Cable 230726

Sostiene que el objetivo de apoyar la producción local (de medicinas) posiblemente a pedidos específicos de socios cercanos al presidente Rafael Correa en la industria farmacéutica local.

id: 

230726

date: 

10/21/2009 22:19

refid: 

09QUITO893

origin: 

Embassy Quito

classification: 

CONFIDENTIAL

destination: 

09QUITO998

header:

VZCZCXYZ0012
RR RUEHWEB
DE RUEHQT #0893/01 2951039
ZNY CCCCC ZZH
R 212219Z OCT 09
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC 0232
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHBR/AMEMBASSY BRASILIA 0052
RUEHBU/AMEMBASSY BUENOS AIRES 0007
RUEHCV/AMEMBASSY CARACAS 0076
RUEHLP/AMEMBASSY LA PAZ OCT MANAGUA 0001
RUEHPE/AMEMBASSY LIMA 0090
RUEHSG/AMEMBASSY SANTIAGO
RUEHTG/AMEMBASSY TEGUCIGALPA 0001

----------------- header ends ----------------
C O N F I D E N T I A L QUITO 000893 
 
SIPDIS 
DEPT PLEASE PASS TO USTR FOR BENNETT HARMAN 
DEPT FOR WHA/AND AND EB/TPP/IPE 
 
E.O. 12958: DECL: 2019/10/21
TAGS: ETRD, KIPR, EIND, EC 
SUBJECT: Presidential Decree on Compulsory Licensing Expected Soon
 
REF: QUITO 998 
 
CLASSIFIED BY: Heather Hodges, Ambassador, State, Exec; REASON:
1.4(B), (D) 
 
1.   (SBU) Summary.  President Correa appears set to issue within 
days a presidential decree to pave the way for compulsory licensing 
of patented pharmaceutical products.  Local representatives of
international pharmaceutical companies point out that a 
presidential decree is not legally required for the government to 
proceed with compulsory licenses, and worry that a decree will make 
it more difficult for the GoE to moderate its stance.  The 
Ambassador raised U.S. concerns about this issue on October 19 with 
three key GoE officials in the Ministries of Foreign Affairs and 
Production, and EmbOffs are in close contact with industry 
representatives.  End Summary. 
 
 
 
2.  (U) In his October 17 television address, President Correa 
expanded on his earlier threats to annul pharmaceutical patents
(ref A) and noted his intention to publish a presidential decree 
early this week.  Correa said he plans to initially issue 
compulsory licenses for all medicines, and then the policy will be 
applied to agrochemicals and other types of products that could be 
considered as public goods.  Correa claimed international treaties 
allow Ecuador to establish compulsory licenses and described the 
GoE as a pioneer in implementing this policy in which knowledge is 
treated as a public good. 
 
 
 
3.  (C) In an October 15 meeting, Maria del Carmen, Executive 
Director of IFI - a local chamber representing international R&D 
pharmaceutical companies, told Econoff and  Commercial Assistant 
that a presidential decree on compulsory licensing of patented
pharmaceutical products had been drafted, but that the content was 
not yet final.  According to del Carmen's sources, the decree is 
expected to have two main provisions declaring:  1) access to 
medicines as a "public interest," and 2) all patented 
pharmaceutical products are subject to potential compulsory
licensing.  A third provision requested by local industry to allow 
importation of products under compulsory license was reportedly 
rejected by President Correa because it did not promote local 
production.  However, Andres Ycaza, the head of Ecuador's 
Intellectual Property Institute, said in an October 19 El Universo 
article that if local manufacturing of a product under compulsory 
license was not possible, copies could be imported. 
 
 
 
4.  (C) Local representatives of U.S. and other international R&D 
pharmaceutical companies have identified and been in contact with 
potentially sympathetic ministries. They see as allies the Minister 
of Health Caroline Chang, Coordinating Minister for Production 
Nathalie Cely, and Coordinating Minister for Social Development 
Jeanette Sanchez.  IFI has been told that these ministers have 
tried to explain to Correa the potential negative implications for 
economic development and the health system of issuing wholesale 
compulsory licenses, but he has rejected their arguments.  Minister 
of Health officials are reportedly concerned they will be involved 
in enforcing any compulsory license and worry about the quality of 
copies. [Copies of patented pharmaceutical products are already 
pervasive in Ecuador and there have been problems with some not 
containing the active ingredient(s) of the patented product.] 
According to IFI, Chang is looking into financial irregularities 
and business dealings of some of the local producers in an attempt 
to gain some leverage and better understand their true objectives. 
 
5.  (C) On October 19, the Ambassador took advantage of a 
previously schedule meeting at the MFA to express concern over the 
issue with three key GoE interlocutors on economic policy.   The
Ambassador spoke at length with Technical Secretary Mauricio Pena
of the Coordinating Ministry for Production (second to Minister 
Cely).  Pena claimed not to have details on the President's plan,
but said Correa was being motivated by an interest in gaining 
access to medicine and that the Ministry of Health was in charge of 
the issue.   In her meeting with MFA Vice-Minister for Trade Julio 
 
Oleas, the Ambassador said that while not delivering official 
points, she wanted to register Washington's concern with the GoE's 
plans for compulsory licensing as expressed by President Correa.
Oleas responded candidly that it was a presidential, political 
decision and that now the government would have to figure out what 
to do.  The Ambassador noted the IPR eligibility requirements of 
unilateral trade programs such as the Andean Trade Promotion and 
Drug Eradication Act and the Generalized System of Preferences. 
Oleas said he was also aware that the issue is covered in 
provisions of various international treaties and directed Pena to
gather more details about the President's plan and forward to the
Mission.  Later, in response to urging by MFA Under Secretary for
Bilateral Affairs Jorge Orbe that Ecuador and the United States 
develop a closer relationship through our Bilateral Dialogue
process, the Ambassador pointed to the potential IPR issue as a 
serious problem. 
 
 
---------------------------------- 
 
COMMENT AND REQUEST
---------------------------------- 
 
 
 
6.  (SBU) Despite Pena's claim that Correa's principal interest is 
access to medicine, we believe that his primary objective is 
promotion of local production, both on ideological grounds and 
possibly in response to specific requests by close associates in 
the local pharmaceutical industry.  Among those close associates 
are Renato Carlo, President of the Chamber of Small Industries in 
Guayaquil and former President of ALFE, the association of local 
pharmaceutical producers, and the Ayala family (Rafael and 
Mauricio) who own Farmayala.  Both allegedly contributed financial 
resources to President Correa's presidential campaign and Carlo is 
also a close friend from school.  Econ and FCS officers continue to 
consult with representatives of U.S. pharmaceutical companies and 
have suggested they present President Correa with data that would 
help dispel his misperceptions regarding the extent to which 
wholesale compulsory licensing will yield a substantial increase in 
local production.  The Embassy has also reached out to other 
diplomatic missions and conveyed an interest in collaborating. 
Although concerned, neither the French nor the Swiss Missions have 
yet approached the GoE on the issue.  According to our contact at 
the French Embassy, the local EU delegation is calling a meeting 
next week with representatives of Member States to devise a common 
approach.  While not a member of the EU, the Swiss Embassy expects 
to join the EU meeting next week.  The major French pharmaceutical 
companies in Ecuador are Sanofi-Aventis and Salvie; the Swiss 
companies are Roche and Novartis.  The German Mission did not 
convey a high level of interest in pursuing the issue with the GoE. 
We will follow up with the British Mission over the next couple 
days. 
HODGES 
=======================CABLE ENDS============================