Israel OTC drug price debacle, as Minister says he may reinstate controls

For years, Israel's Ministry of Health has wanted to do away with pricecontrols on over-the-counter medicines, especially as importers, through some old legislative anomaly, were already exempt for a number of years.

The MoH had hesitated for one reason: it was worried that industry would up its prices in an unacceptable manner, reports the Marketletter's local correspondent. But after June 1 this year, when price controls on OTCs manufactured locally were also abolished, prices of nearly all such products jumped 30%-40% on average, with some leading products much more.

It is true that the drug industry in Israel has seen its prices (for prescription and OTC products) frozen since 1997 as the MoH wrestled with the industry over the implementation of new mechanisms of price control of prescription drugs (the "Holland" method of international price comparisons - see later). The result of this is that the new Finance Minister, Silvan Shalom, issued a statement that he intends to cancel the new legislation and reinstate price controls on OTC drugs. However, the MoH is apparently not keen for this to happen.