PHP41 PARALLEL TRADE OF PHARMACEUTICALS AS A COST-CONTAINMENT MEASURE-ANALYSIS OF THE ISRAELI EXPERIENCE

The Israeli Law enabling parallel import of pharmaceuticals wasimplemented in January 2001. Prior to its legislation there wasonly one exclusive importer for each pharmaceutical product,imported directly from the manufacturer. Parallel import enablesthe importation of a given pharmaceutical to Israel by a numberof importers—not necessarily directly from the manufacturer,thus amplifying economic competition, which should result inlower acquisition price. OBJECTIVES:Our study examines theimpact of the law three years after its implementation, regard-ing the national expenditure on pharmaceuticals. METHODS:Since financial data is not available to the public, the study wasbased on qualitative data. A survey of senior management of theIsraeli health care system was conducted. A pool of 50 execu-tives was constructed, representing all relevant stakeholders.Each participant was interviewed face-to-face, using a uniformquestionnaire. RESULTS: The response rate was 68%, all sectorshad at least one representative. The preliminary analysis of theanswers shows that although during 3 years, only 22 drugs wereparallel imported, most of the responders answered that both the national expenditure and prices of pharmaceuticals werereduced. No damage was done to the publics’ health, and therewas no change in the number of newly approved pharmaceuti-cals. CONCLUSIONS: As a result of the Parallel Import legis-lation, combined with several other cost-containment reforms, areduction in the prices of pharmaceuticals is noticed. The factthat only 22 pharmaceuticals, and none during 2003, were actu-ally imported by parallel trade shows that the main reduction isattributed to lower prices established by the manufacturers them-selves, trying to avoid competition from parallel imports. Thus,the importance of the law lies not necessarily by carrying it out,but simply by the fact that it allows the major buyer