US embassy cable - 04LJUBLJANA381

UNCLAS  LJUBLJANA 000381 
 
SIPDIS 
 
 
USDOC FOR 4232/MAC/EUR/EERIS/CEEBIC/BURGESS/ROGERS 
USDOC FOR MAC/ADVOCACY/NUGENT 
VIENNA FOR COMMERCIAL COUNSELOR 
 
SENSITIVE 
 
E.O. 12958:    N/A 
TAGS: BEXP, ELAB, ETRD, PHUM, SENV, AMGT, SI 
SUBJECT:  SLOVENIA: COM PRESSES HEALTHMIN FOR TRANSPARENCY 
IN ONCOLOGY INSTITUTE TENDER 
 
REF: A) LJUBLJANA 292 
 
     B) 03 LJUBLJANA 1103 
 
Sensitive but Unclassified.  Please protect accordingly. 
 
1. (SBU) SUMMARY:  In a 16 April meeting, Minister of 
Health, Dusan Keber, assured COM that a public tender 
competition to equip a Slovenian medical facility with high- 
tech scanning equipment will be fair and transparent.  Keber 
noted that Meditrade (General Electric's distributor in 
Slovenia and the only U.S. company expected to submit a bid) 
will have the same chance as any other bidder to win the 
estimated Euro 7 million tender.  He indicated that the 
Ministry of Health (MoH) will appoint a commission to assess 
bids and award the contract.  Local GE representatives have 
expressed concerns about the overall transparency of the 
process and noted traditional MoH bias in favor of Siemens 
or Philips.  COM also raised U.S. pharmaceutical companies' 
concerns about the MoH drug insurance reimbursement program 
and the associated financial losses incurred by the U.S. 
companies as a result of the plan.  Keber reported that it 
was too soon to assess the new program's overall benefit, 
but that he remained confident of its long-term 
sustainability.  Finally, Keber pledged to raise concerns 
about the provision of statistics on trafficking in persons 
with his fellow cabinet members, promising immediate 
assistance from his staff, if necessary.  END SUMMARY. 
 
2.  (U) On 16 April, COM, accompanied by Pol-Miloff and FSN 
Commercial Specialist called on HealthMin Dusan Keber to 
advocate on behalf of Meditrade-GE in its bid for a Euro 7 
million tender to equip either the new Oncology Institute or 
another state-run medical facility with new equipment.  The 
tender is due to open in either May or June.  COM also 
discussed the record of the recently adopted health reform 
package.  Simon Vrhunc, MoH State Secretary for Health 
System Organization, also participated in the meeting. 
 
Equipping the new Oncology Institute 
------------------------------------ 
 
3.  (U) The approximately Euro 7 million tender will be, by 
far, the most valuable offer in the Slovenian healthcare 
system for the next couple of years.  The tender is expected 
to include the following equipment: PET/CT scanner; magnetic 
resonance; computer tomography; 2 gamma cameras; digital 
mamography x-ray system; 3 ultrasounds; 3 classical x-ray 
units; and 45 monitors for patient care.  According to 
Meditrade-GE, winning the tender is essential to establish 
market presence and position for future sales.  [NOTE:  GE's 
20 percent market-share in Slovenia is well below its 30-35 
percent European average.  END NOTE]. 
 
4. (SBU) COM informed Keber of Meditrade-GE's interest in 
submitting a bid to supply the new Oncology Institute's 
medical equipment.  He highlighted GE's international 
reputation as an industry leader -- known for its superior 
quality at reasonable costs.  COM stressed the importance of 
having an open, fair, and transparent tender process -- one 
where impropriety charges would not stand a chance. 
 
5. (SBU) Keber informed COM that a tender would be announced 
after hospital directors and public officials sort out what 
type of equipment is needed and to which institute it will 
go.  [NOTE:  The new Oncology Institute is battling the more 
established Radiology Institute for the equipment.  END 
NOTE].  The Minister told COM that parliament had queried 
him regarding this tender during its interpellation 
proceedings examining his record, satisfying him that there 
may be outside pressure mounting already to influence the 
bidding process.  [NOTE: The National Assembly conducted 
interpellation proceedings (vote of confidence) against the 
Ministers of Health and of Interior, which they both 
survived (Ref A). END NOTE]. Nonetheless, the MoH will 
appoint a Commission to review all of the bids in accordance 
with public procurement regulations, and Keber assured COM 
that the tender would "fair" and "transparent." 
 
6.  (SBU) Keber explained that the Commission will have to 
consider various factors relating to the tender in order to 
keep it in line with the overarching MoH cost-containment 
policy.  Whereas the equipment under consideration could 
carry-out up to 5,000 examinations per year, the demand thus 
far has been limited.  Only 20 patients in Slovenia required 
such exams in Slovenia in 2003, according to Keber, and they 
were sent to Austria.  As such, Keber said that the 
Commission will have to conduct a cost benefit analysis to 
 
 
determine whether the equipment under consideration is even 
desirable in light of the low demand and impetus to reduce 
costs.  COM noted that the purchase of the new equipment 
could help establish Slovenia as a regional center for these 
types of examinations while defraying some of the costs. 
Keber underscored his earlier point about the transparency 
of tenders run by the MoH and expressed confidence that the 
"best producer will win," noting that GE's Meditrade "can 
win without your support." 
 
Health Care Reforms; U.S. Pharmaceutical Companies 
--------------------------------------------- ----- 
 
7.  (SBU) When COM asked about the benefits brought by the 
recent healthcare reforms, Keber indicated that five months 
was not sufficient time to assess the program's overall 
benefits.  He said preliminary estimates show savings in the 
realm of US $10 million (approximately 4 percent of total 
annual drug costs of the state-run Health Insurance Fund). 
COM noted that U.S. pharmaceutical companies representatives 
have voiced concern over the drug reimbursement plan, and 
its impact on their ability to introduce new drugs to the 
market in Slovenia (ref B).  Keber told COM that while 
pharmaceutical companies, both innovative and generic, 
continue to voice concerns, new data protection laws, 
mandated by the EU and already in place in Slovenia, would 
ensure that profits will go back to the original producers 
of drugs. 
 
TIP Report 
---------- 
 
8. (SBU) COM alerted Keber to concerns about GoS abilities 
to provide information requested by the Embassy for the 
upcoming DoS Trafficking In Persons Report.  Keber promised 
to raise the issue with fellow cabinet members and pledged 
to provide any missing information for the MoH immediately. 
[NOTE:  The relevant GoS office was already alerted to the 
need for timely information and the missing information was 
provided even as COM and Keber were meeting.  END NOTE]. 
 
9.  (SBU) COMMENT: Having survived a parliamentary motion to 
replace him, Keber is well aware that a number of parties 
with various interests will be closely following and 
monitoring the Euro 7 million tender.  With Siemens 
equipment visible in most of the country's clinics and 
hospitals, the medical sector has been traditionally closed 
to U.S. companies thus far.  The MoH's tendering processes 
have been under the microscope recently, as the nation's 
largest hospital (Ljubljana's Klinicni Center) procured 
expensive and unreliable equipment in a questionable tender 
process in September 2003.  According to GE-Meditrade 
representatives, the tender process is much further along 
than Keber's comments would lead us to believe -- well 
beyond the "bickering stage" between the two institutes. 
Mission will continue to monitor the process and support the 
efforts of the sole U.S. company.  END COMMENT. 
 
YOUNG 
 
 
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