VZCZCXYZ0038
RR RUEHWEB

DE RUEHTV #0622/01 0771456
ZNR UUUUU ZZH
R 171456Z MAR 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC 5883
INFO RUEHJM/AMCONSUL JERUSALEM 9342
RUEHAM/AMEMBASSY AMMAN 3809
RUEHEG/AMEMBASSY CAIRO 1820

UNCLAS TEL AVIV 000622 
 
SIPDIS 
 
SIPDIS 
 
STATE PLEASE PASS TO HHS/ FOR D/SEC TROY 
DEPT FOR OEC/IHA, NEA/AIA AND EB/OIA 
AMMAN FOR ESTH - BHALLA 
 
E.O. 12958: N/A 
TAGS: TBIO KIPR KWBG KPAL IS
SUBJECT: SCENESETTER FOR D/HHS VISIT TO ISRAEL 
 
This message has been cleared by Consulate General Jerusalem. 
 
¶1. (U) Post welcomes the visit to Israel of HHS Deputy Secretary 
Tevi Troy on April 2. Post offers the following update on its social 
and public health situation.  Your visit presents an opportunity to 
underscore our shared interests in matters of primary health care 
and global public health, including avian influenza, HIV/AIDS, and 
Tuberculosis -- especially drug-resistant TB.  Shared bilateral 
issues include development of cancer treatment capacity in the 
region, enhancing Israeli protection of intellectual property rights 
pertaining to pharmaceuticals, and helping address the weak public 
health care sector of the Palestinian Authority (PA) in the context 
of the Annapolis Peace Process. 
 
Economic Situation 
------------------ 
¶2. (U) Israel's economy has been riding a wave of unprecedented 
growth.  After four years of over 5 percent GDP growth, the economy 
will expand about 3.5 to 4 percent in 2008.  Inflation is in the 
three percent range, and unemployment has fallen to about seven 
percent.  Israel's high technology, tourism and construction sectors 
are all booming, and the country attracted $12 billion in foreign 
investment in 2007 on top of nearly $26 billion in 2006. 
 
¶3. (U) Over the last year, however, the New Israeli Shekel (NIS) has 
strengthened by approximately 16 percent - to the dismay of Israel's 
major exporters who have traditionally priced goods in US dollars, 
reflecting their major export market.  Exports ranging from textiles 
to military hardware now earn Israeli producers far less, and some 
Israeli factories have closed, having become uncompetitive.  Because 
export earnings fueled 40 percent of economic growth in recent 
years, steady expansion and job creation may also be at risk. The 
central bank recently lowered the discount rate by 0.5 percent to 
weaken the shekel and defend export competitiveness. 
 
¶4. (SBU) The strong expansion of the past five years has also 
resulted in widening wealth disparities in Israeli society, as 
workers in areas outside of growth sectors have not shared 
proportionately in the boom.  Socially-oriented politicians and the 
media criticize the concentration of wealth among well-educated, 
private sector professionals and industrial investors, and claim 
that the majority of working class Israelis see little growth in the 
real value of their income and assets.  Although the strong shekel 
has kept inflation in check, the pressure to keep wages low in the 
face of international competition has limited the real income growth 
of workers despite strong GDP growth.  The Haredi and Arab sectors 
of Israeli society have not shared in the prosperity, largely due to 
their lower labor participation rates. 
 
Public Health 
------------- 
¶5. (SBU) Israel has one of the world's best public health care 
systems, offering excellent medical care, world class research, and 
access to nearly all citizens.  It was extensively revamped and 
improved during the 1990s, with all healthcare provided by the 
private sector, but the GOI funding most costs assisted by private 
insurers payments.  Privately-paid healthcare is available parallel 
to the public care.  The system has shown strains recently, with 
mounting insurance fees on businesses, tight government budgets 
moving the system toward greater user co-payments, and the national 
health plan restricting access to some medications due to high 
pharmaceutical prices.  Government funding of health services has 
decreased over the past decade, both in real and in per capita 
terms, as the MOH budget dropped from 658 million shekels (NIS) in 
2001 to 561 million NIS in 2006.  A majority of Israelis oppose 
creeping privatization of the healthcare system, as household 
expenditure on healthcare for all income groups has tripled in the 
past decade.  Hospitals look to growing income from private clients 
to cover funding gaps; the growth of "medical tourism" in Israel has 
the potential to supplement public funds, and in 2006 provided USD 
40 million in revenue to Israeli institutions, which hosted nearly 
15,000 foreign patients.  Israel is becoming known for heart 
surgery, cosmetic surgery, and fertility treatment, among other 
specialties. 
 
¶6. (SBU) The healthcare of minority groups in Israel (Israeli Arabs, 
Druze, Bedouin) reflects both inequality of access and particular 
social circumstances.  The Israeli- Arab population has a markedly 
different health profile from that of Jewish-Israelis.  It is a 
younger population, with 41 percent under 14 years old (compared to 
25 percent for the Jewish population), and only 3.1 percent are over 
65 (compared to 12 percent for Jewish citizens).  Arab-Israelis 
suffer from a higher rate of diabetes (3.4 percent), a higher rate 
of cancers, and a higher rate of congenital disabilities.  This 
derives partly from a higher rate of smoking (26%) and also a high 
rate of co-sanguinous (inter-relative) marriage (39%). 
¶7. (SBU) Addressing the health issues of Arab-Israelis and of the 
underserved Palestinian population of the West Bank and Gaza is a 
problem facing the Israeli healthcare system.  PA financial, 
institutional and educational resources are insufficient to address 
the demand, leading to some burden being shifted to Israeli 
institutions.  The ability of Israel to offer the training and 
advanced medical care needed by Palestinians is limited by 
financial, personnel and mobility (border) factors.  Relations 
between Israeli and Palestinian medical practitioners remain 
excellent and professional; both sides regret the politicization 
that sometimes impedes contact. 
 
 
 
USAID Health Efforts 
-------------------- 
¶8. (U) There are many challenges which impact the delivery of health 
care services in the West Bank and Gaza: 
 
-- Limited movement and access of people and goods within the West 
Bank (checkpoints) and between the Palestinian territories and other 
countries (border crossings); 
 
-- On-going violence and insecurity; 
 
-- A fragile economy, limited capacity of families to pay for health 
care services, and high degree of donor dependence to support health 
care services, especially in the public sector; 
 
-- Deteriorating health care infrastructure and shortages of 
essential health commodities such as pharmaceuticals, medical 
supplies, medical equipment, and spare parts (most notably in the 
public sector). 
 
¶9. (SBU) As part of the Palestinian Reform and Development Plan, the 
Palestinian National Authority is working to strengthen the health 
sector through (1) improved quality of care (infrastructure, 
equipment, training, and other capacity-building), and (2) improved 
health care affordability (better allocation of health financing 
resources, greater accountability and transparency, and more 
cost-effective procurement of goods and services).  These priorities 
are also reflected in the Palestinian Ministry of Health's National 
Strategic Health Plan for 2008 - 2010. 
 
¶10. (SBU) The U.S. Government has contributed significant resources 
to help meet the challenges facing the health sector, support the 
Palestinian Authority's reform and development agenda, and 
strengthen the Palestinian health care system.  The U.S. Agency for 
International Development (USAID) currently supports maternal and 
child health and nutrition projects valued at over $23 million.  In 
addition, USAID expects to provide over $15 million of emergency 
medical assistance in FY08, including pharmaceuticals, medical 
supplies, equipment, and spare parts for the Ministry of Health and 
for eligible non-governmental organizations (NGOs).  USAID will 
continue support for health sector reform and development activities 
to help improve access to quality health care services for the 
Palestinian people. 
 
Other USG Assistance 
-------------------- 
¶11. (U) The State Department Bureau for Population, Refugees and 
Migration has committed $57 million in 2008 to support Palestinian 
refugees in West Bank and Gaza through the UN Relief and Works 
Agency for Palestine Refugees (UNRWA).  In 2008, the USG will also 
contribute $91 million to UNRWA for the provision of education, 
health and relief services to 4.5 million Palestinian refugees in 
Gaza, Jordan, Lebanon, Syria and the West Bank.  With 54 primary 
health clinics and one hospital, UNRWA is the second largest and 
most cost-effective provider of primary health services in the West 
Bank/Gaza.  Due primarily to the PA's inability to replenish vital 
medical supplies at its clinics, periodic public sector strikes, and 
the inability of refugees to pay normal prescription fees at PA and 
NGO health centers, the demand for UNRWA health services in West 
Bank/Gaza increased 20 percent in 2007 and a similar increase is 
expected 2008.  Besides primary health care, the USG assistance to 
UNWRA helps provide access to adequate water and sanitation services 
for refugee communities, and provides counseling and mental health 
support to vulnerable refugees, particularly children and youth. 
 
Israeli IPR Situation 
--------------------- 
¶12. (SBU) Israeli protection for Intellectual Property Rights (IPR) 
for pharmaceutical patents remains weak.  While Israel has indicated 
its interest in addressing the issue, and in particular, removing 
itself from the 301 Priority Watch List issued by USTR annually, 
there has not been a real effort in the past three years to change 
important legislation.  IPR in Israel is a shared domain of several 
ministries and departments, including the Ministry of Industry, 
Trade and Labor, Ministry of Health, Ministry of Justice and the 
Ministry of Finance.  A coordinated effort to affect change in 
Israel's IPR regime must address all the key players of the 
respective ministries. 
 
¶13. (SBU) Of particular importance is the inadequate protection 
against unfair commercial use of data generated to obtain marketing 
approval for pharmaceuticals.  Administrative delays at the Ministry 
of Health further erode the ability of U.S. pharmaceutical companies 
to obtain a fair term of protection, even if they submit 
registration requests in Israel immediately upon approval in the 
United States.  Israel's use of a pre-grant opposition system for 
patients impairs the ability of rights holders to protect 
innovation.  In 2005, Israeli legislation reduced the term of 
extension of pharmaceutical patent protection provided to compensate 
for delays in obtaining regulatory approval of a drug.  This 
legislation has discouraged U.S. companies from producing and 
marketing innovative pharmaceuticals in Israel. 
 
¶14. (SBU) New copyright legislation recently enacted is an 
improvement for Israel, particularly in formalizing protection of 
U.S. sound recordings under the 1954 bilateral treaty.  Our approach 
to the issue is to remind Israel that better IPR protection will 
protect its nascent biotechnology and high technology industries and 
encourage innovation.  Israel should pursue IPR in a manner that 
reflects its status as a partner in the U.S.-Israel FTA and its 
objective of becoming a full member of the OECD. 
 
JONES