US embassy cable - 05ROME3767

C O N F I D E N T I A L SECTION 01 OF 03 ROME 003767 
 
SIPDIS 
 
STATE FOR EUR/WE (YOUNG/FETCHKO) AND OES/IHA (OSTFIELD), 
HHS FOR OS/OPHS/OGHA (TGAY/PBUDASHEWITZ) 
 
E.O. 12958: DECL: 11/14/2015 
TAGS: IT, OTRA, OVIP, PREL, SOCI, TBIO, FAO 
SUBJECT: SCENESETTER FOR DHHS SECRETARY MICHAEL LEAVITT'S 
ITALY TRIP 
 
REF: A. STATE 205181 
     B. ROME 003731 
 
Classified By: Acting Economic Minister Counselor Kathleen M. Reddy, fo 
r reasons 1.4(b) and (d). 
 
SUMMARY 
------- 
1.  (C)  Ambassador Spogli and Minister of Health Francesco 
Storace warmly welcome your visit to Italy to further our 
already excellent relations in health cooperation.  Italy has 
been a key U.S. ally and steadfast partner.  Italy is the 
third largest contributor of troops to coalition forces in 
Iraq, the largest contributor to NATO Balkans operations, and 
commands international security assistance forces (ISAF) and 
a Provincial Reconstruction Team in Afghanistan.  Newfound 
international leadership has weighed heavily on the Italian 
public, most of whom are convinced a terror attack will occur 
here soon.  Prime Minister Berlusconi's government has been 
particularly supportive of our policies; we hope to continue 
effective coordination with the GOI, should a center-left 
coalition win elections next spring. 
 
2.  (U)  We enjoy a robust collaboration on medical/health 
research, and the Embassy has excellent contacts at the 
Ministry of Health, the Higher Institute of Health, and other 
health agencies.  The Department of Agriculture (USDA) has 
also cooperated closely with the Ministry of Health's 
Veterinary Service to facilitate the export of "prosciutto" 
hams to the United States in accordance with U.S. food safety 
requirements.  On our commercial interests, the healthcare 
market is important for U.S. manufacturers.  The Foreign 
Commercial Service advocates for U.S. pharmaceutical 
companies with the Ministry of Health on issues of pricing, 
consumer choice, and quality of medical care.  On pandemic 
preparedness, the Ministry has almost finished revising the 
GOI's pandemic influenza preparedness plan according to the 
WHO's most recent guidelines.  The Ministry has also 
announced that Italy paid five million euros in pre-emption 
rights to purchase 36 million doses of vaccine, enough to 
cover 20% of the population.  The GOI is also spending 1.5 
million euros to stockpile retroviral drugs, and another one 
million euros on surveillance.  On the animal health and 
veterinary side, the GOI has so far issued four ordinances 
and one draft law (Decreto Legge) to prevent the outbreak of 
high pathogenic avian influenza (AI) in Italy.  END SUMMARY. 
 
 
ITALY OUR STRONGEST ALLY ON THE CONTINENT 
----------------------------------------- 
 
3.  (C)  Italy is our strongest ally in continental Europe; 
and our political, military and anti-terrorism cooperation is 
excellent.  Italy is the third largest contributor of troops 
to coalition forces in Iraq; the largest contributor to NATO 
Balkans operations (Kosovo, Bosnia, Macedonia, Albania); 
commands international security assistance forces (ISAF) and 
a Provincial Reconstruction Team in Herat, Afghanistan; is 
hosting a training center for peacekeeping forces in Vicenza; 
provided C-130 support for the Darfur Airlift; hosted 
Democracy Assistance Dialogue events for Turkey and Yemen, 
and took over command of KFOR in Kosovo in October of 2005. 
Italy is also providing judicial training assistance in Iraq 
and Afghanistan. 
 
4.  (C)  Prime Minister Silvio Berlusconi, who met with the 
President November 1, has been under strong pressure to 
continue a withdrawal of Italian troops from Iraq.  He has 
indicated he will do so in coordination with international 
allies and the Iraqi government. 
 
5.  (SBU)  PM Berlusconi leads a four-party coalition 
government of the center-right and has been PM since 2001, 
the longest consecutive period an Italian PM has served since 
just after World War II.  Elections are scheduled for April 
9, 2006.  Berlusconi's center-right coalition is down in the 
polls, undermined by internal leadership spats and continued 
economic stagnation.  The center-left opposition also is 
plagued by internal disputes, but former European Commission 
President Romano Prodi won a triumphant electoral victory in 
Italy's first-ever coalition primaries on October 16. 
Pending electoral law changes may slightly increase the odds 
for the center-right, but it is too early to deal Berlusconi 
out.  However, most political observers predict Prodi's 
center-left coalition will win in April. 
 
ROBUST HEALTH/MEDICAL RESEARCH WITH ITALY 
----------------------------------------- 
 
6.  (U) Francesco Storace became Minister of Health after a 
Cabinet reshuffle following the defeat of the ruling 
coalition in a dozen regional elections, including Lazio, of 
which he was president.  The change has had no negative 
effect on our excellent cooperation, which has continued over 
at least two decades.  The bilateral relationship has 
significantly expanded since the DHHS-Ministry of Health 
Memorandum of Understanding on oncology, rare/orphan 
diseases, and bioterrorism was signed in 2003.  In late 
September of this year, in Rome, we reviewed all ongoing 
health/medical cooperation at the Joint Committee Meeting 
mandated every two years under the bilateral Umbrella S&T 
Agreement. In early October, a delegation from the National 
Institute of Allergy and Infectious Diseases (NIH/NIAID) met 
with counterparts at the Higher Institute of Health's 
Spallanzani Hospital to discuss joint projects on 
bioterrorism.  In mid-October, the Ministry of Health 
formally proposed collaboration in the following additional 
areas:  adult stem cells, epidemiology and prevention of the 
leading causes of mortality, organ transplantation and 
cellular therapies, and avian and pandemic influenza.  The 
Embassy enjoys excellent contacts with the Ministry, the 
Higher Institute of Health, and other health agencies. 
 
COOPERATION FOR U.S. EXPORT PROMOTION 
------------------------------------- 
 
7.  (U)  Since at least 1990, the Department of Agriculture 
(USDA) has cooperated closely with the Ministry of Health's 
Veterinary Service.  The Embassy's Foreign Agriculture 
Service facilitates Italy's export of Parma and San Daniele 
hams to the United States, worth about 36 million euros in 
2004, through USDA veterinary inspections of "prosciutto" ham 
production facilities. 
 
HEALTHCARE TECHNOLOGIES MARKET STRATEGICALLY IMPORTANT 
--------------------------------------------- --------- 
 
8.  (U)  U.S. companies in Italy, represented by the Italian 
American Pharmaceutical Group, operate fourteen manufacturing 
plants, eight research centers, and employ 15,000 people. 
U.S. firms also invest $20 million annually (27% of the 
industry's annual expenditure on R&D). 
 
9.  (U)  The Italian healthcare technology market is of 
strategic importance to U.S. exporters.  Of a total $10 
billion in U.S. exports to Italy in 2004, approximately $2 
billion were in healthcare products.  Some 290 Italian 
companies will participate in the Medica Fair organized by 
the Department of Commerce in Germany.  FCS Italy will host 
an important healthcare trade mission in May 2006, and will 
participate in the "Expo Sanita Fair" in Bologna. 
 
ITALIAN PREPAREDNESS FOR AVIAN/PANDEMIC INFLUENZA OUTBREAKS 
--------------------------------------------- -------------- 
 
10.  (U)  Italy has almost completed revising the GOI's 
avian/pandemic influenza preparedness plan along guidelines 
issued by the World Health Organization this spring.  The 
revision awaits Minister Storace's signature.  In early 
September, the Ministry of Health announced that Italy paid 
five million euros in pre-emption rights to purchase 36 
million doses of vaccine, enough to cover 20% of the 
population.  The GOI is also spending 1.5 million euros to 
stockpile retroviral drugs, and another one million euros on 
surveillance.  On the animal health and veterinary side, the 
GOI has issued four ordinances and one draft law (Decreto 
Legge) to prevent the outbreak of high pathogenic avian 
influenza (AI) in Italy.  The Ministry of Health is opening a 
new "Center for the Coordination and Response to Animal 
Disease" and has been authorized to hire 60 new veterinarians 
for border inspection points, 50 new support staff at the 
Ministry of Health, and 96 new Carabinieri (federal police) 
assigned to the Ministry's food safety unit.  An ordinance 
requiring mandatory indication of origin in all poultry and 
egg products, both imported and domestically produced, went 
into effect on October 17.  On October 27, Genoa's Advanced 
Biotechnology Center announced that it has developed a 
specific test for the H5N1 AI strain that can produce results 
in under two hours.  Italian veterinarians have conducted 
over 1,000 tests on domestic poultry and wildfowl.  Only one 
sample, on November 9, tested positive for the low repeat low 
pathogenic H5N1 virus strain. 
 
ITALIAN HEALTH CARE SYSTEM - IN TRANSITION 
------------------------------------------ 
 
11.  (U)  The Italian National Health Service (NHS) was 
established in 1978 as a public system funded by general 
taxation.  It provides universal coverage and comprehensive, 
free healthcare.  Total healthcare expenditure last year was 
113 billion euros, about 8.5% of GDP, in line with the OECD 
average of 8.5% and the EU average of 8.2%.  Expenditures on 
drugs totaled 19.3 billion euros, fourth in the EU after 
Germany, France and the UK. 
 
12.  (U)  From 1978 to 2000, the central government financed 
and managed the NHS; but in 2001, responsibility began to 
devolve to the regions.  The roles and responsibilities of 
the central and regional governments, however, are not clear. 
 This lack of clarity on competence has led to regions 
overspending and expecting the central government to make up 
the deficit.  In addition, there are often major delays in 
the transfer of funds from the central government to the 
regions.  In 2004, a new body, the National Drug Agency, 
became responsible for drug approvals, pricing and 
reimbursement, with input from the central and regional 
governments.  Industry critics maintain that patented drug 
prices are set too low -- 20% below the EU average price. 
U.S. pharmaceutical companies are concerned that pricing 
policies and other cost-cutting measures discourage 
innovation in pharmaceutical research. 
SPOGLI