European Union (EU) officials have supported US calls for stronger Israeli patent rights. The Israeli Knesset is shortly expected to ratify an amendment that could favour Israeli generics companies, largely at research-based drugmakers' expense.

Under new laws recently introduced in Israel, data exclusivity is limited to five years with no grounds for extension - which observers say effectively curtails the exclusivity period by an average of two years. There is also a measure triggering exhaustion in Israel at the time of expiry in any "important" WTO member country.

As a result, observers believe local companies will be better able to launch a generic in a key market such as the US without reference to the Israeli patent.

The EU has described the Israeli position as "inconsistent" with the country's pledges to protect intellectual property. US and EU officials argue that local generics companies violate the rights of innovator drugmakers, amid signs that the EU may retaliate by blocking Israeli imports and its candidacy for the OECD.

However, the Israeli industry asserts that it is Europe's intellectual property laws that need modernising. A leading Israeli generics maker recently expressed disbelief that the EU attitude is "anti-generic," given cost pressures on the region's health systems.