Abstract
In BMI’s updated Business Environment Rankings (BER) for Q309, Israel
continued slipping down the
table, now ranking seventh out of the 17
Middle East and African (MEA) markets surveyed. While the
country scores
strongly across the country structure and the country risk categories, a risky
regulatory
environment, particularly in regard to intellectual provisions
(IP) provisions, serves to limit Israel’s
overall attractiveness for
multinational drugmakers. Moreover, although Israel’s IP environment has
been
criticised for deteriorating in the past decade, the country seems to
have no plans to improve the situation,
which will continue to weigh down
on Israel’s placement within BMI’s MEA matrix.
In the
meantime, Israel once again featured in the ‘Priority Watch List’
of countries with deficient IP
regimes, which is produced as part of the
2009 version of the Special 301 Submission by the
Pharmaceutical Research
and Manufacturers of America (PhRMA). Key points of contention include the
lack of adequate patent and data exclusivity protection and regulatory
approval delays. While the latter
has been addressed to a degree,
insufficient budgetary support remains a major obstacle to establishing a
better system for processing marketing applications, which will continue to be
biased against foreignmade
patented drugs.
In addition to the IP
issues that stifle the development of the innovative patented market segment,
the
economic situation (such as the forecast 1.8% GDP contraction in 2009)
and political environment will
conspire to result in a slow growth of the
Israeli pharmaceutical market over the next five years. From the
2008
market value of ISL5.46bn (US$1.53bn) at retail prices, the market will grow
to just ILS5.98bn
(US$1.57bn) in 2013, posting a compound annual growth
rate (CAGR) of just 1.83% in local currency
terms (and of just 0.62% in US
dollar terms). Per capita spending on drugs will, however, stagnate at
around US$207 estimated in 2008, as cost-containment negates any volume
increases. An increasing
reliance on imports of non-patented medicines
will also subdue growth as the government seeks to cut
healthcare costs.
While prescription medicines will continue to account for the majority of the
market by
value, economic recovery will once again boost the uptake of
OTCs, especially in the face of a restrictive
pricing and reimbursement
environment.
In the meantime, Israeli healthcare coverage continues to be
criticised by international bodies. In March
2009, the Physicians for
Human Rights (PHR) group called for amendments to the state policy
prohibiting children who are not currently under permanent residential status
access to healthcare. Despite
the fact that Israeli legislation stipulates
a basic healthcare package for foreign workers, children continue
to be
excluded from the system due to inconsistent and unrealistic criteria that
need to be met in order to
qualify for the health coverage. Disallowing
coverage to those with a Palestinian parent also highlights a
degree of
prevailing intolerance with no sound basis, which will continue to draw
international criticism
and influence Israel’s attractiveness as a
business destination.
| 
View Cart
