EU/SWISS POSITIONS ON SAUDI PHRMA PRICING ISSUES

UNCLAS RIYADH 000666

SIPDIS

SENSITIVE
SIPDIS

USTR FOR JASON BUNTIN
USDOC FOR TYLER HOFFMAN

E.O. 12958: N/A
TAGS: ETRD EINV USTR SA EU SZ
SUBJECT: EU/SWISS POSITIONS ON SAUDI PHRMA PRICING ISSUES

REF: SECSTATE 38022


1. (SBU) Summary. Econoffs delivered reftel points to
Swiss and European Union (EU) officials on April 19. The
Swiss Ambassador believes he needs further instructions from
the Federal Department of Foreign Affairs in Bern to take
additional measures to advocate for the pharmaceutical
industry. The pharmaceutical industry has not contacted the
Federal Department of Foreign Affairs in Bern to request
intervention and must do so if they desire him to take action
in Riyadh. The EU will forward USTR's non-paper to Brussels
to receive instructions. End Summary.


2. (SBU) Econoffs met with the Swiss Ambassador and Deputy
Chief of Mission on April 19. The Ambassador shared that he
met with Saudi Ministry of Health (MOH) officials twice in
2007 to request that they consult with industry regarding its
new pharmaceutical pricing mechanism. He expressed
satisfaction that implementation of the pricing scheme was
delayed four months. He believes this delay resulted from
him (along with the Ambassadors of Belgium and the European
Union) meeting with the Minister of Health last fall.
Despite this success, he believes that the MOH, unfamiliar
with the World Trade Organization (WTO),does not understand
that concept of meaningful consultation with industry and
that its actions do not comply with Saudi Arabia's WTO
obligations. The Ambassador further explained that while
local representatives of Swiss pharmaceutical companies
(Roche and Janssen-Cilag) have solicited his assistance, the
headquarters of Swiss pharmaceutical firms have failed to
contact the Federal Department of Foreign Affairs in Bern.
He conveyed his frank assessment that the Swiss firms'
failure to contact the federal government seemed to indicate
the pricing issue is not yet a high priority for them. Given
this failure, he will remain passive until he is instructed
to act by the Federal Department of Foreign Affairs. The
Ambassador encouraged American pharmaceutical companies to
work with Swiss pharmaceutical companies to request
intervention of the Federal Department of Foreign Affairs in
Bern. Further, the Ambassador agreed with Econoffs that the
recent appointment of Minister of Commerce and Industry
Alireza, one of Saudi Arabia's lead WTO accession
negotiators, could offer a promising avenue to pursue our
mutual concerns. However, he again felt obliged to wait for
instructions from Bern before approaching the Minister of
Commerce and Industry.


3. (SBU) Econoff met with the First Secretary working on
economic issues for the EU on April 19. The EU will forward
USTR's non-paper to Brussels to receive instructions. The
official shared that the EU Ambassador felt that he had
exhausted his means of engaging the MOH on these issues in
Riyadh and suggested consideration of raising these issues in
the WTO. She explained that the EU had quickly resolved a
beef trade issue merely by placing the matter on a committee
agenda at the WTO.
FRAKER