US embassy cable - 05SANSALVADOR2239

UNCLAS SECTION 01 OF 02 SAN SALVADOR 002239 
 
SIPDIS 
 
STATE PASS AID/LAC 
COMMERCE FOR 4332/ITA/MAC/MSIEGELMAN 
COMMERCE ALSO FOR 3134/ITA/USFCS/OIO/WH/DDEVITO/BARTHUR 
 
E.O. 12958: N/A 
TAGS: ECON, SOCI, KIPR, ETRD, ES 
SUBJECT: DRUG PROCUREMENT CHANGES COULD POSE HEALTH RISKS 
 
Reftel: 2004 SAN SALVADOR 2037 
 
1. Summary. The Salvadoran Chemical and Pharmaceutical 
Manufacturers Association (INQUIFAR) is pushing the 
Salvadoran Social Security Institute (ISSS) to relax its 
requirements for the procurement of seventy medicines for 
which the ISSS now requires the manufacturer to either 
submit evidence of registration with certain foreign drug 
regulators (the U.S. Food and Drug Administration, for 
example) or submit a bioequivelancy study. ISSS Director 
Mariano Pinto insists that for most of the seventy drugs, 
ISSS will not lower its standards, citing health concerns 
that could arise if medicines of dubious quality are given 
to persons suffering from AIDS or other serious illnesses. 
U.S. and multinational pharmaceutical companies, represented 
in El Salvador by the Central American Federation of 
Pharmaceutical Laboratories (Fedefarma), make an argument 
similar to Pinto's, citing health concerns, not intellectual 
property rights, as nearly all of the medicines in question 
are not patent protected in El Salvador. We propose 
supporting Fedefarma's position but seek Washington 
feedback. See action request in para. 7. End summary. 
 
2. The Salvadoran Chemical and Pharmaceutical Manufacturers 
Association (INQUIFAR), which represents local manufacturers 
of pharmaceutical products (including one owned by Personal 
Secretary to President Saca Elmer Charlaix), recently 
 
SIPDIS 
launched a public campaign to push the government-affiliated 
Salvadoran Social Security Institute (ISSS) to relax its 
requirements for the procurement of certain medicines. 
Currently, for about seventy drugs used to treat illnesses 
such as hypertension, AIDS symptoms, or cancer, ISSS 
requires that a manufacturer present one of the following 
before making a purchase: (a) evidence of approval and 
registration in at least two of the following countries: the 
United States, Canada, England, Germany, France, 
Switzerland, Holland, Sweden, Denmark, Norway and Japan; or 
b) certification from the European Agency for the Evaluation 
of Medical Products (EMEA) or c) the results of 
bioequivalency and bioavailability studies. 
 
3. INQUIFAR President Jose Ancalmo told econstaff that the 
ISSS standards are a technical barrier to trade that exclude 
local manufacturers from participating in ISSS tenders. 
INQUIFAR claims that medicines they manufacture are 
evaluated and approved by the National Public Health 
Council, and that what is good enough for the council should 
be good enough for ISSS. Ancalmo also argued that 
bioequivalency studies, which cost $30,000 to $50,000 each, 
are too expensive for the local laboratories to afford. 
Finally, he claimed that there exist no studies showing that 
locally made medicines are not safe. 
 
4. ISSS Director Mariano Pinto told econoff that he has 
serious concerns regarding the quality of medicines produced 
by local laboratories and therefore will not lower ISSS 
standards for the seventy drugs included in "Category One." 
Pinto explained that ISSS assigns each drug that it procures 
to one of four categories, with category one reserved for 
drugs for which effectiveness cannot be compromised, such as 
drugs to treat hypertension, AIDS symptoms, or cancer. 
 
5. Pinto complained that the local regulatory agency, the 
National Public Health Council, does not do a credible job 
of ensuring the quality of the medicines. The Council 
quickly approves most new drug registrations, often relying 
on other firms' test data or no test data at all to evaluate 
the drugs effectiveness and safety (reftel). He noted that 
local laboratory owners comprise the Council's Board of 
Directors. Pinto added, however, that the list of Category 
One drugs is frequently updated as local manufacturers 
slowly raise their quality standards. He said that a few 
drugs would probably be removed from the list during the 
next few weeks--plans for which he recently announced 
publicly. Pinto said that for the other drugs, ISSS would 
continue to require bioequivalency studies or evidence of 
prior registration. 
 
6. Representatives of the Central American Federation of 
Pharmaceutical Laboratories (Fedefarma) have met with 
econoff to present their views on the issue. Executive 
Director Rodolfo Lambour said that the issue is primarily 
one of protection of public health. He cautioned, however, 
that if ISSS were to accept test data prepared by Fedefarma 
companies to support bids submitted by local manufacturers, 
then he would have concerns, as he does already with the 
Council's registration process, regarding CAFTA and TRIPs 
data exclusivity provisions. Lambour was unable to provide 
an estimate of the value of the drugs ISSS procures from 
"Category One." 
 
7. Comment and action request. At present, we view this as a 
drug safety issue, not an intellectual property rights 
issue. We propose supporting Fedefarma's position that 
opening up ISSS procurement to firms that do not meet basic 
quality standards creates unnecessary health risks for 
Salvadorans. Our approach would be to suggest that the 
Salvadorans maintain standards for procurement consistent 
with international practices established by the World Health 
Organization. We would also caution the Salvadorans that 
opening up procurement to manufacturers that do not meet 
quality standards may not benefit local manufacturers and 
instead may trigger a flood of low quality imports from 
other countries. Given the sensitivities related to 
government procurement of medicines, post welcomes 
Washington feedback before moving forward. End comment and 
action request. 
 
Barclay