ISRAEL CLAIMS OTC PRICES SOARING

According to Israel's finance ministry, average prices for over-the-counter drugs have risen by as much as 40% since the sector's deregulation early last year. The reforms, which were approved in December 2004, legalised the sale of roughly 100 OTC drugs outside pharmacies for the first time. Analgesics, fever reducers and cough and cold treatments have seen the greatest rises, according to finance ministry studies.

However, a key aspect of the rises is that there remain significant differentials between prices in outlets such as supermarkets and those in pharmacies, mainly as pharmacy OTC prices are still controlled by the government. The finance ministry has announced plans to remove pharmacy OTC price controls, but pharmacists' groups have warned against such action. Israel's OTC spending is expected to reach US$400mn by 2009.