HEALTH MINISTER POSTPONES U.S. TRIP, DEFENDS CL'S

UNCLAS SECTION 01 OF 02 BANGKOK 002282

SIPDIS

SENSITIVE

SIPDIS

STATE PASS USTR FOR B. WEISEL, C. WILSON
STATE PASS USPTO
HHS/OHGA FOR AMAR BHAT
USDOC FOR JKELLY

E.O. 12958:N/A
TAGS: ECON ETRD KIPR TBIO TH
SUBJECT: HEALTH MINISTER POSTPONES U.S. TRIP, DEFENDS CL'S


1. Summary: Thailand's Minister of Public Health postponed his
planned trip to the U.S. this week, citing medical reasons.
Although he will no longer have the opportunity to explain his
Ministry's actions on compulsory licenses before the USG Special 301
decision is issued, he remains enthusiastic about defending his
policies in Washington. In a meeting with the Ambassador, the
Minister stepped back from his previous confrontational approach
with the pharmaceutical industry, insisting that compulsory licenses
had not technically been implemented and that his Ministry was
willing to continue negotiations with individual companies. End
Summary.


2. In a meeting scheduled to discuss the Minister's anticipated
trip to the U.S., Minister of Public Health Mongkol na Songkhla
informed Ambassador that he was forced to postpone the visit due to
medical reasons. Mongkol explained that the previous Friday he had
been diagnosed with a blocked artery and doctors had advised him
against air travel. He suggested postponing the trip to May 21-22.
The new dates would leave the Minister unable to explain his policy
on issuing compulsory licenses (CL) on pharmaceutical products
before the USG issues a determination of Thailand's protection of
intellectual property rights as part of the annual Special 301
process, the ostensible reason behind the visit. Nevertheless, the
Minister remained interested in visiting the U.S. to explain and
defend the Ministry's decisions.


3. The Ambassador recommended a later meeting to discuss a
rescheduled visit, but took the opportunity to press the USG
position on CLs. The Ambassador explained that the USG did not
contest the RTG's right to issue a compulsory license in a manner
consistent with WTO rules, but advised consultation with companies
to the extent possible prior to issuing any future CLs. He
continued that investors were changing their perception of the
investment climate in Thailand; the RTG had recently undertaken
controversial decisions such as changes to the Foreign Business Act
and the CLs, and with limited information investors were concluding
that Thailand was becoming less friendly to foreign institutions.
The Ambassador stressed that an appropriate balance needed to be
struck between providing pharmaceutical companies a return on their
investment to encourage continued innovation, and the need to
provide access to essential drugs. Mongkol said his Ministry had
laid out the facts on the issue in an 80-page white paper and was
confident that anyone with a clear understanding of the facts would
support the Ministry's actions.


4. The Ambassador referred to an earlier conversation with PM
Surayud wherein the Prime Minister pledged that there would be no
future compulsory licenses. Dr. Suwit Wibulpolprasert, health
advisor to the Minister, said that there had been a misunderstanding
regarding the Ministry's actions. Suwit claimed the Ministry had
only announced the intention to issue a compulsory license, and
should not be confused with the actual implementation of the
license. The Ministry had deliberately left time for negotiation
with companies before bringing in generic versions of the drugs in
question. Although limited stocks of the antiretroviral efavirenz
had forced the Ministry to move quickly on a compulsory license for
that drug (and Suwit conceded that license was a done deal),they
had ample stocks of the other two targets of compulsory licenses and
were willing to continue negotiations before actually implementing
the licenses. (Note: Suwit's claims do not jibe with earlier RTG
statements on CLs. Others involved in the decision insisted at the
time that they had issued the licenses and did not foresee further
negotiations.)


5. In a brief press interview after the meeting, Mongkol responded
to a question on the USG's Special 301 review and said that he was
not concerned about an adverse decision for Thailand. He considered
the U.S. a nation of laws and since the RTG had closely followed the
law on issuing the CLs it should not affect the review. The
Ambassador told the press that the Special 301 review was
continuing, and while the USG would consider the compulsory license
issue, the decision would not be made on that issue alone. He
continued that the USG position was to encourage negotiations with
companies to strike a balance between encouraging innovation and
providing access to essential medicines.

Rescheduling the trip
--------------


6. The Minister suggested that his trip to the U.S. be rescheduled
for May 21-22. He explained that he planned to travel to Geneva for
WHO Assembly meetings from May 14-18 and would like to continue on
to Washington for meetings the following week. He hoped to be able
to meet with HHS Secretary Leavitt during the Geneva meetings if the

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Secretary plans to attend.

SIPDIS


7. In an aside after the meeting, Dr. Suwit relayed that Abbott had
proposed a new price for their antiretroviral Kaletra of USD 1000
per year, approximately half the previous price offered in Thailand.
However, an Indian generic manufacturer had already countered the
offer and had proposed a price of USD 850, undercutting Abbott's new
offer.


8. Comment: Minister Mongkol seemed to be stepping back from his
earlier confrontational approach, taking pains to clarify that the
Ministry had not technically issued compulsory licenses and
negotiations with pharmaceutical companies would continue. However,
he has not lost any of his ardor for CLs. He continued to defend
the Ministry's decisions and believed that an honest examination of
the facts of the case will persuade USG policymakers of the
correctness of his acts. End Comment.