BMI's Executive Summary

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Israel's highly developed infrastructure ensures that the country's pharmaceutical market is one of the most advanced in the Middle East and Africa (MEA) in spite of its regional isolation. The market was estimated to be worth US$1.58bn in 2007 and should experience CAGR of 9.15% to reach a value of US$2.45bn by 2012. The highest per capita drug market expenditure in the region ensures that the country's pharmaceutical market punches above its weight despite a small population of around 7.3mn. It is ranked third in terms of size in the region, behind Turkey and South Africa.

Israel's regional isolation has not prevented its strong domestic manufacturing sector developing significant exports. Generics heavyweight Teva Pharmaceutical Industries is dominant and has carved out a significant presence in the US market – which is 15 times its home market in value terms. Meanwhile, India's Sun Pharmaceutical Industries proposed takeover of Taro Pharmaceutical Industries continues to rumble on, with some industry observers now suggesting that Sun may need to up its US$454mn offer to guarantee the deal's acceptance by Taro's shareholders.

There was some good news on the reimbursement front with the government setting out its three year spending plans to include funds specifically for new drugs – something that will go some way to countering claims by critics that the public health sector fails to update its reimbursement list to cover newly developed drugs. In terms of the approvals process, Plans have been unveiled to decentralise the approvals process for imported drugs and shift responsibility onto the hospital or dispenser concerned if the drug has already been cleared in the US or European Union (EU). Unfortunately, there have been no such developments in the area of intellectually property (IP) rights and Israel remained one of 12 countries on the USTR's 'Special 301 Report' Priority Watch List for 2007 and is likely to still be there throughout 2008.

BMI has overhauled its Business Environment Ratings methodology for Q108. In the new rankings table, Israel is placed equal fourth out of 14 Middle East and Africa markets surveyed. The new ratings system places a strong emphasis on the pharmaceutical market size, where Israel scores well. However, its market risk score is exceptionally low due to its failure to overhaul a weak IP system that continues to cause international concern and reimbursement system that continues to be slow in accepting new drugs.

The country has a strong R&D base and large pool of skilled scientists due to its world class university system. However, research-focused manufacturing is held back by its substandard IP environment. Should this be improved, it could provide a significant advantage to domestic manufacturers moving into novel research.

Contents

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Chapter 1 - Executive Summary

Israel Pharmaceuticals & Healthcare Industry SWOT

Israel Political SWOT

Israel Economics SWOT

Israel Business Environment SWOT

Chapter 2 - Israel: Business Environment Ranking

Table: Business Environment Ranking: Middle East & Africa

Business Environment Ranking

Chapter 3 - Market Summary

Chapter 4 - Regulatory Regime

Intellectual Property

Pricing & Reimbursement

Products expected to be included In Drug Basket, 2006-07

Chapter 5 - Industry Trends

Research And Development Sector

Table: Israel's R&D Law - Conditions For OCS Funding

Biotechnology Infrastructure

Private Sector

Indigenous Manufacturer Activity

Teva's Product Pipeline

Healthcare Sector

Chapter 6 - Industry Forecast Scenario

Overall Market Forecast

Table: Drug Market Trends 2005-2010

Key Growth Factors - Industry

Key Growth Factors - Macroeconomic

Table: Economic Activity

Prescription Market Forecast

Table: Prescription Market Headline Forecasts 2004-2010

Table: Prescription Market Forecasts By Therapeutic Segment

OTC Market Forecast

Table - OTC Market Forecasts 2005-2010

OTC Sector Forecasts by Therapeutic Segment

Generics Market Forecast

Table - Generics Market Forecasts 2005-2010

Import/Export Market Forecast

Table: Import/Export Market Data

Chapter 7 - Country Snapshot: Israel Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Competitive Landscape for Middle East & Africa Pharmaceuticals and Healthcare: Sample of Companies Ranked

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Cross-border analysis of regulatory systems comparing the patenting environment, summarising regional pricing and reimbursement factors and monitoring the growth of the Pharmaceuticals sector across the region. Company SWOTs cover leading multinational and national drug companies operating in each market.

Network of Middle Eastern and African Pharmaceutical & Healthcare Sources

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BMI's Middle Eastern & African Pharmaceutical & Healthcare Reports are based on an extensive network of multilateral organisations, government departments, pharmaceutical & healthcare industry associations, chambers of commerce and company reports. Information sources include: