US embassy cable - 05TAIPEI3598

UNCLAS SECTION 01 OF 03 TAIPEI 003598 
 
SIPDIS 
 
STATE FOR EAP/RSP/TC AND OES/IHA 
 
STATE PASS TO AIT/W 
 
USDA FAS FOR APHIS/VS, IS 
 
HHS FOR ERICA ELVANDER 
 
E.O. 12958: N/A 
TAGS: TBIO, EAGR, ECON, PREL, TW, Foreign Policy, ESTH 
SUBJECT:   HEALTH MINISTER SAYS TAIWAN WORKING TO PREPARE 
FOR AVIAN INFLUENZA 
 
 
REF: A) 2005 STATE 15149 B) 2005 TAIPEI 00058 C) 2004 TAIPEI 
0249 D) 2003 TAIPEI 03339 E) 2004 TAIPEI 00479 F) TAIPEI 
2626 G) TAIPEI 2731 
 
1.  Summary.  In accordance with reftel A, AIT Director Paal 
delivered Undersecretary Dobriansky's avian influenza (AI) 
demarche to Taiwan Department of Health (DOH) Minister Hou 
Sheng-Mou on August 26.  Paal thanked Taiwan for making AI a 
high priority and encouraged Taiwan to take even more 
preparatory efforts than it already has.  Paal also took the 
opportunity to raise World Health Organization (WHO) 
collaboration and pharmaceutical issues.  Regarding WHO, Hou 
said Taiwan will employ a strategy of "meaningful 
participation" by which it will try to attend and provide 
valuable input to as many WHO meetings as possible. On 
pharmaceutical issues, Paal urged Taiwan to revise policies 
under which health care providers are encouraged to squeeze 
pharmaceutical companies for cost savings.  Hou promised DOH 
was doing all it could to find funds to support innovative 
pharmaceuticals and suggested regularizing a U.S./Taiwan 
dialogue on medical devices and other health issues. End 
Summary. 
 
Avian Influenza 
---------------- 
 
2. Paal delivered Undersecretary Dobriansky's AI demarche to 
Taiwan DOH Minister Hou Sheng-Mou on August 26.  The points 
were modified slightly to recognize the high priority the 
Taiwan Government is already placing on the issue.  Paal 
further acknowledged the significant efforts underway to 
address the potential of a flu pandemic-- including 
President Chen Shui-bian's recent National Security Council 
meeting on the issue (see reftels B-E for plans up to early 
2005; septel will provide details on more recent efforts). 
Paal also welcomed Taiwan's continued excellent 
collaboration with the United States Centers for Disease 
Control (USCDC) built upon the very close cooperation 
established during the SARS crisis. 
 
3.  Hou responded by once again expressing Taiwan's deep 
appreciation of the help provided by the U.S. during the 
SARS crisis.  Hou commended the continued close 
collaboration between Taiwan CDC and USCDC that has 
continued following the abatement of SARS.  Hou also 
referred to his recent meeting with US Department of Health 
and Human Services Secretary Michael Leavitt.  He noted 
that, at that meeting, it was agreed that the two sides 
would regularize bilateral health cooperation meetings.  Hou 
hopes that the next bilateral meeting will be held before 
the end of 2005 in either Washington DC or Atlanta. 
 
4.  Hou said that AI would be one of the major topics of 
discussion (others would include medical devices and a 
discussion of all of the successes resulting from using a 
smart card for Taiwan's national health insurance program). 
Hou related how he had promised Leavitt that Taiwan would 
serve as the "USCDC's sentinel guard" for AI in Taiwan.  Hou 
also reported how following President Chen's emphasis on 
making AI a priority issue, Hou has spent most of his time 
doing risk communication on AI to executive branch agencies, 
the legislature, mayors and commissioners. 
 
5.  Paal encouraged Taiwan to continue to work even harder 
to get the message out as several high-level government 
contacts recently told him that they had not drawn up any AI 
contingency plans for their ministries.  Paal informed Hou 
how AIT has drawn up extensive AI contingency plans, 
including personnel evacuation plans and provisions for home 
isolation in the event evacuation from Taiwan would not be 
possible following an AI outbreak.  Paal strongly encouraged 
Taiwan to require that all government institutions do the 
same type of contingency planning.  Paal also urged that 
Taiwan encourage all of its citizens to have contingency 
plans and provisions in the event they are isolated in their 
homes.  Hou agreed that, while Taiwan has done emergency 
drills at hospitals and included AI in a recent disaster 
planning exercise in Taichung, more such contingency 
planning is needed. 
 
6.  Hou noted a suggestion by Paal that Taiwan move its 
poultry operations indoors in an effort to prevent infection 
crossing over from wild to domestic bird stocks.  Hou also 
responded favorably to Paal's suggestion that Taiwan provide 
briefings to international missions on AI and encourage 
foreign missions to also prepare.  Finally, Paal recommended 
that Hou try to arrange an interview on the subject on 
Taiwan's largest English-speaking radio station in order to 
try to educate the foreign community in Taiwan about the 
importance of AI contingency planning, and the efforts that 
Taiwan is taking to counter a potential pandemic. 
 
WHO 
--- 
 
7.  Paal took the opportunity to raise World Health 
Organization (WHO) collaboration.  Hou said that an 
interagency meeting had recently concluded that with regard 
to WHO, Taiwan will employ a strategy of "meaningful 
participation" by which it will try to attend and provide 
valuable input to as many WHO meetings as possible.  He 
noted that thus far, Taiwan has been able to participate in 
four WHO meetings (two on traditional medicine in china, one 
on health promotion in Thailand and one on health promotion 
in Switzerland). 
 
Pharmaceutical Issues 
--------------------- 
 
8.  Turning to pharmaceutical issues, Paal noted U.S. 
concerns that proposed revisions to Taiwan's National Health 
Insurance Law would eliminate statutory requirements that 
hospitals and medical practitioners be reimbursed for 
medicine and equipment at actual transaction prices (ATP). 
Although this provision is currently not enforced, U.S. 
producers believe the proposed legalization of the current 
reference pricing system will increase the pace of mandatory 
price cuts by the Bureau of National Health Insurance (BNHI) 
and encourage Taiwan medical providers to continue demanding 
deep discounts for pharmaceuticals and medical equipment. 
 
9.  Hou responded that the proposed amendment of the NHI Law 
is part of DOH's plan for "second generation" NHI reform. 
BNHI is chronically short of funds and has instituted a 
"global budget" system that caps NHI payments to medical 
providers.  Limiting expenditures through reference pricing 
may be one way for the cash-short bureau to increase the 
amount of money available to pay for new drugs, he said. 
Bureau of Pharmaceutical Affairs (BOPA) Director General 
Liao Chi-chou noted that the International Research 
Pharmaceutical Manufacturers Association (IRPMA) had 
recommended that BNHI enact rules that would allow patients 
to pay out-of-pocket the difference between the 
reimbursement price and the actual cost for some medicines 
as a means of reducing BNHI's costs.  Hou added that 
revisions in the regulations to base premiums on household 
income vs. wages would increase the amount of funding 
available for new drugs. 
 
10.  Liao then raised DOH's hope that the U.S. would be 
willing to consider a regular meeting to discuss medical 
device related issues.  He said that the U.S. and Taiwan had 
signed an Exchange of Letters in 1998 on medical devices and 
suggested that a regular meeting could take place under the 
framework created by the letters.  Hou noted his hope that 
the next health bilateral would include discussions on Avian 
Influenza, medical device issues and NHI reforms.  Taiwan 
has many valuable experiences, including the use of 
"SmartCard" technology, which it would be willing to share 
with U.S. counterparts.  Hou acknowledged that medical 
device registration and licensing had not proceeded as 
smoothly as DOH had hoped as the initial deadline passed in 
June (reftels F and G), but he insisted that he would 
personally monitor the situation and assign all necessary 
personnel to ensure registration and licensing approvals 
were issued prior to the new December 2005 deadline. 
PAAL