PALESTINIAN PHARMACEUTICAL COMPANIES WANT TO

UNCLAS JERUSALEM 002486

SIPDIS

SENSITIVE
SIPDIS

NEA FOR FRONT OFFICE; NEA/IPA FOR
WILLIAMS/GREENE/WATERS/WAECHTER; NSC FOR
ABRAMS/DORAN/LOGERFO; TREASURY FOR NUGENT/ADKINS; USAID FOR
BORODIN

E.O. 12958: N/A
TAGS: PHUM ECON EAID PGOV KWBG
SUBJECT: PALESTINIAN PHARMACEUTICAL COMPANIES WANT TO
PARTNER WITH DONORS



1. (SBU) Summary: Palestinian pharmaceutical companies
called on donors, in a June 14 briefing, to coordinate with
them on relief efforts and consider procuring
Palestinian-manufactured drugs. They also asked donors to
intervene with Israeli authorities to facilitate the passage
of their products and raw materials across checkpoints. The
drug companies underscored their financial difficulties from
a drop in sales and unpaid bills for supplies provided to the
Palestinian Authority (PA) Ministry of Health (MOH). End
summary.

Drug companies call for coordination,
offer to help humanitarian efforts
--------------


2. (SBU) Members of the Union of Palestinian Pharmaceutical
Manufacturers (UPPM),including Bassim Khoury (Pharmacare),
Iyad Masrouji (Jerusalem Pharmaceuticals),and Talal
Nasiruddin (Birzeit Pharmaceutical),met with donors and NGOs
June 14 to discuss their current challenges and how they can
help the donor community provide humanitarian assistance to
the Palestinians. Nasiruddin called upon donors to
coordinate with the UPPM, the representative body of six drug
companies located in Ramallah (4),Beit Jala (1),and Gaza
(1). He said that with USD 38 million in revenues, the
Palestinian drug companies are well-positioned to assist with
local manufacturing capacity and a far-reaching network
targeting medical staff in the hospitals and clinics in the
West Bank and Gaza. Furthermore, UPPM can help with
monitoring indicators and alerting the international
community to imminent crises in the health sector.

Donors should consider procuring
Palestinian-manufactured drugs
--------------


3. (SBU) Nasiruddin urged donors to consider buying
Palestinian-made drugs, noting that local drug companies
produce 1,070 different high-quality drugs at reasonable
prices. Six companies have ISO 9000 and five have ISO 14000
certifications, while the top four are compliant with Good
Manufacturing Practices (GMP) and have been inspected by
several international groups. Locally manufactured generics
comprise 60 percent of an estimated USD 70 to 90 million drug
market, which has an average annual per capita spending of
USD 23. The PA MOH tenders 20 percent of its annual drug
needs to Palestinian pharmaceutical companies. These drug
needs are based on the MOH essential drug list, of which
Palestinian companies manufacture 156 out of 472 products,
according to Nasiruddin.

Calling on donors to intervene with GOI for
drug distribution and raw material imports
--------------


4. (SBU) Nasiruddin called on the international community to
facilitate the transport of drugs through Israeli
checkpoints. Border closures, especially those at Karni,
have raised transportation costs and made it difficult to
import raw materials, he said. Over the last five years,
these companies have invested USD 40 million in upgrading
equipment and facilities, but have found it increasingly
difficult to get the materials that they need because of the
closures.

Financial difficulties from
depressed sales and unpaid bills
--------------


5. (SBU) Nasiruddin warned that local drug companies are
facing financial difficulties due to unpaid bills by the MOH
and a drop in revenues. Thus far, the MOH owes USD 5 million
to the Palestinian drug manufacturers for purchases made over
the last twelve months. In addition to unpaid bills, the
absence of PA salaries has depressed revenues, Khoury said,
pointing to evidence that drug sales typically spike the week
that salaries are paid. Now, as a result of reduced incomes,
people are spending less on drugs and more in food. This
reduced cash flow has forced one company, Birzeit
Pharmaceutical Co., to apply for a bank loan, for the first
time in its corporate history, in order to sustain its
operations.
STEVENS