announced plans to review the previous administration's 
controversial policy of issuing compulsory licenses (CLs) on 
patented medicines.  In his last days in office the outgoing Health 
Minister paved the way for continuation of the CL policy, signing 
four more CLs on cancer drugs, following on three other CLs issued 
over the previous 16 months.  The new Minister promised to review 
the legality of procedures followed and the appropriateness of the 
policy.  He has suggested that doing away with CLs is needed to 
stave off trade sanctions from a negative Special 301 review.  At 
the former Minister's request, a WHO-led delegation is also carrying 
out a review of the CL procedures but said it does not plan to issue 
a judgment on whether procedures in WTO rules and Thai law were 
followed correctly.  End summary. 
 
¶2.  (SBU) On his first day in office on February 7, newly 
inaugurated Minister of Public Health Chaiya Sasomsab promised to 
review his predecessor's policy of overriding patents on 
pharmaceutical products.  In a February 12 Cabinet meeting, PM Samak 
approved the review and instructed Deputy Prime Minister and 
Commerce Minister Mingkwan Saengsuwan to meet with MFA and Health 
Ministry officials to discuss the CL policy and review past 
decisions.  Minister Chaiya indicated the review would be completed 
by March 30. 
 
¶3.  (SBU) During his 16-month term in the coup-installed government, 
former Minister Mongkol na Songkhla issued three compulsory licenses 
(CLs) on patented anti-retrovirals (for AIDS treatment) and a blood 
thinner, citing unreasonably high prices and the inability of 
patients to afford the medicines.  In his closing days in office, 
Mongkol signed authorizations for CLs on four more drugs used to 
treat cancer patients, though the Ministry has yet to implement the 
licenses by importing generic copies.  The four drugs include 
Novartis' breast cancer drug letrozole and its leukemia and 
gastrointestinal cancer drug imatinib, Sanofi-Aventis' breast and 
lung cancer drug docetaxel, and lung cancer drug erlotinib from 
Roche.  (Note:  U.S. companies manufacture two of the three drugs 
originally affected by CLs, the most recent three are made by 
European pharmaceutical companies.)  Although MOPH issued a CL for 
imatinib, the Ministry stated that it would not exercise the CL 
unless there were access problems under Novartis' Glivec 
International Patient Access Program.  Under the GIPAP program, MOPH 
negotiated a deal for free access to imatinib for any Thai patient 
who has an income of less than 1.7 million Baht per year.  The only 
CL implemented thus far is for Merck's efavirenz, though Merck 
claims that the number of patients using the generic product is a 
small fraction of the number that Minister Mongkol claimed would be 
served.  Other already issued CLs may be difficult to implement.  It 
is not clear whether a generic exists for Abbott's Aluvia, and 
Sanofi-Aventis is engaged in a protracted legal battle in both 
Thailand and India over implementation of the CL for Plavix. 
 
¶4.  (SBU) Although Minister Chaiya was not specific on the scope of 
the upcoming review, the pharmaceutical industry expects it will 
consider whether to proceed with the three CLs on cancer drugs, but 
not necessarily on whether to withdraw the three CLs already 
implemented.  Chaiya earlier told journalists that he would review 
whether the Ministry had followed the correct procedures in issuing 
the compulsory licenses, saying, "It might have been a politically 
correct decision, but not legally correct."  Chaiya reportedly 
instructed health officials to determine whether the Cabinet had 
approved the policy before the compulsory licenses had been issued, 
or had been notified after the fact.  Chaiya also said he would like 
to determine whether the number of patients needing the medicines 
and their access to them necessitated issuing CLs.  Representatives 
of drug manufacturers would be invited to discuss the legal aspects 
of the decision as well as the commercial impact.  As reported in 
the press, health activists met with the new Minister on February 8 
and protested the plans to review the policy, saying that Thai law 
had been appropriately followed.  More protests have followed on a 
daily basis. 
 
¶5.  (SBU) The Ministry of Public Health (MoPH) under the former 
Minister posted a 56-page report on its website explaining the 
decision behind the three additional CLs on cancer drugs, citing 
30,000 deaths annually from cancer in Thailand and the high expense 
of the drugs used to treat patients.  The report paints a portrait 
of extensive efforts to negotiate transparently with pharmaceutical 
companies to reach agreement on prices, and frequent consultation 
with other RTG ministries.  Industry takes a different point of 
view, claiming that the MoPH did not negotiate in good faith, 
refusing to budge from its initial demand of companies to lower 
their prices to within five percent of generic prices.  MoPH's 
estimate of the number of patients that could be treated with 
 
BANGKOK 00000488  002 OF 003 
 
 
generic medicines is substantially higher than industry's 
estimates. 
 
New government takes new tack 
----------------------------- 
 
¶6.  (SBU) As a newcomer to the health field, Minister Chaiya's own 
views on the appropriateness of the previous government's CL policy 
are unknown.  The coalition leader People Power Party has espoused a 
pro-business philosophy, has promised to review and revise some of 
the previous government's other controversial economic policies, and 
may do the same with CLs.  In Chaiya's recent statements he has 
suggested replacing the CL policy with an increased budget to cover 
essential drugs for those who cannot afford them.  Minister Chaiya 
recently cited concerns over the U.S.'s upcoming Special 301 review 
on Thailand's protection of intellectual property as a motivation 
for initiating the CL review.  Local press reported that Chaiya 
named the CLs as the main reason for last year's downgrading of 
Thailand to the Special 301 Priority Watch List, and blamed that 
downgrading on Thailand's loss of certain trade benefits of the U.S. 
Generalized System of Preferences (GSP) program.  He said he was 
concerned that the budget savings from using CLs would not match the 
losses in trade benefits. 
 
¶7.  (SBU) Chaiya's characterizations of last year's changes in the 
GSP program and the PWL decision are inaccurate, but his views are 
widely shared by the Thai public and within the RTG.  Despite 
numerous meetings between U.S. Embassy officials and Ministry of 
Commerce officials explaining the graduation process in the GSP 
program and its lack of a relationship to the Special 301 decision, 
officials at the Department of Intellectual Property (DIP) continue 
publicly to cite CLs as a prime reason behind both the PWL decision 
and Thailand's loss of GSP benefits. 
 
WHO does its own review 
----------------------- 
 
¶8.  (SBU) At the request of the former Health Minister, a delegation 
led by the World Health Organization and joined by officials from 
the WTO, UNDP, UNCTAD and academic advisors visited Thailand last 
week to review the procedures followed in issuing and implementing 
compulsory licenses.  In a February 6 meeting with Embassy officials 
from the U.S., EU, Switzerland, Australia and Brazil, the delegation 
said their mission was guided by World Health Assembly resolution 
60.30 to provide technical and policy support on flexibilities 
provided in WTO rules to promote access to medicines.  Although the 
delegation said they would be providing policy advice, WHO's Dr. 
German Velasquez said they could not comment on Thailand's domestic 
matters, and declined to describe their findings thus far on the 
procedures followed by Thailand in issuing the CLs.  The delegation 
said they would be issuing a report "within ten days," but that it 
would be released only to the RTG and not to other WHO member 
governments.  Delegation members insisted their report would be 
factual and would not judge the appropriateness of the policy one 
way or the other.  Comment:  Without a wider distribution of the WHO 
report, there is concern that the report may be selectively quoted 
by partisans to manipulate the CL debate.  End comment. 
 
¶9.  (SBU) In addition to RTG health officials, the delegation also 
met with health activists and separately with the pharmaceutical 
industry.  Industry representatives spoke positively about the 
meeting as the delegation allowed substantial time for them to 
detail their complaints of the RTG's lack of transparency, 
communication and due process during the CL process.  However, 
industry was unable to elicit much information about the progress of 
the delegation's review.  Privately, one of the delegation's members 
said there were notable discrepancies between industry's and the 
RTG's recounting of events. 
 
Next steps 
---------- 
 
¶10.  (SBU) The European Union's representative informed Embassy that 
his mission had drafted a letter for EU Commissioner Mandelson's 
signature requesting the new Health Minister to "take a fresh look" 
at the CL policy.  The local EU rep has suggested that the U.S. 
coordinate on a joint letter to the Minister or to send its own 
separately. 
 
¶11.  (SBU) In a meeting with DCM on February 13, representatives 
from U.S. pharmaceutical companies said they hoped the new 
administration would continue the Joint Committee between industry 
and the Ministry of Public Health to work on improving public 
health, including access to medicines.  Future meetings would depend 
 
BANGKOK 00000488  003 OF 003 
 
 
on a green light from the Minister.  Industry also plans more public 
relations activities, including a life science innovation 
conference.  Companies are preparing to work more closely with local 
press, and will introduce a set of "advertorials" explaining the 
health contribution to Thailand of a number of drugs. 
 
Comment 
------- 
 
¶12.  (SBU) It is apparent that before leaving office former Minister 
Mongkol did all he could to force the hand of the new government on 
the CL issue.  However, the new government appears keen to ease the 
minds of a rattled business community, and has placed among its top 
priorities addressing issues that concerned foreign investors during 
the coup government.  The government may quietly shelve the 
compulsory license policy as a step in that direction.  However, it 
may not withdraw the three compulsory licenses that have already 
been implemented, which were among the few popular actions taken by 
the last government. 
JOHN