Snapshot: medicine and medical device pricing in Israel

Pricing and Reimbursement

Price regulation

To what extent is the market price of a medical product or medical device governed by law or regulation?

The Supervision of Prices of Goods and Services Act 1996 (the Supervision Act) authorizes the Ministers of Health and Finance to regulate the prices of services and products by issuing a relevant order.

The Order for the Supervision of Prices of Commodities and Services (Application of Law on Preparations) 2001 and its amendments specify three means of price regulation that are applied in the field of preparations:

  • Price-fixing by the regulator with regard to prescription preparations. The order for the supervision of prices of products and services (maximum prices for prescription preparations) 2001 outlines the pricing method by referencing prices of several European countries, in terms of which the maximum price will be calculated as an average of the three lowest prices fixed in seven corresponding countries (Belgium, Hungary, Spain, France, the United Kingdom, Germany and the Netherlands) or, if there is no corresponding price in three of the countries, an average of one or two of the relevant countries (if no referencing Prices are available, then the preparations will be subject to supervision according to chapter F of the supervision law, which allows for increases in prices, subject to the Ministry of Health (MOH) prior approval). In case of concern that the marketing of a preparation in Israel will stop, the price of the preparation may be increased to facilitate its continued marketing. In this context, it should be noted that, apart from some exceptions, generic products (as well as the corresponding branded products), will be subject to less strict supervision, according to chapter F of the supervision law;
  • The submission of an application before increasing prices above the fixed price in regard to over-the-counter preparations; And
  • The reporting of prices and profits with regard to general sale list preparations.
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Negotiations between manufacturers and providers

Must pharmaceutical and medical device manufacturers negotiate the prices of their products with public healthcare providers?

It is not mandatory for manufacturers to negotiate the prices of their products with public healthcare providers, but in practice they do.

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Reimbursement

In what circumstances will the national health insurance system reimburse the cost of medicine?

Many prescribed medicines are included in the health basket provided by the sick money and, thus, members will pay only the deductible price. In some cases, it may be possible to obtain funding for medicines that are not included in the health basket, either through a supplementary or private insurance plan (if purchased) or by submitting a petition to the relevant sick fund’s exceptions committee requesting such assistance .

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Price Adjudication

If applicable, what is the competent body for decisions on the pricing and reimbursement of medical products?

Policy decisions on the pricing and reimbursement of medical products are made annually by the MOH, based on the recommendations of the Public Committee. The enforcement of the policy can be done through administrative tribunals and the civil court system.

Discount

Are manufacturers or distributors of medical products statutorily obliged to give a rebate to health insurance schemes or third parties?

Manufacturers or distributors are not statutorily obliged to give a discount to health insurance schemes or third parties, but in practice these discounts are often given.

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