Israel Pricing Structures Further Cause for Multinational Concern

With the issues of patent protection and international co-operation already severe causes of friction between the Israeli government and the multinational drugmakers, pricing structures have also attracted heavy criticism in recent years.

In mid-2001, Israel introduced new pricing regulations, the most prominent feature of which was to impose the so-called "Dutch" pricing model. In effect, the system bases prices on the average drug costs in the UK, France, Germany and Belgium, but imposes a 1.5% surcharge on imports.

Naturally, the multinational sector was quick to condemn the structure as discriminatory, but a court challenge to the long-delayed structure failed. Meanwhile, now that the latest batch of patent regulations has effectively preserved favourable conditions for Israel's flourishing generics industry, international attention is now likely to turn to other contentious issues. With serious problems reported on parallel trade legislation and data confidentiality, criticism of the Israeli drug sector's legal and financial environment is unlikely to fall silent in the near term.