US embassy cable - 05TAIPEI4160

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004160 
 
SIPDIS 
 
STATE FOR EAP/TC, ALSO PASS AIW/W 
 
E.O. 12958: DECL: 10/12/2010 
TAGS: AMED, EIND, TBIO, TW 
SUBJECT: TAIWAN MAY PRODUCE OSELTAMAVIR IF AVIAN INFLUENZA 
BREAKS OUT 
 
REF: TAIPEI 3742 
 
Classified By: AIT DIRECTOR DOUGLAS PAAL FOR REASONS 1.5 (b) (d) 
 
1.  (C) Reftel reported on indications from senior officials 
that Taiwan may be capable of and intending to develop the 
ability to produce the anti-viral drug oseltamavir (trade 
name tamiflu), with or without permission from the patent 
holder, in the event of a breakout in Taiwan of human to 
human transmission of avian influenza (AI). 
 
2.  (U) According to an October 12 press report in the 
Liberty Times, Dr. Steven Kuo (shui-sung), Director of 
Taiwan's Center for Disease Control (TCDC) said that Taiwan 
should manufacture oseltamavir if avian influenza breaks out 
on Taiwan in order to protect the island's population. 
According to the press reports, Kuo said that Taiwan has the 
capability to produce the drug and should do so if needed 
whether patent holder Roche provides permission or not. 
Separate news reports on October 12 cite Taipei City Animal 
Control officials as warning the public not to have contact 
with live poultry because of the danger of avian influenza. 
Animal Control officials state that 14 Asian nations have 
been infected with AI and that now only South Korea, Japan 
and Taiwan are not infected. 
 
Production Plans 
---------------- 
3.  (C) TCDC Director Kuo confirmed the news reports to AIT 
on October 12.  He said that he had also given an interview 
to the New York Times on the same subject.  Kuo went on to 
emphasize that Taiwan is struggling to strike an appropriate 
balance between the need to manufacture oseltamavir for 
national security needs and appropriate intellectual property 
rights protection.  He noted that Taiwan's patent law 
provides for compulsory licensing, which also requires 
compensation be paid to the rightsholders.  He confirmed that 
Taiwan has established a task force to examine the issues 
involved on both the technical and legal fronts.  He said 
that both Roche and Gillette have claims on the rights to 
oseltamavir.  According to Kuo, Taiwan now has drug 
stockpiles for less than 1% of the population and seeks to 
have sufficient dosages to treat 10% of the population.  He 
said Taiwan now has contracts with Roche to supply by mid 
2006 sufficient stocks to treat another 3-4% of the 
population.  If Taiwan invokes compulsory licensing and 
produces its own supplies, Kuo said the goal would be to 
produce enough medicine to supply another 5% of the 
population.  Thus, Taiwan would meet the WHO recommendation 
to have drug stockpiles to treat 10% of the total population. 
 In concluding his remarks, Dr. Kuo emphasized that to date, 
no Taiwan firm has started to produce the drug.  He said that 
Taiwan is simply not yet at the point where it is ready to 
engage in discussions with Roche on the issue or to begin 
production.  The raw materials for the drug would be imported 
from China.  Kuo said that Taiwan has been importing the raw 
materials for many years and would only need to significantly 
increase its imports in order to be able to produce the 
oseltamavir. 
 
Patent Law Provides for Compulsory Licensing 
-------------------------------------------- 
4.  (U) Taiwan's patent law includes a compulsory licensing 
provision that officials could invoke to compel licensing 
authority from Roche to produce the drug in event of a 
declared emergency.  Article 76 of Taiwan's patent law allows 
the Patent Authority to grant a right of compulsory licensing 
to satisfy domestic market requirements under three 
conditions:  1) national emergency; 2) non-profit use of a 
patent to enhance public welfare or 3) when an applicant has 
failed to reach a licensing agreement with the rights holder 
under reasonable commercial terms and conditions within a 
considerable period of time.  Under Taiwan's patent law, 
Roche would receive "appropriate compensation" for the 
emergency use of its intellectual property.  In case of a 
dispute over the amount of compensation, Taiwan's Patent 
Authority would determine the compensation.  Taiwan's 
Intellectual Property Office confirmed to AIT/T the 
compulsory licensing provisions in its Law.  To AIT/T's 
knowledge, this provision has only been used once and that 
was to secure licensing rights under provision number 3 above 
in the information technology industry. 
 
5.  (C) Comment:  We believe that Taiwan has been carefully 
planning how to increase its supply of oseltamavir and is 
prepared to invoke compulsory licensing provisions to achieve 
its goal of having sufficient stocks of the drug to treat 10% 
of its population.  MOFA Vice Minister Kau Ying-mao assured 
the Director on October 12 that Taiwan is sensitive to this 
issue, and will work to accommodate the rightsholders.  End 
Comment. 
PAAL