Israel Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, September 2011, Pages: 99
Business Monitor International's Israel Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Israel's pharmaceuticals and healthcare industry.
BMI View: Both regionally and globally speaking, Israel boasts high per-capita spending on pharmaceuticals, although the overall market size is limited by the country’s modest population of under 8mn. Israel also has well-developed pharmaceutical (focused on generic drugs) and medical device manufacturing industries, which largely export to Europe and North American markets rather than to its neighbours, due to political considerations. However, multinationals operating in Israel have been critical of the country’s intellectual property (IP) environment, with Israel now reinstated on the Pharmaceutical Research and Manufacturers of America (PhRMA)’s Special 301 submission’s Priority Watch List for 2011.
Headline Expenditure Projections
- Pharmaceuticals: ILS6.72bn (US$1.80bn) in 2010 to ILS6.99bn (US$2.07bn) in 2011; +4.1% in local currency terms and +15.0% in US dollar terms.
- Healthcare: ILS59.77bn (US$16.01bn) in 2010 to ILS62.12bn (US$18.38bn) in 2011; +3.9% in local currency terms and +14.8% in US dollar terms.
- Medical devices: ILS3.66bn (US$980mn) in 2010 to ILS3.84bn (US$1.14bn) in 2011; +4.9% in local currency terms and +15.9% in US dollar terms.
Business Environment Rating: Israel ranks third of the 19 key markets surveyed within our proprietary Q411 Business Environment Rating (BER) matrix for the Middle East and Africa (MEA). Its composite score for the quarter is 57.8 out of the maximum 100. The country’s Risks score of 48 stands just above the regional average of 47, dragged down by the shortcomings of its regulatory environment and its stance towards intellectual property (IP) protection. Its rewards score is fifteen points higher than the regional average for the quarter (49), supported by a high urban population component and high per capita spending on medicines.
Key Trends & Developments
- In Q211, despite spending US$5.2bn on mergers and acquisitions (M&A) in 2010, leading Israeli drugmaker Teva Pharmaceuticals only reported an 11% increase in year-on-year (y-o-y) net sales to US$4.21bn and a 27.8% fall in net income over the same time period to US$576mn. Teva's Q211 results are unimpressive but expected given the company's poor Q111 performance. However, BMI remains positive about the company's long-term future as austerity measures and rational prescriptions increase generic drugs sales in developed states and the company's revenues from Europe continue to grow rapidly.
- In July 2011, shareholders of US-based biopharmaceutical company Cephalon approved Teva’s US$6.8bn proposed acquisition. The deal will add Cephalon's cancer painkiller Fentora(fentanyl buccal), sleep disorder drug Provigil (modafinil) and chemotherapy drug Treanda (bendamustine) to Teva's branded business. The deal, under review by the European Commission and the US Federal Trade Commission, is likely to be completed by end-2011. Teva has also completed the acquisition of Taiyo Pharmaceutical Industry in a US$943mn deal.
BMI Economic View: Economic activity in Israel will decelerate slightly through the end of 2011, and we project real GDP growth of 4.8% and 4.5% in 2011 and 2012 respectively, up from 3.8% and 3.3% previously. Private consumption and exports will lead the expansion, with government expenditure and fixed capital investment expanding at a slower pace. BMI caution that elevated political risk poses downside risks to their forecasts.
BMI Political View: Israel's new coalition government has become more conservative in its domestic policy stance and more hawkish in its foreign policy position, as we had anticipated. BMI believe conservative governments are likely to remain in power over the medium-to-long term, as support for these parties is widespread and is likely to grow. BMIs short-term political risk rating is 66.3 out of 100.0.
Executive Summary
SWOT Analysis
Israel Pharmaceuticals And Healthcare Industry SWOT
Israel Political SWOT
Israel Economic SWOT
Israel Business Environment SWOT
Pharmaceutical Business Environment Ratings
Table: Middle East and Africa – Regional Pharmaceuticals Business Environment Ratings For Q411
Rewards
Risks
Israel – Market Summary
Regulatory Regime
Intellectual Property
Shortcomings of the IP Environment
Counterfeit Drugs
Pricing System
Table: Price Build-Up in the Israeli Pharmaceutical Market
Price Cuts
Reimbursement System
Recent Reimbursement Developments
Reimbursement Funding
Industry Trends and Developments
Epidemiology
Communicable Diseases
Healthcare Sector
Healthcare Insurance
Recent Healthcare Coverage Developments
Healthcare Financing
Research and Development Sector
Table: Israel’s R&D Law – Conditions For OCS Funding
Clinical Trials
Biotechnology
Recent Biotechnology Developments
Private Sector Research and Development
Medical Device Industry
Recent Medical Device Company Developments
Industry Forecast Scenario
Overall Market Forecast
Table: Pharmaceutical Sales Indicators 2007-2015
Key Growth Factors – Industry
Table: Healthcare Expenditure Indicators 2007-2015
Table: Government Healthcare Expenditure Indicators 2007-2015
Table: Private Healthcare Expenditure Indicators 2007-2015
Key Growth Factors – Macroeconomic
Table: Israel – Economic Activity, 2007-2015
Prescription Market Forecast
Table: Prescription Drug Sales Indicators 2007-2015
Patented Drug Market Forecast
Table: Patented Drug Market Indicators 2007-2015
Generic Drug Market Forecast
Table: Generic Drug Sales Indicators 2007-2015
OTC Medicine Market Forecast
Table: OTC Medicine Sales Indicators 2007-2015
Medical Device Market Forecast
Table: Medical Devices Sales Indicators 2007-2015
Pharmaceutical Trade Forecast
Table: Exports and Imports Indicators 2007-2015
Other Healthcare Data Forecasts
Key Risks To BMI’s Forecast Scenario
Competitive Landscape
Pharmaceutical Industry
Domestic Pharmaceutical Industry
Table: A Selection Of Teva's Aquisitions
Foreign Pharmaceutical Industry
Recent Pharmaceutical Industry Developments
Company Profiles
Indigenous Manufacturer Profiles
Teva Pharmaceutical Industries
Taro
Perrigo (Agis Industries)
Dexcel
Neopharm Group
Trima
Rekah
Multinationals
Pfizer
GlaxoSmithKline
Novartis
Sanofi
Merck & Co
Country Snapshot: Israel Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012
Glossary
BMI Methodology
How We Generate Our Pharmaceutical Industry Forecasts
Pharmaceuticals Business Environment Ratings
Risk/Reward Ratings Methodology
Ratings Overview
Table: Pharmaceutical Business Environment Indicators
Weighting
Table: Weighting Of Components
Sources
- Indigenous Manufacturer Profiles
- Teva Pharmaceutical Industries
- Taro
- Perrigo (Agis Industries)
- Dexcel
- Neopharm Group
- Trima
- Rekah
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