Cablegate: Fda Chief Expects No More Cl's

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TAGS: ECON KIPR TH

SUBJECT: FDA CHIEF EXPECTS NO MORE CL'S

1. Summary: Dr. Siriwat Tiptaradol, Secretary General of the Thai
Food and Drug Administration (FDA), said he expected no new
compulsory licenses on drugs, crediting progress in recent
discussions with European pharmaceutical companies on pricing and
access for four cancer drugs. However, the companies say
discussions thus far have been preliminary and have not offered any
concessions. Ongoing discussions with three companies hit by
compulsory licenses in the last year have not progressed and the
Government Pharmaceutical Organization is moving forward with plans
to import a generic copy of HIV drug Aluvia, nine months after
announcing a compulsory license. Thai political parties are vague
on what position they will hold on the issue after December
elections. End Summary.

2. In a courtesy call by Econ Counselor and Econoff on October 25,
Dr. Siriwat said he thought there "shouldn't have to be more
compulsory licenses," but emphasized this was his personal opinion
and he could not speak for the Ministry of Public Health. The
Ministry is considering breaking patents on four cancer drugs
distributed by three European companies, following on the issuance
of compulsory licenses on two HIV/AIDS medicines and a heart drug
over the last year. The four cancer drugs are distributed by
Swiss-owned Novartis and Roche, and French-owned Sanofi-Aventis.
Dr. Siriwat said initial discussions beginning October 18 had gone
well and companies had responded positively, particularly Roche.
Siriwat explained the Ministry's long-held position that Thailand's
public health system was unable to cover the costs for expensive
life-saving drugs and compulsory licenses were necessary to widen
access. He assured that generic versions would be provided only to
the poor under the RTG's universal health care program. Dr. Siriwat
claimed the Thai program "will actually expand the companies' market
in Thailand," as those who can afford the drugs, such as patrons of
private hospitals and those with commercial health insurance, will
still pay the current prices.

3. Dr. Rolf Ammelburg, Managing Director of Roche Thailand, said
his initial meeting with the FDA had gone well; the company showed
its openness to discussion and new proposals, but made no
commitments. Ammelburg said the FDA had proposed that Roche lower
the price of their lung cancer drug erlotinib, submit to a voluntary
license, or face the possibility of a compulsory license. The FDA
did not clearly define how a voluntary license would operate, but
Ammelburg assumed that the FDA aimed to pursue domestic production
under license from Roche. He noted, however, that Thailand may not
have the domestic capability to produce the drug. Thailand had
announced two years ago it would begin generic manufacture of
another Roche drug, Tamiflu, but has yet to produce a single
capsule. Ammelburg felt that the FDA was not anxious to do a
compulsory license and was strongly pushing the other options to
avoid such a result.

4. There has been no further progress in discussions with Merck or
Abbott, whose patents on antiretrovirals were broken in November
2006 and January 2007, respectively. The FDA announced October 17
that it had approved the registration of a generic version of
Aluvia, a new heat-stable form of Abbott's AIDS drug Kaletra. The
Government Pharmaceutical Organization (GPO) said it would soon
begin importing the drug from Indian generic manufacturer Matrix
Laboratories, enough for 8000 HIV-positive patients for six months.
Matrix offered a price of USD 695 per patient per year, about three
hundred dollars less than Abbott's listed price.

5. The FDA appears to have taken a questionable shortcut to approve
the generic version of Aluvia. When Thailand issued a compulsory
license on Kaletra, the older version of the antiretroviral, Abbott
retaliated by pulling the registration paperwork for the new
version, Aluvia, which was then only months away from approval.
Thailand has decided to import generic Aluvia, though its compulsory
license is actually on Kaletra. Both drugs share the same chemical
combination, lopinavir/rotinavir, but it is unclear if the
compulsory license on the older drug would allow importation of a
generic version of the new drug. As well, safety and efficacy data
required for approval is not on file for Aluvia, and FDA officials
say they simply accepted the data for Kaletra in its absence. The
FDA added a condition to the drug registration that a sample of
patients would be tested after six months to determine if the
generic version was effective.

Abbott in the dock
------------------

6. The Thailand Competition Commission is reviewing a complaint
local public health NGOs have brought against Abbott for its
decision earlier this March to withdraw the pending registrations of
seven new drugs, including Aluvia. The complaint alleges that
Abbott's action contravenes Section 28 of Thailand's Competition Act
which forbids restricting opportunities for consumers "to purchase
goods or services directly from business operators outside the

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Kingdom." The Commission is still gathering information about the
case and has asked Abbott for market share and cost data. If the
Commission concludes that Abbott made anti-competitive practices,
they can recommend the case to a court for a fine or possible
criminal charges. Abbott's lawyers say the case probably would not
meet the Competition Act's criteria for market dominance for
anti-competitive practices, but are nevertheless concerned that
local Thai management could be brought up on criminal charges.

Politics isn't over
-------------------

7. Political parties vying for election this December are hedging
on policies on compulsory licenses they might follow if elected. In
a forum on access to medicine hosted by public health NGOs, Mr.
Buranaj Smutharaks, representing the Democrat Party, said his party
would not obstruct the compulsory licensing process. Party leader
Abhisit Vejjajiva had earlier delivered a pro-business message on
the issue to a business and investor audience, saying he would work
with the pharmaceutical industry and would use compulsory licenses
only as a last resort. However, Buranaj told the health forum that
"it is highly possible the last resort will get the first priority."
Representatives from the People Power Party and Chart Thai party
told the forum they supported the decision to adopt compulsory
licenses, but could not commit to how their parties would pursue the
issue as part of a likely coalition government.

8. Comment: Less than two months remain until national elections
and a thorough change in government, but this is ample time in which
to implement more compulsory licenses. Despite Dr. Siriwat's view
that no more will be necessary, the final decision will be made by
the Minister of Public Health who may yet use his last days in
office to push through a last-minute bid for more CLs.
Post-election, much of the Ministry's top staff will turn over and
there may be few opportunities in the future to pursue this policy.
The leading political parties have paid lip service to the current
policy, but for the most part they are pro-business and would be
unlikely to pursue compulsory licenses as aggressively as has the
current government. End Comment.

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