07BANGKOK598 RTG OPEN TO DISCUSSIONS WITH PHARMA

VZCZCXRO3066

RR RUEHCHI RUEHDT RUEHHM RUEHNH

DE RUEHBK # 0598 0302341

ZNR UUUUU ZZH

R 302341Z JAN 07

FM AMEMBASSY BANGKOK

TO RUEHC/SECSTATE WASHDC 4440

RUCNASE/ASEAN MEMBER COLLECTIVE

RUEHGV/USMISSION GENEVA 1771

RUCPDOC/USDOC WASHDC

RUEAUSA/DEPT OF HHS WASHINGTON DC

UNCLAS BANGKOK 000598

SIPDIS

SENSITIVE

SIPDIS

STATE PASS USTR FOR B. WEISEL, C. WILSON

STATE PASS USPTO

HHS/OHGA FOR AMAR BHAT, ERIKA ELVANDER

USDOC FOR JKELLY

E.O. 12958:N/A

TAGS: ECON ETRD KIPR TH

SUBJECT: RTG OPEN TO DISCUSSIONS WITH PHARMA “AFTER CL’S ARE

ISSUED”

¶1. On January 29, Minister of Public Health Mongkol na Songhkla

issued a statement officially announcing compulsory licenses (CL) on

Abbott Labs’ HIV medicine Kaletra, and the heart medication Plavix,

distributed by Sanofi-Aventis. The official notification for

Kaletra was signed on January 24, and for Plavix the following day.

According to the statement, the CL on Kaletra will be effective for

five years, but for Plavix will have no expiration date.

¶2. Mongkol’s statement offered an opening of sorts to

pharmaceutical firms, saying that the government would ask for

voluntary price reductions from the firms before exercising

compulsory licenses. He added less than magnanimously that, “if we

can buy the original drug at a price not higher than that available

in other places, we are willing to buy it.” In other words, any

pharmaceutical firm that markets a patented life-saving drug at a

higher price than available generics faces the prospect of a

compulsory license.

¶3. In a phone conversation with Econoff, Dr. Suwit Wibulpolprasert,

the Senior Advisor on Health Economics to the Minister of Public

Health and a driving force behind the CLs, claimed that the Ministry

was open to meeting with pharmaceutical firms to discuss pricing,

but only after the CL was issued. Suwit said that the Ministry had

opted against negotiating beforehand with patent holders, having had

no luck in previous discussions. He insisted that negotiations

would only have delayed the process and would not have resulted in

lower prices, and noted that WTO rules did not require prior

negotiations when used for public non-commercial use. Suwit said

despite pharmaceutical companies protests to the contrary there were

3-4 cases of prior discussions they could publicize, but chose not

to so that “the companies wouldn’t lose face.”

¶4. Pharmaceutical firms are up in arms over the newest declaration

and are mulling their options, including pursuing litigation.

Lawyers for the local pharmaceutical association (and attorneys of

record for many of the local firms) say they plan to file an appeal

to the Board of Patents on the CL on Merck’s drug efavirenz. Thai

law offers the opportunity to appeal a CL decision within 60 days of

receiving notice of the decision. Although there was no official

government decree, Merck received notification on December 12, and

thus plan to file their appeal by February 9 to meet the deadline.

Any further litigation on this and other products may have to wait

until actual deliveries of generic versions of the drug are made in

Thailand.

¶5. The Swiss Ambassador brought up the CL issue on January 29 with

Minister of Commerce Krirk-krai Jirapaet, but the Minister simply

referred the matter to the Ministry of Public Health. Merck had

earlier reported that the Minister had pledged in a meeting with

them that no more compulsory licenses would be issued, but with the

Swiss he offered no more assurances other than that Thailand would

respect its international commitments.

Comment

——-

¶6. The Ministry of Public Health remains determined to forge ahead

with its CL plans, and feels that it is in a strong negotiating

position. To date, no RTG ministries seem to be either willing or

able to intervene in the CL process. Our impression is that, in

terms of group dynamics, the CL process is one “aye” (the MoPH) in a

room full of no-comments (the other ministries). Local media

coverage has been minimal and, aside from coverage of PReMA’s press