Israeli Drug Industry Cites Heavy Cost of Patent Reform

Local industry sources have criticised the approval of intellectual property reforms by the Israeli legislature's finance committee. The new measures, included as a rider to this year's national budget, are a mixture of initiatives designed to accommodate both US and European negotiators and local firms. The package includes five-year exclusivity for ethical drugs upon approval in Israel, alongside provisions allowing exports of "generic" drugs during the exclusivity period.

Unsurprisingly, criticism from the local sector has been led by Israel-based generics maker Teva, which claims that the measures will delay the entry of generic drugs, potentially costing the country's beleaguered healthcare system an extra ILS300mn (US$68.64mn) per year. Meanwhile, government officials have estimated the likely cost at a little over half this figure, although this reportedly accounts for over 50% of total spending on state healthcare provision.

In the meantime, the new measures are unlikely to please either foreign negotiators or the local industry fully, as the apparently costly compromise package falls well below US or European patent standards. Multinational sector hopes that the reform process would lead to a scaling down of Israel's sizeable generics export industry, which depends on lax intellectual property standards, will not be raised again until the next round of strident negotiations begins.