BMI View: Israel will continue to be targeted by multinational drugmakers as a destination for innovative drug sales; however, their relative success will be limited by funding constraints towards the country's health services basket and the lack of transparency with new drug inclusions. An uptick in economic growth and an increase to government funding supports our moderate growth outlook for Israel's pharmaceuticals and healthcare sectors over the coming years.
Headline Expenditure Projections
Pharmaceuticals: ILS7.82bn (USD2.01bn) in 2015 to ILS8.14bn (USD2.10bn) in 2016; +4.1% in local currency terms and +4.4% in US dollar terms. Forecast in line with Q 2 1 6 .
Healthcare: ILS89.56bn (USD23.05bn) in 2015 to ILS94.53bn (USD24.42bn) in 2016; +5.6% in local currency terms and +5.9% in US dollar terms. Forecast upgraded from Q 2 16 .
|f = BMI forecast. Source: National Sources, BMI|
|Pharmaceutical sales, USDbn||2.100||2.010||2.100||2.230||2.410||2.500||2.590|
|Pharmaceutical sales, % of GDP||0.69||0.68||0.69||0.68||0.66||0.64||0.63|
|Pharmaceutical sales, % of health expenditure||8.8||8.7||8.6||8.5||8.3||8.2||8.0|
|Health spending, USDbn||23.760||23.050||24.420||26.230||28.860||30.560||32.450|
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. Although intellectual property (IP) laws are currently being made more robust, we highlight long drug approval times as a hindrance to multinational drugmakers' ability to maximise their returns in the market. In our Pharmaceutical Risk/Reward Index (RRI) for Q316, the country scores 55.0 out of 100. This makes it the fourth most attractive market for pharmaceutical investment in the Middle East and Africa (MEA), behind the United Arab Emirates (61.1), Saudi Arabia (60.4) and Kuwait (59.3), out of 31 countries analysed.
In May 2016, the Yissum Research Development Company of the Hebrew University of Jerusalem signed an exclusive worldwide licensing and research agreement with BioTheryX for the development and commercialisation of drug candidates representing a first-in-class therapy for haematologic and solid malignancies.
In February 2016, Health Minister Yaakov Litzman advanced the idea of implementing a personal smartcard that would contain all of patients' personal medical information while protecting their privacy and rights for use at hospitals and community clinics.
BMI Economic View
Israel's economic activity will be affected by weaknesses in the exports sector amid a slowdown in global trade, adverse foreign exchange movements and industry-specific difficulties. A strong private consumption outlook will not be sufficient to generate a significant growth acceleration in 2016. We have revised down our growth forecast for 2016 to 2.7%, down from 3.0% previously, marking an only modest acceleration from 2015, when growth came in at 2.5%.
BMI Political View
Right-wing party Yisrael Beitenu joining the coalition government will strengthen the government's majority, increasing its chances of completing its term. Greater support for settlements within the new government will fuel Palestinian grievances, and result in further isolation of Israel on the international stage.
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.