Israel could sit out Middle East drug boom

A boom in Middle Eastern pharmaceutical markets is imminent, although Israel may not be a beneficiary of the trend, a report released earlier this month suggested.

By SETH FREEDMAN
drugs 88 (photo credit: )
drugs 88
(photo credit: )
A boom in Middle Eastern pharmaceutical markets is imminent, although Israel may not be a beneficiary of the trend, a report released earlier this month suggested. Key drivers behind the expected growth surge, according to the study carried out by URCH Publishing, are a combination of liberalizing economic policies and the introduction of mass health insurance. The study suggests that due to the opening up of Middle Eastern markets to European Union and US imports and the implementation of cooperative health insurance in countries such as Saudi Arabia, the next five years could prove very profitable to companies investing in the region. "The Israeli market is more sophisticated than Arab markets, and can be seen as having already passed this 'modernization' stage," said the report's author, Jean-Michel Saliba. A second issue, Saliba noted, is the trade boycott of Israeli products by certain Arab countries. "Although in principle there is nothing stopping Israeli firms selling ... in the Saudi Kingdom, public opinion and the masses are not ready to bury the hatchet yet," Saliba said. Israel, he noted, continues to have a far larger per-capita drug consumption level than its regional neighbors, at $197 in 2002 compared with only $77 in the second placed United Arab Emirates, yet the growth rate in the Israeli pharmaceutical market is around 10 percent compared to 14% in Egypt. Saliba suggested that Petah Tikva-based Teva Pharmaceutical Industries Ltd., the world's largest generic drugmaker, was unlikely to concern itself with trying to penetrate Arab markets, since it "already has strong access and exposure in what is the most lucrative pharma market in the world (the US)." The author also cautioned that "multinationals must be wary of the inadequate level of intellectual property rights protection in the region." It is estimated that US pharmaceutical companies lose around $555 million, in the Middle East alone, due to lack of patent protection.