UNCLAS LJUBLJANA 000381

SIPDIS


USDOC FOR 4232/MAC/EUR/EERIS/CEEBIC/BURGESS/ROGERS
USDOC FOR MAC/ADVOCACY/NUGENT
VIENNA FOR COMMERCIAL COUNSELOR

SENSITIVE

E.O. 12958: N/A
TAGS: BEXP ELAB ETRD PHUM SENV AMGT SI
SUBJECT: SLOVENIA: COM PRESSES HEALTHMIN FOR TRANSPARENCY
IN ONCOLOGY INSTITUTE TENDER

REF: A) LJUBLJANA 292

B) 03 LJUBLJANA 1103

Sensitive but Unclassified. Please protect accordingly.


1. (SBU) SUMMARY: In a 16 April meeting, Minister of
Health, Dusan Keber, assured COM that a public tender
competition to equip a Slovenian medical facility with high-
tech scanning equipment will be fair and transparent. Keber
noted that Meditrade (General Electric's distributor in
Slovenia and the only U.S. company expected to submit a bid)
will have the same chance as any other bidder to win the
estimated Euro 7 million tender. He indicated that the
Ministry of Health (MoH) will appoint a commission to assess
bids and award the contract. Local GE representatives have
expressed concerns about the overall transparency of the
process and noted traditional MoH bias in favor of Siemens
or Philips. COM also raised U.S. pharmaceutical companies'
concerns about the MoH drug insurance reimbursement program
and the associated financial losses incurred by the U.S.
companies as a result of the plan. Keber reported that it
was too soon to assess the new program's overall benefit,
but that he remained confident of its long-term
sustainability. Finally, Keber pledged to raise concerns
about the provision of statistics on trafficking in persons
with his fellow cabinet members, promising immediate
assistance from his staff, if necessary. END SUMMARY.


2. (U) On 16 April, COM, accompanied by Pol-Miloff and FSN
Commercial Specialist called on HealthMin Dusan Keber to
advocate on behalf of Meditrade-GE in its bid for a Euro 7
million tender to equip either the new Oncology Institute or
another state-run medical facility with new equipment. The
tender is due to open in either May or June. COM also
discussed the record of the recently adopted health reform
package. Simon Vrhunc, MoH State Secretary for Health
System Organization, also participated in the meeting.

Equipping the new Oncology Institute
---------

-----


3. (U) The approximately Euro 7 million tender will be, by
far, the most valuable offer in the Slovenian healthcare
system for the next couple of years. The tender is expected
to include the following equipment: PET/CT scanner; magnetic
resonance; computer tomography; 2 gamma cameras; digital
mamography x-ray system; 3 ultrasounds; 3 classical x-ray
units; and 45 monitors for patient care. According to
Meditrade-GE, winning the tender is essential to establish
market presence and position for future sales. [NOTE: GE's
20 percent market-share in Slovenia is well below its 30-35
percent European average. END NOTE].


4. (SBU) COM informed Keber of Meditrade-GE's interest in
submitting a bid to supply the new Oncology Institute's
medical equipment. He highlighted GE's international
reputation as an industry leader -- known for its superior
quality at reasonable costs. COM stressed the importance of
having an open, fair, and transparent tender process -- one
where impropriety charges would not stand a chance.


5. (SBU) Keber informed COM that a tender would be announced
after hospital directors and public officials sort out what
type of equipment is needed and to which institute it will
go. [NOTE: The new Oncology Institute is battling the more
established Radiology Institute for the equipment. END
NOTE]. The Minister told COM that parliament had queried
him regarding this tender during its interpellation
proceedings examining his record, satisfying him that there
may be outside pressure mounting already to influence the
bidding process. [NOTE: The National Assembly conducted
interpellation proceedings (vote of confidence) against the
Ministers of Health and of Interior, which they both
survived (Ref A). END NOTE]. Nonetheless, the MoH will
appoint a Commission to review all of the bids in accordance
with public procurement regulations, and Keber assured COM
that the tender would "fair" and "transparent."


6. (SBU) Keber explained that the Commission will have to
consider various factors relating to the tender in order to
keep it in line with the overarching MoH cost-containment
policy. Whereas the equipment under consideration could
carry-out up to 5,000 examinations per year, the demand thus
far has been limited. Only 20 patients in Slovenia required
such exams in Slovenia in 2003, according to Keber, and they
were sent to Austria. As such, Keber said that the
Commission will have to conduct a cost benefit analysis to


determine whether the equipment under consideration is even
desirable in light of the low demand and impetus to reduce
costs. COM noted that the purchase of the new equipment
could help establish Slovenia as a regional center for these
types of examinations while defraying some of the costs.
Keber underscored his earlier point about the transparency
of tenders run by the MoH and expressed confidence that the
"best producer will win," noting that GE's Meditrade "can
win without your support."

Health Care Reforms; U.S. Pharmaceutical Companies
-------------- --------------


7. (SBU) When COM asked about the benefits brought by the
recent healthcare reforms, Keber indicated that five months
was not sufficient time to assess the program's overall
benefits. He said preliminary estimates show savings in the
realm of US $10 million (approximately 4 percent of total
annual drug costs of the state-run Health Insurance Fund).
COM noted that U.S. pharmaceutical companies representatives
have voiced concern over the drug reimbursement plan, and
its impact on their ability to introduce new drugs to the
market in Slovenia (ref B). Keber told COM that while
pharmaceutical companies, both innovative and generic,
continue to voice concerns, new data protection laws,
mandated by the EU and already in place in Slovenia, would
ensure that profits will go back to the original producers
of drugs.

TIP Report
--------------


8. (SBU) COM alerted Keber to concerns about GoS abilities
to provide information requested by the Embassy for the
upcoming DoS Trafficking In Persons Report. Keber promised
to raise the issue with fellow cabinet members and pledged
to provide any missing information for the MoH immediately.
[NOTE: The relevant GoS office was already alerted to the
need for timely information and the missing information was
provided even as COM and Keber were meeting. END NOTE].


9. (SBU) COMMENT: Having survived a parliamentary motion to
replace him, Keber is well aware that a number of parties
with various interests will be closely following and
monitoring the Euro 7 million tender. With Siemens
equipment visible in most of the country's clinics and
hospitals, the medical sector has been traditionally closed
to U.S. companies thus far. The MoH's tendering processes
have been under the microscope recently, as the nation's
largest hospital (Ljubljana's Klinicni Center) procured
expensive and unreliable equipment in a questionable tender
process in September 2003. According to GE-Meditrade
representatives, the tender process is much further along
than Keber's comments would lead us to believe -- well
beyond the "bickering stage" between the two institutes.
Mission will continue to monitor the process and support the
efforts of the sole U.S. company. END COMMENT.

YOUNG


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