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Wednesday
Dec052018

Israel imposes strict compliance regs on pharmas, medical device makers

Any company marketing medicine or equipment to the Israeli healthcare system (hospitals and health patient funds) needs to meet new compliance-related regulations by setting internal procedures, training employees and third parties, and improving the allocation of marketing and R&D resources when carrying out business in Israel.   

Starting November 1, Israel adopted a tight regulatory regime governing the relations between pharmaceutical and medical devices companies on the one hand and the medical institutions and healthcare providers on the other, namely doctors and health professionals.

The regulation follows an investigative journalist’s TV story and a parliament discussion about corruption in the healthcare system.

The Israel Ministry of Health Director General, Moshe Bar Simantov, published a special circular that came into effect on November 1. This version of the circular updates a previous version issued in June 2018.

The circular regulates issues like receiving samples and drugs from pharmaceutical companies, the work of doctors for such companies, external financing of research, medical conferences in Israel and abroad, the activities of marketing representatives, and more.

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Among the main points of the circular are:  

- All commercial agreements of a hospital or medical institution with a commercial entity shall be subject to prior approval by a special management committee of such institution. This committee, in turn, is subject to supervision by a central engagements committee established by the Ministry of Health.

- Clinical trials may be funded by a pharmaceutical or medical devices company only under a designated budget that shall be forwarded to the hospital or performing institution and shall be allocated to the research upon the institution's professional criteria.        

- Participation of doctors in conferences organized and funded by commercial companies is permitted, provided that such conferences are scientific in essence and are not "marketing inclined."

- No "side jobs" for doctors with pharmaceutical companies are allowed if such jobs are directly related to the doctor's position in the medical institution or if the doctor might get into a conflict of interest as a result of such employment.

- Travel abroad of doctors and other healthcare employees can be funded by commercial companies but shall be subject to certain conditions; most interesting is the one directing that the travelling employee cannot be one having any influence on purchasing decisions of his medical institution.

- The work of marketing representatives will be regulated, and working as a representative will require an annual certificate issued by the medical institution based on the passing of a professional ethics exam. The syllabus for such exam has not yet been determined and therefore a grace period of three months from the publishing of the syllabus until coming into force of this requirement has been set.         

- It will be forbidden for marketing representatives to meet one-on-one with doctors. (This directive has sparked a heated debate between the doctors' association and the Ministry of Health; some doctors even called it "insulting" and "trust breaking." Following this controversy, an examination period of 12 months was set by the ministry, in which one-on-one meetings could take place in specially approved circumstances, and at the end of the period, the Ministry of Health shall determine how to approach the application of this directive.)

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The new directives, although not legislation "per se," signify a fundamental change in the marketing and sales arena in Israel for pharmaceutical companies and medical device makers.

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Asher Miller is a compliance expert and the founder of Miller Law, an Israeli law firm specializing in compliance and industry-government transactions. He can be contacted at mblaw@bezeqint.net