US embassy cable - 03AMMAN7579

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. 
 
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Formulary 
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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. 
 
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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. 
 
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Training 
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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. 
 
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Kimadia 
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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. 
 
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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. 
 
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Comment 
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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