ALGERIA: MINISTRY OF HEALTH DEFENDS DRUG IMPORT

C O N F I D E N T I A L ALGIERS 000890

SIPDIS

STATE FOR NEA/MAG
STATE PASS FOR USTR - BURKHEAD
COMMERCE FOR NATE MASON

E.O. 12958: DECL: 10/03/2019
TAGS: EINV ETRD ECON AG
SUBJECT: ALGERIA: MINISTRY OF HEALTH DEFENDS DRUG IMPORT
BAN

REF: ALGIERS 889

Classified By: David D. Pearce, Ambassador. Reason: E.O. 12958 1.4 (b
),(d)


1. (C) Summary: In a meeting with visiting USTR director
Burkhead, Health Ministry Secretary General Chakou defended
Algeria's import ban on a number of pharmaceuticals. He said
it was necessary to protect and develop Algeria's domestic
drug production, and to reduce the rising import costs for
drugs. He also believed it would stimulate domestic and
foreign investment in drug production in Algeria. Burkhead
said the ban was a barrier to international trade that would
further damage Algeria's business climate and impede
Algeria's WTO accession. The Algerian welcomed the proposal
to have a dialogue on IPR protection. End summary


2. (C) USTR Director for European and Middle Eastern Trade
Affairs Paul Burkhead, accompanied by the Ambassador and
Pol/Econ Chief (notetaker),met September 28 with Ministry of
Health Secretary General Abdesselam Chakou. With Chakou were
the head of the Ministry's External Relations and Cooperation
Unit Dr. A.S. Guennar and four other senior aides. Burkhead
asked for the reasons behind Algeria's ban on the import of a
number of pharmaceuticals. Chakou said that the ban had been
issued in October 2008 in response to an order from President
Bouteflika. An epidemic of chronic non-infectious diseases
had supplanted infectious diseases as Algeria's main health
challenge, and these diseases were very expensive to treat.
Algeria wanted to reduce pharmaceutical imports -- which
amounted to USD 1.7 billion in 2008 (NOTE: Per reftel, the
Commerce Minister, in a separate meeting, put the bill at $1
billion. END NOTE) -- and expand domestic production to
achieve ''minimal drug security.'' Chakou maintained that
the import ban would encourage domestic and foreign
investment in drug production, claiming that Pfizer was
planning to produce new drugs in Algeria that it would
introduce beginning in 2010.


3. (C) Burkhead objected that the import restrictions
constituted a barrier to international trade, would impede
Algeria's WTO accession talks, and would undermine companies'
confidence in the business climate. This will make them less
likely to invest. A decision such as this should not be
taken without consulting with affected companies. It could
also lead to shortages. Chakou countered that Algeria had
experienced no shortages; all drugs on the list were already
manufactured in Algeria. A Ministry of Health monitoring
system issued import licenses quickly when it anticipated
gaps in supply. He claimed that Algerian and foreign
companies had requested the ban.


4. (C) Chakou said the GOA was aware of the importance of US
companies, particularly in research and development, and that
it was ready to cooperate with them. Algeria wanted to see
more US companies present in Algeria; the US presence was
comparatively small.


5. (C) Burkhead said that a second issue was that the US
pharmaceutical industry had cited the need for a law to
protect proprietary test data. Chakou said Algeria protected
pharmaceutical intellectual property by permitting the
production of a drug only with a certification from the
National Office of International Property and Copyright that
the drug is not protected. He added, however, that some
large pharmaceutical companies had not protected their
products under existing law. Burkhead noted that IPR
protection was important to both countries and suggested that
it would be good to have an ongoing dialogue on this. The
Algerian welcomed the proposal.


6. (C) The Ambassador concluded by noting that the U.S.
values, and seeks to expand, its trade and investment
relations with Algeria. It is normal for there to be
differences from time to time between sovereign countries;
however, when such differences exist, it is also important to
discuss them. We should be able to discuss ways to meet
Algeria's needs that do not restrict trade and will not
impede its WTO accession.




PEARCE