Israel's Agis, Teva View Govt P-I Moves

Agis, Israel's second-largest drug group and one of the leading importers, believes the extent of its activities which could be impacted by the government's proposed introduction of parallel imports (Marketletter March 18) would be around NIS85 million ($27.2 million), or 17% of 1995 turnover. While competition from parallel imports could reduce its gross margins, it could also allow it to extend its range of products, says Agis, which imports 160 branded drug products in about 300 dosage forms.

Agis Group deputy managing director Benny Mandel believes the impact of parallel imports would be relatively mild. Agis has one of Israel's strongest distribution and marketing capabilities, allowing it to raise its turnover through sales of products which it has not marketed up till now. Mr Mandel said overall gross profit on drug import sales is 30%, although individual product profits vary widely.

Some analysts feel these imports will have only limited impact on Israel's sizeable institutional market, as the overall price level there is already low. This is particularly true of the General Sick Fund, which has on occasion been a parallel importer itself. Imports probably account for under half the private market, which itself represents less than 40% of the total market.