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New Israeli Drugs List Shows Patent Loopholes

May 12, 2005

Israel's 2005 "basket" of drugs to be reimbursed by the National Health Insurance (NHI) system has highlighted awkward patent discrepancies on a number of newly included ethical products, reflecting the country's ambiguous intellectual property regime.

Because of political pressures, the government has placed a number of oncology drugs produced by multinationals, including sanofi-aventis, on the list. This is despite multinational firms' refusal to register the drugs locally, as this would undoubtedly prompt competition from cheaper generic versions. Current rules establish that reimbursable products must be registered, but it appears that healthcare institutions will now be able to seek reimbursement for high-cost, off-label drugs, which they already routinely use.

According to officials, oncology drugs account for roughly 35% of the NHI scheme's annual cost. However, it seems unlikely that even this year's total spending increase of NIS350mn (US$80.78mn) will be enough to cover the future cost of public sector treatment for cancers and conditions in other high-cost therapeutic segments.