November 7, 2005

The OTC drug market in Israel is worth US$130mn per year and grew at an annual rate of 5% between 2000 and 2004, according to a recent study by Derby University's Israel branch. The sector is also forecast to grow by around 6% this year, as competition in the market intensifies and new government measures come into force. However, growth still remains significantly below levels in Europe, where the market in increasing 15% per year on average.

The report goes on to state that analgesics were the most commonly purchased OTC drugs in Israel, and that this trend was likely to continue for the foreseeable future. Also mentioned was the fact that pharmacists' recommendations continue to be the main factor in influencing purchases, but also that the role of advertising is becoming more important.

The Israeli government has been keen to support the OTC industry recently in order to help curb health expenditure. New regulations were introduced in early 2005 that allowed approximately 100 non-prescription drugs to be sold through mass-market and convenience stores.

The study concludes that these moves will most likely lead to the creation of new distribution lines and hundreds of new sales points. Opening the OTC drug market to non-pharmacy outlets, such as supermarkets, will also increase competition and result in lower prices. The OTC sector currently accounts for around 10% of the Israeli drug market, although this share is expect to almost double by 2009.