A new regulatory pathway allows Israeli health management organizations to import and supply to patients unregistered pharmaceuticals during the years 2024 and 2025

A new regulatory scheme for pharmaceuticals was established in Israel. The scheme establishes a new regulatory pathway of temporary approvals for the importation and supply of pharmaceuticals during the time of the pendency of the marketing authorization applications. It also grants the HMOs the power to prioritize and affect the decision of which pharmaceuticals will benefit from this scheme.

In Israel, the importation and supply of pharmaceuticals – whether innovative, generic, or biosimilar – requires that such pharmaceuticals be first registered with the Ministry of Health.

However, as with every rule, this rule, too, has exceptions. Rule 29 of the applicable regulations allows the importation and supply of unregistered pharmaceuticals in certain limited situations, such as compassionate use, personal use, and the like.

Recently, however, the Ministry of Health published a new scheme for the years 2024 and 2025, which would see up to ten unregistered pharmaceuticals being imported to and supplied to patients in Israel on what could be an unprecedentedly large scale.

Salient provisions of the new scheme

Under the new scheme, Israel’s four health maintenance organizations (HMOs) – formerly known as sick funds – may ask the Ministry of Health to allow them to import and supply generic and biosimilar pharmaceuticals, for which there is already pending an application for registration application by the applicant for marketing authorization, despite those not having been registered in Israel.

Conditions for submission of a pharmaceutical by the HMO

To obtain permission to import and supply a non-registered pharmaceutical, the HMO would need to show the following in respect of any of the pharmaceuticals that are the subject of their application:

(1) the pharmaceutical in question was submitted as generic or biosimilar to an original pharmaceutical registered in Israel;

(2) there are up to two pharmaceuticals containing the same API that are marketed in Israel;

(3) the pharmaceutical was registered during the last three years, and is being marketed, in the following countries: EU member states (EMA, mutual recognition procedure, decentralized), the United States (FDA), Switzerland (SMC), Canada (HC), Australia (TGA) and the UK (MHRA);

(4) the pharmaceutical was not rejected by, or withdrawn from, the regulatory agency in any of the U.S., Canada, the EU, Switzerland, Norway, Iceland, Australia, New Zealand, Japan, and the UK; and

(5) No exceptional reports of side effects have been made with respect to the pharmaceutical in question, and the safety profile thereof is similar to the original pharmaceutical registered in Israel.

Procedure and additional provisions

1. This scheme will apply during the years 2024 and 2025;
2. Applications are to be filed by the HMOs until 1st of July of each year;
3. The HMO would need to provide their reasoning for seeking permission to import the unregistered pharmaceutical/s, including the clinical justification of making the pharmaceutical/s more accessible and the estimated cost savings and the contribution of such to make care more accessible for their patients;
4. Applications must include a statement by the applicant for the registration (the generic/biosimilar manufacturer or their subsidiary or distributor) that the registration file in Israel contains all information provided to the regulatory agencies abroad and that the marketing of the pharmaceutical in Israel would not run afoul of the provisions of the Patents Law during the year in which the application was filed;
5. Up to ten pharmaceuticals will be approved each year;
6. Each HMO is guaranteed to have its first two priorities allowed, with additional permissions to be granted subject to availability;
7. A permit granted as a result of an application by a particular HMO would allow all HMOs to import and supply that pharmaceutical;
8. The MoH must approve the application for permission within 45 business days unless it finds that the application does not comply with the conditions of this scheme or that it identified an issue of quality, safety, or efficacy;
9. The permit will be limited to a consumption period of one year;
10. Importation would only be made from batches marketed in a territory in which the pharmaceutical is registered (there are no quantitative qualifiers on how much of any given batch should be allotted to Israel);
11. The HMO must conduct rigorous surveillance for side effects for any pharmaceutical approved for importation and supply under the scheme and
12. Finally, the scheme vaguely provides that the estimated cost savings would be directed to make essential pharmaceuticals and treatments more accessible in coordination with the MoH.

Comments and points to consider

Essentially, the new scheme establishes a regulatory pathway of temporary approvals for the importation and supply of pharmaceuticals during the pendency of the marketing authorization applications for all HMOs at once. This is a departure from previous schemes, which required separate applications by each HMO looking to import and supply unregistered pharmaceuticals to its patients.

In addition, the new scheme grants the HMOs the power to prioritize and affect the decision of which pharmaceuticals will benefit from this scheme without levying any transparency duties or otherwise providing safeguards with respect to the integrity of the HMOs’ choices.

Effectively, the scheme favors generic companies that have (or have access to) manufacturing facilities outside of Israel. This is because the scheme only applies to imported pharmaceuticals that are supplied from the same batch that is marketed in their respective foreign country.

As noted above, the importation and supply application must include a certification by the registration applicant that the pharmaceutical is not barred under the Patents Law from being imported to Israel during the importation period concerned. This seems to exclude launches at risk from the scope of the pathway. However, it is not clear what the legal standard to be met is, and it is further unclear what the repercussions of an erroneous certification would be and what recourse, if any, patent holders whose rights were infringed would have.

It is also unclear whether granting permission to import and supply unregistered pharmaceuticals at such a scale – that is, by all HMOs at once – is fully within the powers granted to the MoH’s Director General, who is bound by the statutory framework that conditions the widespread importation and supply of pharmaceuticals on them being registered in Israel. It is also unclear whether a pharmaceutical would indeed need to be both registered and marketed in the six territories mentioned in the scheme to obtain permission to import it; while the language does point to it being the case, and even though additional scrutiny does make sense where the pharmaceuticals are not registered, it is somewhat different in scope than the requirements in similar cases. If this requirement is interpreted as “one or more”, that could mean that the new scheme would mean the circumvention of the Israeli marketing exclusivity arrangement, thus constituting an injury to the property of the innovative company.

In summary, the scheme grants HMOs almost unfettered power to advance their business plans over both generic and innovative companies, who will have to wait even longer for their pharmaceuticals to be registered. This will adversely affect the Israeli public, who will have to wait even longer for new life-saving pharmaceuticals to be registered, as well as the innovative companies, whose patents’ effective terms will be further shortened due to the delay in registering their pharmaceuticals. It appears that it would have been more beneficial to shorten the pendency of marketing authorization applications rather than granting authorizations to market and supply unregistered pharmaceuticals.