BURMA: DONORS PREPARING TO PURCHASE TB DRUGS IN

C O N F I D E N T I A L SECTION 01 OF 04 RANGOON 000200

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, INR/EAP, S/GAC, OES, G
DEPT PLEASE PASS TO DEPT OF HEALTH AND HUMAN SERVICES
DEPT PLEASE PASS TO USAID/AME
PACOM FOR FPA
BANGKOK FOR USAID/RDMA HEALTH OFFICE, REO

E.O. 12958: DECL: 02/19/2019
TAGS: SOCI EAID PHUM KHIV PGOV SENV BM
SUBJECT: BURMA: DONORS PREPARING TO PURCHASE TB DRUGS IN
2010

REF: A) 08 RANGOON 279Q B) 08 RANGOON 920 C) 08 STATE
131962

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Classified By: Economic Officer Samantha A. Carl-Yoder for Reasons 1.4
(b and d).

Summary
--------------


1. (C) Burma will face a shortage of tuberculosis (TB)
drugs in mid-2010, leaving the region vulnerable to new
outbreaks of both TB and multi-drug resistant TB. WHO
estimates that Burma needs between USD 4-5 million to cover
the drug shortfall; and to ensure timely delivery of drugs,
procurement must occur by the end of 2009. While the MOH in
December 2008 highlighted the drug shortfall and requested
donor assistance in covering this gap, donors have yet to
make firm commitments. The Government of Japan and the UK's
DFID appear willing to procure drugs, but have yet to
allocate funds. Time is running out and delays in budget
approvals may create an immediate funding shortfall.
USAID/RDMA has identified up to USD 1.7 million to help cover
the gap, but wants to be the "donor of last resort." The
Ministry of Health will host another donor's meting on April
24 to ascertain who, if anyone, will cover the drug
shortfall. End Summary.

No Drugs by Mid-2010
--------------


2. (SBU) Burma is one of 22 tuberculosis (TB) high-burden
countries in the world, according to the WHO. While the true
prevalence of TB is unknown, the WHO estimates that up to 40
percent of Burma's population may be infected with TB.
Through its National TB Program (NTP),which has offices in
all 324 townships, the GOB successfully treats TB cases by
providing free drugs to patients. NTP, which is woefully
underfunded and spends only USD 70,000 a year on drugs, is
able to treat patients because the Geneva-based Global Drug
Facility (GDF) has provided TB drugs (worth approximately USD
3.5 million) annually since 2003. In 2008, the WHO informed
donors that GDF assistance, which has a maximum duration of
six years, would end by the end of the year, leaving Burma
without any TB medications thereafter (Ref A).


3. (SBU) During a December 2008 Donor's Conference, the GDF
agreed to extend partial funding for an additional
"exception" year, pledging USD 2.5 million for 2009 (Ref B).
WHO and NTP found additional funding to cover the remaining
USD 1 million balance, WHO TB Officer Dr. Hans Kluge told us.
However, even with the additional funding, the NTP will run
out of TB drugs by mid-2010, leaving patients without
treatment. With patients unable to finish their TB regimen,
Burma runs the risk of developing high levels of multi-drug
resistant (MDR) TB, which could quickly spread to neighboring
countries, Kluge explained. The NTP, assuming that the
Ministry of Health's (MOH) Round 9 Global Fund application
will be approved, expects that Burma will receive TB drugs
through Global Fund; however, due to funding streams and
procurement processes, the earliest those drugs could arrive
in Burma is mid-2011, leaving a one-year gap. WHO estimates

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that Burma needs between USD 4-5 million to cover the gap, to
pay for eight basic TB drugs, as well as pediatric medicines.


Japanese and British (Maybe) Opening their Pockets
-------------- --------------


4. (C) While MOH, WHO, and donors recognize the severity of
the situation, little has been done to locate funds to cover
the 2010-2011 TB drug shortfall. The December donor's
meeting yielded few tangible results. Many donors are
considering procuring TB medicines for NTP, but no one is
ready yet to commit. During March 25-30 meetings with donor
representatives from AusAID, the UK's DFID, the Three Disease
Fund (3DF),the Japanese Embassy, and JICA, as well as NGO
partner Population Services International (PSI),all
representatives agreed that securing access to first-line TB
drugs should be the country's top priority. PSI Country
Director John Hetherington told us that "if there are no TB
drugs, then there is no point in having a TB program."
Despite acknowledging the problem, donors have different
perspectives on obligating funds for TB medicines:

-- Japanese Embassy Economic Counselor Matsui Suzuka told us
that the Japanese Government would consider providing TB drug
funding on a one-time basis, but needs reassurance that the
USG would not hold up the MOH's Global Fund Round 9
application. After reiterating the USG's position on Global
Fund and emphasizing that the MOH's proposal must be
technically sound, including to address the problems that led
to the 2005 GF withdrawal (Ref C),Suzuka commented that he
would discuss with the Japanese Ministry of Foreign Affairs
about moving forward with a funding proposal. Suzuka
initially believed that the MOH would not need funding until
FY10 (beginning April 1, 2010). We quickly explained the
drug procurement process meant that money must be available
by October/November 2009. This requires the Government of
Japan to advance its funding plans by one year, which Suzuka
thought could be "doable."

-- DFID Health Officer Julia Kemp explained that DFID,
working with AusAID and other 3DF donors, is looking for ways
to procure drugs for NTP. Kemp stated that the British
Government will announce on April 3 a dramatic increase in
humanitarian funding for Burma, some of which will be used to
fund the 3DF. Kemp hinted that the 3DF allotment would be
enough to cover the 2010-2011 gap, but that the 3DF Board
would need to determine how the money is spent. She
emphasized that providing TB drugs is a high priority for the
3DF Board. However, if the 3DF Board agrees to procure
drugs, there might be a delay in funding, resulting in a
smaller, more immediate funding gap.

-- AusAID representative Bernie Pearce acknowledged that the
3DF Board is looking at the situation, but told us that the
Fund Board has not yet made a decision on whether to
reprogram funds. He did not indicate if there would be new
Australian funding into the 3DF.

-- 3DF Fund Manager Mikko Lainejoki commented that if other
donors are willing to provide partial funding, he believes

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3DF members would do the same. He was not aware of, or did
not let on about, DFID's plans to increase new funding to the
3DF.

-- JICA Country Representative Miyamoto Hideo explained that
while TB is a high priority disease, JICA also has other
(unnamed) programs that it wants to fund. He denied rumors
that JICA would provide the MOH with USD 400,000 for TB drugs.


5. (C) According to NTP Acting Manager Dr. Myo Zaw, the
Burmese Government has increased funding for TB drugs and
will continue to do so. As part of its agreement with the
GDF for the additional year of funding, the MOH agreed to
match three percent of the GDF's budget in 2009 and five
percent in 2010, putting the money toward the procurement of
medicines. Dr Myo Zaw stated that the MOH will contribute
USD 70,000 and USD 112,500 in FY09 and FY10, respectively.
(Note: due to the world financial crisis, the GDF has only
provided USD 2 million of its USD 2.5 million commitment to
the MOH. MOH pledges are based on the GDF's actual
remittances. End Note). Dr. Myo Zaw acknowledged it is
unlikely the GOB will provide the Ministry of Health with
additional funds for drug procurement. WHO's Dr. Kluge
commented that the MOH already submitted a request to the
Government of Japan for USD 3 million, and will ask the WHO
Southeast Asia Regional Office for an additional USD 1
million.


6. (C) In case other donors cannot find new funding to fill
the TB drug gap, the USAID/RDMA's Office of Public Health has
identified potential CSH funds, perhaps as much as USD 1.7
million, that it can reprogram to help offset a shortfall.
During our meetings, donors inquired about the USG's plans
with regard to TB drugs, stating that in the past, the USG
has been reluctant to provide drugs to the MOH. We noted our
concern about the situation and explained that while the USG
may be willing to provide funding, it would take time for any
approvals. We emphasized that the USG should be the "donor
of last resort," as we would have to temporarily suspend the
existing TB program to free up monies.


7. (SBU) The Ministry of Health plans to hold a meeting
with donors on April 24 in Rangoon to hear perspectives on
possible TB drug funding. The WHO will circulate a funding
proposal to donors by mid-April, which will explain in detail
the current and future funding situation.

Comment
--------------


8. (C) During the past five years, the NTP has dramatically
improved Burma's TB treatment program, thanks in large part
to GDF funding. Without first-line TB drugs, Burma will have
no viable TB program. The disease, including strains of MDR
TB, will likely become more widespread throughout Burma and
perhaps continue to spread into neighboring countries. That
would be a disaster. The spread of MDR-TB would be contrary
to the USG's interests worldwide. While we are reasonably
confident that other donors -- the Government of Japan and
DFID through the 3DF -- will find funding to cover the
majority of the TB drug gap, there still may be a small

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funding shortfall in late 2009/early 2010 as donors try to
make funds available. Thus, USAID/RDMA has identified funds
from existing TB programs in Burma and the region "just in
case" we need to step in to fund, at least partially, TB
drugs. We are reluctant to suspend, even for a year, our TB
programs which focus on improving drug delivery systems, but
we recognize the urgency of the situation. We will meet with
the Japanese Embassy and DFID prior to the April 24 donor's
meeting to ascertain their plans.

DINGER