SLOVENIA: COM PRESSES HEALTHMIN FOR TRANSPARENCY

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 �00A;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 NNNN