SPECIAL 301: SLOVAKIA PROCURES NEW STORAGE FACILITY

UNCLAS BRATISLAVA 000199

SIPDIS

SIPDIS

DEPARTMENT FOR EUR/NCE AND EB/IPE:CLACROSSE
DEPT PLEASE PASS TO USTR JCHOE-GROVES AND LERRION
USDOC FOR JBOGER AND MROGERS
USDOC PLEASE PASS TO USPTO JURBAN AND LOC STEPP

E.O. 12958: N/A
TAGS: KIPR ETRD ECON LO
SUBJECT: SPECIAL 301: SLOVAKIA PROCURES NEW STORAGE FACILITY

REF: A) BRATISLAVA 143 B) December 15, 2005 DVC between USG

and GOS representatives.


1. Summary - The Ministry of Health (MOH) has found a secure
building for the storage of proprietary drug application
data on a military base. Econ officers visited the facility
on March 8 and were fully satisfied that once it is
renovated according to MOH's plans the building will serve
as a secure and functional structure for the storage of
sensitive pharmaceutical data. Together with the recent
successful efforts to enhance linkage regulations to better
protect patent holders, this development gives us confidence
that Slovakia is committed to fully resolving our
outstanding 301 concerns. We strongly recommend removing
Slovakia from the 2006 Watch List, believing that failure to
do so would be counterproductive and could harm future
efforts to work with the Ministries of Health and Economy in
areas of mutual concern. End summary.

NEW STORAGE FACILITY
--------------


2. As outlined in reftel A, the MOH received three bids for
a public tender for a secure storage facility and had
planned to select a winning bid by the end of February.
Before this process was complete, however, Minister of
Health Rudolf Zajac notified the Embassy that his ministry
had identified a vacant government building that fit the
criteria and could be procured more quickly and at a
fraction of the cost of a private facility. The building
belongs to the Ministry of Defense and is located on a
military base in Malacky, about 45 minutes north of
Bratislava. It is a former mess hall and officers club that
has not been used for several years. The Ministry of
Defense has agreed to transfer this building to the MOH.


3. Econoffs visited the facility on March 8 with officials
from the Drug Control Authority (SUKL),who together with
the MOH will be responsible for the renovation and transfer
of documents to the Malacky facility. The 20 year-old two-
story building is in good condition and will provide
sufficient space (approximately 13,750 square feet) to house
the sensitive drug company files. The SUKL officials
brought detailed architectural designs and used the visit to
provide an overview of their renovation plans. SUKL plans
to tear down the interior walls to make one large warehouse-
like room on each level, redo the floors, and install an
elevator. They will also install security and fire alarm
systems, and reduce the number of exterior entrances to the
building. Security will also be enhanced by the fact that
the building is located on an active military base and will
have round-the-clock military security. SUKL estimates that
the total cost of reconstruction will be approximately USD
500,000. As outlined in Ref. A, the MOH has already
allocated funds to SUKL for this project.


4. SUKL requested the Embassy's informal approval of the
facilities before finalizing arrangements for the transfer
of title from the Ministry of Defense and moving ahead with
reconstruction. (Note: Ambassador sent a letter to Minister
of Health Zajac on March 9 noting our satisfaction with the
facilities and encouraging the minister to move as quickly
as possible to finalize arrangements and begin
construction.) By their own estimates, SUKL will need two
to four weeks to transfer the title and get the necessary
building permits. After selecting a contractor,
construction is expected to take two months. SUKL plans to
finish the renovations and move the proprietary data to the
Malacky facility by July or August, 2006.

LINKAGE LEGISLATION SENT TO PARLIAMENT
--------------


5. The draft amendment to the Medicines Act was approved by
the cabinet without changes on February 15 and is the second
item that will be taken up by the Parliament when the new
session opens on March 15. The legislation obligates SUKL
to notify the patent holder when it receives a request for
marketing approval from a generic company, and to coordinate
with the Patent Office if there is any question as to the
status of the patent. As outlined in Ref A, as an interim
measure the MOH issued a decree in January requiring SUKL to
abide by the provisions of the draft amendment until it
becomes law. A translated version of the draft amendment
and the MOH decree will be sent by email to Washington
officials.


6. Comment - After our visit to Malacky and briefing by SUKL
officials, we are fully satisfied that once the building is
renovated it will meet all of the criteria for a secure
storage facility for proprietary drug application data.
Although the new facilities will not be ready by March 31,
as promised by SUKL officials at the Ref B. digital video
conference (DVC),the Health Minister and other GOS
officials have taken major steps towards this goal and have
given every indication that they are committed to completing
the process as soon as possible. Even the Director of SUKL,
Milan Rybar, who has been a reluctant participant from the
beginning of our discussions with the GOS, now seems
enthusiastic about the project and even requested our help
in encouraging the MOH to act quickly to obtain the
necessary permits so that they can begin work on the
building.


7. Comment continued - GOS officials have acted in good
faith to meet the commitments that they made at the December
15, 2005 DVC to address the outstanding IPR concerns that
have kept them on the Watch List for the last five years.
Although some work implementing these strong commitments
remains to be done, we strongly recommend acknowledging
their efforts by removing Slovakia from the 2006 Watch List.
Leaving Slovakia on the list would be counterproductive,
souring the strong working relationship that we have built
with the ministries of health and economy and making further
cooperation to improve the business environment more
difficult. End Comment.

VALLEE