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Cablegate: Good Vibes at Iraqi Moh Briefing for Big Phrma

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 AMMAN 007579

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ETRD EINV JO IZ
SUBJECT: GOOD VIBES AT IRAQI MOH BRIEFING FOR BIG PHRMA

1. (SBU) SUMMARY: The Iraqi Ministry of Health (IMoH) will
take over the importation of pharmaceuticals from the World
Health Organization (WHO) by the end of November, and the
IMoH drug formulary will be complete by early December. IMoH
welcomes advice from PhRMA on the restructuring of Kimadia
and the training of IMoH employees, and would like to see a
PhRMA delegation visit Baghdad. IMoH also plans to request,
through Ambassador Bremer, a USD 500 million donation from
PhRMA of drugs for 2004. END SUMMARY.

2. (U) At a November 12 meeting with Middle East regional
representatives of major international pharmaceutical
exporters hosted by the Amman regional PhRMA office, Senior
CPA Advisor to the IMoH James Haveman and CPA procurement
advisor Scott Svabek briefed representatives on ongoing
developments in the IMoH. IMoH is moving ahead on several
fronts to make itself ready for a transition to independence.

---------
Formulary
---------

3. (U) The formulary that will be used by the IMoH to
determine drug purchases, which is being prepared by a
military team on TDY assignment from the United States,
should be ready by early December, at which time it will be
released publicly and be made available on the IMoH website.
IMoH plans to re-register all pharmaceutical products so that
products previously excluded from the Iraqi market for
spurious reasons, such as sourcing from the United States or
dealings with Israel by the parent company, will be given an
opportunity for registry on the same footing as products
available during Saddam,s regime.

----------------
Donation Request
----------------

4. (SBU) Haveman reiterated to the PhRMA member
representatives that there will not be enough money in the
2004 IMoH budget to purchase PhRMA-branded drugs in large
quantities. The IMoH will receive a budget of USD 578
million in 2004. While it will also receive USD 800 million
from the USD 20 billion budget supplemental going to Iraq
reconstruction, it is all allocated to the building and
reconstruction of hospitals and the purchase of medical
equipment, not pharmaceutical purchases. For this reason,
Ambassador Bremer will draft a letter, projected to be ready
by mid-December, asking for USD 500 million in PhRMA
contributions to the IMoH.

--------
Training
--------

5. (SBU) Haveman also asked for PhRMA help with IMoH in other
areas. He explained the substantial lack of knowledge by
Iraqi physicians of medical products developed within the
last 15 years and requested that PhRMA to give
recommendations to the IMoH on what training Iraqi physicians
need in order to be able to use PhRMA drugs. IMoH also plans
to participate in a program organized by NGO Partners in
Health Care, which will send IMoH employees to Jordan and to
the United States for training, and PhRMA members may be
asked to assist in supporting some of the training in that
program.

-------
Kimadia
-------

6. (SBU) PhRMA will also be asked to advise in the
restructuring of Iraq,s state-owned pharmaceutical
distribution company Kimadia. Minister of Health Dr. Abbadi
wants to end the direct relationship between Kimadia and
hospitals by December, and while CPA believes that target may
not be achievable, the long-term vision is for Kimadia to
either fade out of existence or to continue as a private
pharmaceutical distributor, separate from the IMoH drug
acquisition bureau. Haveman requested that PhRMA designate a
representative to present a working paper outlining PhRMA,s
vision for what Kimadia should be, which he would like to see
by some time in December.

--------------------
Post-OFF Procurement
--------------------

7. (SBU) Svabek reviewed the status of several outstanding
tenders of interest to PhRMA-member corporations and outlined
the contracting, importation, and payment processes that will
be followed by the IMoH following the end of Oil-For-Food and
the assumption of responsibility for pharmaceutical
importation by the IMoH from the World Health Organization.
Tenders for pharmaceuticals needed by the IMoH will be posted
on the Iraq Business Center website, and will be labeled as
one of three tiers. Tenders falling under Tier 1 will only
be available to innovating multinational corporations, most
of whom are PhRMA members. Tier 2 tenders will be biddable
by producers of EU or USFDA-certified generics as well as
corporations qualifying for Tier 1, while Tier 3 tenders will
be open to all. Svabek said that he is working to resolve
the current delays in the awarding of tenders, which he said
were primarily due to the tendency of the current IMoH tender
review board to haggle with individual bidding companies on
price rather than accepting all bids as final. He also
stated his firm objection to any interference by
representatives of bidders trying to influence members of the
tender review board in the direction of that bidder,s drug.
The IMoH will shut down the Baghdad offices of any company
found to be using these practices and will remove from the
tender review board any employee found to be involved.
8. (SBU) Payment for tendered pharmaceuticals will take place
in three stages: 10% will be paid to the tender awardee at
the conclusion of the contract for supply of the
pharmaceuticals, and 40% will be paid upon presentation of
proof that the product has been shipped. The remaining 50%
will be paid upon presentation of proof of acceptance, which
will be available to the tender awardee within 72 hours.
This will be a substantial reduction form the previous 60-90
day wait time which had been generated primarily by the
requirement that all imported drugs be tested before being
cleared for entry into Iraq. In the future, IMoH will not
require testing for any product that has been approved by the
EU or US FDA; it will only test those products without such
approval. Pharmaceuticals will be shipped initially to
Amman, which will be used as a holding point; then directly
to end users.

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

9. (SBU) Atmospherics at this meeting were quite positive;
CPA has clarified its vision of PhRMA and PhRMA members'
roles in the reconstruction of the Ministry of Health and has
definitive answers to many of the questions that had
concerned PhRMA reps, most importantly including the roles of
and requirements for importation of branded pharmaceutical
products vs. generics. PhRMA members also seemed heartened
by the news that the long-awaited formulary is nearing
completion, and appear willing to work constructively to help
meet IMoH's requests.

10. (U) IMoH Procurement Director Scott Svabek cleared this
cable.
GNEHM

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