MGLE01: JOINT AMBASSADORIAL-PHARMACEUTICAL

C O N F I D E N T I A L SECTION 01 OF 02 BEIRUT 001392

SIPDIS

SIPDIS

STATE PASS USTR
NSC FOR ABRAMS/DORAN/WERNER/SINGH

E.O. 12958: DECL: 05/03/2016
TAGS: ECON EINV EFIN KIPR LE
SUBJECT: MGLE01: JOINT AMBASSADORIAL-PHARMACEUTICAL
INDUSTRY DELEGATION DISCUSSES IPR WITH PM SINIORA


Classified By: Ambassador Jeffrey Feltman for Reasons 1.4 (b) and (d).


1. (C) Summary. The Ambassador, French Ambassador Emie,
and European Commission Head of Delegation Renauld, together
with a delegation that included members of the pharmaceutical
industry, discussed the problems of the intellectual property
rights (IPR) climate concerning pharmaceuticals in Lebanon
with Prime Minister Siniora, Health Minister Khalifeh, and
Economy and Trade Minister Haddad. The Ambassador and
Ambassador Emie emphasized the need to implement existing
legislation on drug registration and amend legislation
concerning data protection and patent protection in order to
improve the existing IPR climate in the pharmaceutical
industry. EU Representative Renauld reminded the GOL of its
bilateral commitments to the EU. Health Minister Khalifeh
stressed to the delegation that his ministry respects IPR and
insisted that the GOL is trying to uphold international
standards, although he had concerns about the ethics of many
pharmaceutical firms. Industry representatives stressed how
the current IPR climate inhibits further investments and
stifles innovation and defended their ethics in the Lebanese
market. PM Siniora concluded the meeting by offering a
proposal for a joint task force between industry and the
Ministries of Health and Economy and Trade to improve the
regulatory environment for pharmaceutical companies. End
Summary.


2. (C) The Ambassador introduced the members of the
delegation and began the delegation's presentation by
stressing how the strength of the delegation reflected its
commitment to working with the GOL and its concern with the
current IPR regime in Lebanon. He emphasized that the status
quo does not serve Lebanon well and needs to change. He
stressed that the time has come for the implementation of the
July 2003 law 530 and action on data protection. He reminded
PM Siniora that the weak enforcement of IPR prevents
businesses from investing in new technologies and could
significantly slow other economic reforms.


3. (C) French Ambassador Emie followed with a presentation
underlining the importance of the economic impact of
pharmaceutical companies in Lebanon. He reminded PM Siniora
that research-based pharmaceutical companies in Lebanon
employ 2000 highly qualified people directly and an
additional 2000 people indirectly. He stated that France
exports USD 130 million worth of pharmaceuticals, and the
French pharmaceutical industry has a 20 percent market share
in the Lebanese market. Emie offered three specific GOL
actions to improve the IPR climate among pharmaceuticals:
(1) amending the current data protection law to ensure that
new provisions will be implemented transparently; (2)
accepting the sending to new laboratories and embassies the
draft of new legislation in order to give industry and
embassies the opportunity to offer comments or suggestions;
and (3) increasing technical cooperation between Lebanese
registration committees and other foreign committees. Emie
also emphasized the need for the GOL to show progress on IPR
issues in order to move forward on further WTO accession
talks.


4. (C) EU Representative Renauld reminded the GOL officials
that it was important for Lebanon to apply the rules of the
EU-Lebanon Association Agreement that entered into force on
April 1, including Article 38 of the agreement which mentions
the need for the protection of IPR.


5. (C) After listening to the presentations of the
Ambassador, Ambassador Emie, and head of Delegation Renauld,
PM Siniora welcomed the members of the delegation and
confirmed his intention to establish the rule of law to
encourage more investment in Lebanon. He asked for patience
with the GOL, as the current political environment has made
implementing new economic reforms more difficult. He told
the group that "the bigger the ship, the longer it takes to
change directions," when referring to the challenge of
offering the right incentives to create a proper business
environment in order to provide jobs for Lebanon's highly
educated population.


6. (C) Health Minister Khalifeh confirmed that IPR issues
are important to the GOL and his ministry. He stated that 95
percent of Ministry of Health medical purchases do not go
towards copycat drugs. He insisted that there are many
countries that do not always have the best data protection
laws with regards to pharmaceuticals, including Canada. He

BEIRUT 00001392 002 OF 002


said that the pharmaceutical firms in Israel, Egypt, and
India had suffered far more economic damage than firms in
Lebanon. He told the delegation that he was serious about
quality control of drugs and that the Ministry of Health had
studies several ways to improve procedures and legislation
regarding pharmaceuticals. He told the industry
representatives that many pharmaceutical companies do not
behave ethically in their marketing of products, as he
questioned the need of pharmaceutical firms to offer cruises
to doctors who prescribe their drugs.


7. (C) Pharmaceutical industry representatives emphasized
that the lack of data protection for their products was
serving as a significant impediment towards future investment
in the Lebanese market. They stressed to GOL officials that
Lebanon needed the quick implementation of law 530 to enable
Lebanese patients to have better access to innovative and
quality pharmaceutical products. They responded to Minister
Khalifeh's concerns about ethics by stressing the existence
of the Code of Pharmaceutical Promotional Practices for the
Middle East. The industry representatives stressed their
view that Lebanese regulatory authorities should recognize
both the non-disclosure of data submitted by pharmaceutical
companies and the non-reliance of such data from generic
producers and importers for a minimum period of time.
Industry representatives also offered technical assistance to
help the Ministry of Health and the Ministry of Economy and
Trade with IPR issues.


8. (C) Ghassan Hamadeh, an advisor to Minister Khalifeh,
told the gathering that the Ministry of Health was working
diligently on an action plan to improve the IPR climate with
regards to the pharmaceutical industry, although results were
slower than desired. He said that a secret task force of
industry and GOL representatives had been reviewing law 530.
He stated that the problem of copycat registration of drugs
should improve with GOL commitments to the EFTA Agreement it
signed. He also stressed the need for an ethical code of
conduct for local producers and distributors in Lebanon.


9. (C) PM Siniora concluded the meeting by offering his
blessing for a working task force composed of members from
the Ministries of Health and Economy and Trade and industry
to resolve the IPR problems facing the pharmaceutical
industry. He also confirmed his desire to provide the proper
investment environment for the pharmaceutical industry,
saying that one of the dreams of the late PM Rafiq Hariri was
to have a thriving pharmaceutical industry in Lebanon.


10. (U) Immediately following the meeting, Ambassador Emie
delivered a press statement in the presence of the Ambassador
and EU head of Delegation Renauld that highlighted the issues
discussed with PM Siniora. The release stressed the need for
better patent protection and data protection for
pharmaceutical firms in Lebanon, the effective implementation
of law 530 concerning pharmaceutical registration, and the
need to stop parallel imports.


11. (SBU) As follow-up, the three COMs are conveying a
letter to PM Siniora, with copies to his ministers,
expressing appreciation for the meeting but asking for
immediate action on some specific issues raised.
FELTMAN