MIAOLI, Taiwan (Reuters) - Taiwan is ready to produce its own Tamiflu, the antiviral avian flu drug, and will not let patent talks with Swiss drug maker Roche AG stand in the way, officials said. 

The island's National Health Research Institute showed media late on Friday a generic version of Tamiflu produced by its laboratories, which it said was 99 percent similar to Roche's drug. 

"The congress and the government in Taiwan have already decided to produce Tamiflu, starting from right now.... once we obtain the material," Su Ih-jen, head of the clinical division at the health institute, told Reuters. 

The Taiwan government was among the first in the world to seek permission from Roche to make Tamiflu, but it has yet to receive an authorization. 

"We have tried our best to negotiate with Roche. It means we have shown our goodwill to Roche and we appreciate their patent. But to protect our people is the utmost important thing," said Su, a former chief of the Centre for Disease Control. 

Taiwan has so far been spared a serious outbreak of the H5N1 virus lethal to humans, but authorities found rare birds infected with the strain in a container smuggled from China on Thursday, the island's first case since late 2003. 

All the birds were destroyed, and officials said there was little danger of the virus infecting local birds and spreading. 

Taiwan made clear it would not wait for Roche's answer on Tamiflu as time is critical to prepare for a possible pandemic. 

"In the case of an outbreak, if Roche cannot supply, what choice do we have?" said Wu Cheng-wen, president of the health research institute. 

FASTER, CHEAPER  Wu said said his research team had successfully duplicated 20 grams of Tamiflu in 18 days and would help local drug companies to mass produce the drug, which is considered the first line of defence against H5N1. 

Taiwan plans to produce one to two million courses of Tamiflu for domestic use by January to March next year and has no plan to export the drug to other countries, Wu said. 

The island is confident it will make Tamiflu faster and cheaper. 

One million courses of locally made Tamiflu cost about T$200 million (US$5.9 million), compared with T$1 billion if purchased from Roche, Su said, adding it takes about 3 months to make one million courses. 

The Taiwan government has said it is building up stockpiles of Tamiflu and aims to have enough to treat 4 percent of its 23 million people by mid-2006. The eventual goal is to have enough stock to cover 10 percent of the population. 

Tamiflu is not a cure for the flu, but it can lessen symptoms if taken shortly after they first appear. Researchers warned last week that they have seen signs the avian flu virus is becoming resistant to the drug. 

Sixty-one people in Asia are known to have been killed by the H5N1 virus. Experts fear it will mutate into a form that can pass easily from person to person, sparking a worldwide pandemic.