BMI View: Our moderate growth outlook for Israel's pharmaceutical sector is supported by the same modest increase in funding for the health services basket. The health basket does include innovative treatments, although drugmakers will see opportunities limited by budgetary restraints. However, proposed changes to the health insurance law will expand healthcare access, providing pharmaceutical companies with further commercial opportunities.
Headline Expenditure Projections
Pharmaceuticals: ILS7.51bn (USD2.10bn) in 2014 to ILS7.82bn (USD2.01bn) in 2015; +4.2% in local currency terms and -4.4% in US dollar terms. Forecast unchanged from Q 4 15.
Healthcare: ILS80.67bn (USD22.55bn) in 2014 to ILS85.80bn (USD22.00bn) in 2015; +6.4% in local currency terms and -2.4% in US dollar terms. Forecast unchanged from Q 4 15.
|f = BMI forecast. Source: National Sources, BMI|
|Pharmaceutical sales, USDbn||2.024||2.099||2.006||2.175||2.330||2.429||2.528|
|Pharmaceutical sales, % of GDP||0.70||0.69||0.70||0.71||0.70||0.69||0.67|
|Pharmaceutical sales, % of health expenditure||9.6||9.3||9.1||8.9||8.7||8.5||8.3|
|Health spending, USDbn||21.036||22.547||22.001||24.362||26.672||28.443||30.348|
Ri sk/Reward Index
The Israeli pharmaceutical sector boasts a number of key qualities. These include a largely urbanised population and a significant pensionable proportion. However, we highlight weak intellectual property laws and long drug approval times as severe hindrances to multinational drugmakers maximising their returns in the market. In BMI's Pharmaceutical Risk/Reward Index for Q116, the country scores 54.8 out of 100. This makes it the fifth most attractive market for pharmaceutical investment in the Middle East and Africa out of 31 countries analysed.
It was reported in November 2015 that government hospitals in Israel generated USD61mn in medical tourism revenue in 2014 - down a quarter from 2013. Medical tourism in Israel has been on a downtrend due to the depreciation of the Ruble, which has made treatment in Israel less affordable for Russians and Ukrainians.
In November 2015, the Ministerial Committee for Legislation rejected a proposed bill that would eliminate VAT on pharmaceutical products.
It was announced in October 2015 that Israel's health services basket will expand by ILS300mn (USD76.7mn) in 2016. However, this is below the amount recommended by many public health experts.
BMI Economic View
Israeli growth will accelerate over the coming quarters, as public spending returns to higher levels, and as exports and private consumption fall back in line following lower than expected growth in Q215. Overall, the Israeli economy will expand by 2.6% in 2015 and 3.4% in 2016, faster than most developed peers.
BMI Political View
Israel will not launch a military strike against Iran's nuclear facilities over the coming months, given that such a move would create a deep diplomatic crisis with Israel's main economic and military allies and that political forces within the country are divided on the issue. Instead, the Israeli government will attempt to influence the US Congress so that the latter rejects the deal, while at the same time securing stronger US military assistance.
The Israel Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Israel Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Israel pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Israel, to test other views - a key input for successful budgeting and strategic business planning in the Israeli pharmaceutical and healthcare market.
- Target business opportunities and risks in the Israeli pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Israel.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.