Pricing and reimbursement

Price regulation

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

The Supervision of Prices of Commodities and Services Law 1996 (the Supervision Law) authorises 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 from 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 those 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’s (MOH) prior approval). In the case of concern arising 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, save for several exceptions, generic products (as well as the corresponding branded products), will be subject to less stringent supervision, according to Chapter F of the Supervision Law;
  • the submission of an application prior to increasing prices above the fixed price with regard to over-the-counter preparations; and
  • the reporting of prices and profits with regard to General Sale List preparations.
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 so.

Reimbursement

In which circumstances will the national health insurance system reimburse the cost of medicines?

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

Price adjudication

If applicable, what is the competent body for decisions regarding the pricing and reimbursability of medicinal products?

Policy decisions regarding the pricing and reimbursability of medicinal products are undertaken annually by the MOH, based on the recommendations of the Public Committee. The enforcement of the policy can be done by administrative tribunals and the civil court system.

Discount

Are manufacturers or distributors of medicinal products statutorily obliged to give a discount 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.