In a move that has been widely regarded as a setback for the multinational sector, an Israeli parliamentary committee has approved a measure easing development of generics during patent terms on original drugs. The so-called data exclusivity bill should now reach a full parliamentary vote next week.

The bill enshrines the "Teva Amendment" of 1988, which allowed Israeli generics makers to export their versions of patented drugs during the original drug's period of protection. However, one positive aspect for research-based firms is that five-year patent extensions will become a possibility under the new law.

Significantly, an earlier clause ending drug patents upon expiry in an "important" member of the WTO has now been amended. This list of countries is now confined to 21 WTO members, which include most regulated markets.

Nevertheless, it is clear that the spirit of the original bill has been preserved, and will continue to allow Israeli generics makers their most important strategic asset - timely delivery of a generic immediately upon expiry of the patent on an original drug. The US and European Union (EU) had considered retaliatory action against Israel if the bill were passed, but it remains to been what action will be taken.