U.S. Pharmaceutical Company Pulling Out of Jordan Creates

UNCLAS SECTION 01 OF 02 AMMAN 003017 SENSITIVE SIPDIS STATE FOR NEA/ELA, EB/TPP STATE PASS USTR E.O. 12958: N/A TAGS: ECON BTIO KIPR JO SUBJECT: U.S. Pharmaceutical Company Pulling Out of Jordan Creates Anxiety and New Opportunities Ref: 07 Amman 4962 AMMAN 00003017 001.2 OF 002 Sensitive but unclassified. Not for internet distribution. ¶1. (U) Bristol Myers Squibb (BMS) Senior Vice President Frank Pasqualone told EmbOffs October 30 that BMS will be closing its nine-person Jordanian sales operation and BMS drugs will no longer be available for direct sale in Jordan. Pasqualone said this closing is part of a larger corporate strategy to reduce markets, eliminate old products, and focus on new product development. In the Middle East, BMS will also exit Iran, Iraq, Syria, Lebanon, Libya, Yemen, and Sudan, but will maintain operations in Tunisia, Algeria, Egypt, Saudi Arabia, Kuwait, Oman, Bahrain, Qatar, and UAE. Jordanian officials questioned the on-going relationship with the small nations of Bahrain and Qatar and BMS said these companies benefited from the combined Gulf Cooperation Council (GCC) central pharmaceutical registration and the financial importance of the Secretariat of General Health (SGH) tender. ¶2. (U) Pasqualone confirmed that the decision to withdrawn was entirely based on the company's new strategy and improving its financial situation. He added that the decision was not based on the local political situation, the security situation, the ease/difficulty of doing business, nor Jordan's intellectual property rights (IPR) record. ¶3. (SBU) Jordanian businessmen, doctors, and government officials have expressed serious concerns and confusion about BMS's withdrawal. Samir Mansour, Regional Representative for Pharmaceutical Research and Manufacturers of America (PhRMA), expressed fear that BMS's pull-out would prompt other companies to exit and more importantly, harm the quality of healthcare in Jordan. He said he has received innumerable calls from government officials arguing that Jordan's efforts to improve IPR and the attractiveness of the market are wasted if companies pull-out. Jordan Food and Drug Administration (JFDA) officials, seeing Jordan included with Syria, Sudan, and Yemen, initially feared the decision was political and that BMS representatives failed to understand Jordan's political climate and its IPR and pharmaceutical advances. They further expressed particular concern about the availability of cancer drugs, but the chief pharmacist at Jordan's King Hussein Cancer Center, was unaware of the upcoming change and expected that he would continue to have all drugs available to him. ¶4. (U) BMS officials argued that their withdrawal would not significantly impact patients. Pasqualone split their product line into three groups: branded-generic drugs, drugs with therapeutic equivalents, and exclusive innovative drugs. Pasqualone said that BMS' new worldwide strategy offers Jordan access to BMS' most innovative drugs and the market offers alternatives in the other two categories. Exclusive innovative drugs will be made available in non-BMS countries through a U.K.-based company, Idis (www.idispharma.com). Interested physicians and patients can contact Idis directly to order the drugs. Pasqualone acknowledges that obtaining the drugs through Idis would probably be at a higher cost and that such a mechanism is not compliant with GOJ laws and regulations. Note: GOJ mandates that all drugs must be imported and distributed through a Jordan-licensed drug store. Parallel importation or admission of drugs which are not registered with the JFDA is illegal and once BMS pulls-out, its drugs would be de-listed. End note. ¶5. (U) Pasqualone also said that BMS sold the brand equity of its generic drugs in Egypt to GlaskoSmithKline, explaining that generics in the Middle East are still often known by their brand name. He added that they have not yet sought such a deal for Jordan, but would entertain offers from interested parties. However, he pointed out that alternatives to BMS' branded-generic drugs are already available in the Jordanian market. ¶6. (U) Comment: BMS's withdrawal may have a financial benefit for Jordan's own pharmaceutical sector, particularly for the largest of the companies (reftel). Pasqualone acknowledged that pulling out of Jordan would potentially allow Jordanian companies to produce and market otherwise IPR-protected BMS drugs. He understands that the limitations of TRIPS and other agreements in this IPR area could allow for this manufacturing. AMMAN 00003017 002.2 OF 002 Visit Amman's Classified Website at: http://www.state.gov.sgov.gov/p/nea/amman/ Minimize considered. Beecroft