Executive Summary
Market Entry
Current Market Trends
Best Prospects
Market Size
Main Competitors
Current Demand
Registration Process
Regulations
Reimbursement
Barriers
Procurement & Tenders
Government Links
U.S. Commercial Service Contact Information
Tab Options
Executive Summary
Market Entry
Current Market Trends
Best Prospects
Market Size
Main Competitors
Current Demand
Registration Process
Regulations
Reimbursement
Barriers
Procurement & Tenders
Government Links
U.S. Commercial Service Contact Information
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Executive Summary
Israel’s public healthcare system is well-advanced by international standards, but it still falls behind other Western countries in the number of hospital beds, doctors and nurses and public spending ratio. In 2020, due to Covid-19, Israel spent 8.5% of its GDP on healthcare, an increase compared to past expenditures, but still less than the OECD average of 9.7%. Israel is providing universal coverage to the entire population via four independent health management organizations and a network of hospitals, community clinics, and specialized doctors. Israeli healthcare facilities are modern and are open to adopt new, cost-effective, technologies and procedures. Many Israeli doctors receive training in the United States and maintain personal and professional relationships with U.S. colleagues at major medical centers. Israel’s healthcare policy makers have been focusing on promoting healthy nutrition and lifestyle choices, preventive medicine, and screening.
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Market Entry
Under the U.S.-Israel Free Trade Agreement (FTA), American goods face no import duties upon entering Israel’s market. Proper shipping documents and an Invoice Declaration are required in order to benefit from the FTA. Every product is still subject to 17% Value-Added-Tax (VAT). VAT is levied on the Cost, Insurance and Freight (CIF) landed cost.
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Current Market Trends
Local and International Competition
Israel is a sophisticated and mature market. U.S. suppliers face intense competition and should therefore be ready to compete and support their local distributors through educational presentations, material, and lobbying/advocacy. Major multinationals and large companies have established direct sales and marketing offices in Israel. Other exporters operate through local distributors. There are hundreds of medical distributors that are well-established throughout the country.
Hospital care to Homecare
As of 2018, the Ministry of Health (MoH) is working to implement new procedures and expand the shift from hospital care to homecare. The MoH also continues to improve the national patient medical record system, both for the benefit of the patient and for clinical research purposes.
Digital Health
There is a well-developed infrastructure and high-tech industry that offers innovative tools and applications. The Ministry of Health and Digital Israel are leading a national program that aims to harness and leverage the opportunity inherent in the digital revolution and progress of information and communication technologies. In 2021, the Digital Health sector raised a record $1.9B and innovation labs are spearheading the adoption of AI technologies and computational science to solve therapeutic challenges.
Aging Population
The aging population creates multiple challenges for Israeli society. The need to cope with the steadily increasing number of elderly people with dementia is one of Israel’s healthcare system major challenges. The Ministry of Health developed a national strategic plan to address Alzheimer’s and other types of dementia and age-related chronic diseases. The plan offers a holistic perspective and emphasizes collaboration among all relevant agencies: government ministries, the health plans, and other organizations. The Strategic Plan aspires to cope with key issues that make it difficult for the current service system to provide an appropriate response to the unique needs of elderly patients.
Increasing Private Health Spending
The proportion of private financing in national health spending in Israel (28.8% in 2020), on top of the health tax (21.4% in 2020), continues to rise. According to the Israel Central Bureau of Statistics, the proportion of private spending is 50.2%, making it one of the highest rates in the Organization for Economic Cooperation and Development (OECD). The trend is clear and consistent, resulting from an erosion of the public healthcare system’s resources. Private spending is composed of payments for dentistry (most dentistry in Israel is not included in the state health basket), supplementary and commercial health insurance, private care, purchases of medications, deductible payments and purchases of medical equipment.
Up until the pandemic, the rate of public spending has not changed since 1995. The government refrains from increasing the health system’s financial resources, despite population growth and technological requirements. However, the average waiting periods for MRI’s or CT exams in the remote locations have encouraged the Israeli government to amend a Public Health Ordinance that will enable an allocation of funds from the Ministry of Finance to the Ministry of Health to purchase advanced medical devices to be dispersed to remote parts of the country to shorten waiting periods for these scans/treatments.
It is important to note that recent political instability and the upcoming elections (fifth in two years) will affect the timeline of the process; however, health and government officials have set the goal of greater accessibility to medical devices as a top priority.
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Best Prospects
Point of care monitoring and diagnostics - Israel has a growing elderly population and limited resources. As a result, the most significant demand is for cost-saving products and for products that help patients monitor their health at home. Awareness for preventive medicine and acceptance of diagnostic procedures into the reimbursement list opened the market to advanced diagnostic procedures. This shift includes early detection of breast and colon cancer and a set of standard, age-based diagnostic procedures.
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Trade Data
Israel’s Healthcare Technologies import from the U.S. ($ thousands)
2017
2018
2019
2020
2021
Pharmaceuticals
107,935
92,844
106,265
190,008
167,829
MedTech
219,972
216,891
204,953
231,826
230,105
Total
327,907
309,735
311,218
421,834
397,934
The Israeli health and life sciences ecosystem is home to some 1,500 companies. Nearly 60% of these are medical devices firms, with the balance roughly split between pharmaceutical and digital health companies.
The industry is characterized by strong cooperation between industry and academia, a thriving start-up culture, substantial private investment in research and development and an interest in international cooperation.
Partnership opportunities exist for U.S. companies in a variety of areas, including digital health (including artificial intelligence), neuroscience, and complementing medical device technology.
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Main Competitors
Israel is a sophisticated and mature market. U.S. suppliers face intense competition and should therefore be ready to compete and support their local distributors through educational presentations, material, and lobbying/advocacy. Major multinationals and large companies have established direct sales and marketing offices in Israel. Other exporters operate through local distributors. There are hundreds of medical distributors that are well-established throughout the country.
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Current Demand
Israel has a growing elderly population and limited resources. As a result, the demand is for cost-saving products and for products that help patients monitor their health at home. Wound care, advanced diagnostics, and minimal invasive procedures continue to be a high priority in the public healthcare market. In addition, a well-developed private health sector in the areas of dental, eye laser surgery, and plastic/aesthetic surgery keep up the demand for advanced medical instruments and appliances. Israel has an excellent digital health tech base and is a world leader in mobile and E-health implementations. Opportunities exist, however, in further advancing drug monitoring and disease surveillance. Other best sales prospects include minimally invasive surgical instruments and technologies that are integrated with imaging capabilities, cardiology equipment, equipment and supplies for plastic surgery, smart implants, dental instruments, equipment and technologies for pain management, physiotherapy, ozone and oxygen therapy, OR equipment and cost-saving single use products, point of care diagnostic kits, and wound management technologies.
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Registration Process
The MoH has an overarching regulatory and policymaking role. U.S. companies interested in exporting medical devices or pharmaceuticals to Israel need to appoint a local distributor, agent or other legal representative to register their products. The device registration application should be accompanied by a 510(k), Pre-Market Approval (PMA) or an Investigational Device Exemption (IDE). Pharma registration is more complex and requires additional testing and clinical investigation on top of the product file and FDA certification. The average time it takes to obtain a market approval from the MoH is 150 days for medical devices and about 360 days for pharmaceuticals.
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Regulations
Medical Devices, including biologics that fall under a Biologics Certificate (BK) process at the USA Food and Drug Administration (FDA) Center for Biologics, must be registered with Israel’s MoH Medical Device Registry before they can be sold in the country. Companies wishing to export medical equipment or devices to Israel must have a local Israeli agent or distributor who should request a pre-marketing approval from the MoH. The request should be accompanied by one of the following documents: the U.S. FDA 510(k), or Pre-Market Approval (PMA). Biological devices fall under medical device classification and require FDA’s BK. In most cases CE and Canadian documentation are also acceptable. If a product is approved by the FDA, it can be registered with the MoH with no further testing. However, electro-medical devices must be tested at the Standard Institute of Israel (SII) for safety and for compliance with the Israeli electric system. In most cases the SII does not accept certifications from other countries.
For any imported medical device, the Israeli importer/agent must submit a registration application to MoH, Department of Medical Devices. The application should include (if available) a certificate issued by a competent authority of one of the following countries: Australia, Canada, European Community (CE) Member States (MSs), Japan, or the U.S. If such a certificate is not available, the registration process may still be available in some cases (usually for lower regulatory class devices) but will take longer, between two and six months, and the MoH will determine what type of testing is needed.
Product registration supported by existing FDA documentation usually takes approximately four months. The application for registration of a medical device shall be submitted to the Department of Medical Devices at the MoH. The application should be submitted on the special form designated for this purpose and include the following:
Note: A license (marketing authorization) for a medical device, granted by the MoH, is valid for up to five years from the date of registration of the device, except for implants with a life-supporting function, for which the validity is for two years from the date of registration.
In addition to the usual requirements for the registration of medical devices, as applicable to the device, specific requirements exist for the products detailed hereunder, which should be included in the application:
Registration costs the equivalent in ILS of $300 per single item, and $1,500 per catalog registration. Catalog registration is, for example, on an EKG device with different channels and accessories. Registration fees are updated by the MoH twice a year. Medical devices are classified according to FDA guidelines.
Technical Standards
Labeling
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Reimbursement
Israel’s Reimbursement System is called “The Healthcare Basket”. It includes all the services, medications, supplies, and medical equipment that the insured is entitled to receive according to the National Health Insurance Law. It was originally determined based on the health services that were provided by the MoH and the Clalit Health Fund as of January 1, 1994, and has been regularly updated by the MoH, on the basis of recommendations by a public committee.
The National Health Insurance Law describes the following fields of service to be included in the healthcare basket for which the health funds (HMOs) are responsible:
There are several health services that, as of now, have not been transferred to the health funds and remain the responsibility of the state:
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Barriers
All tariffs on trade between the U.S. and Israel have been eliminated since 1995. The Israel MoH uses the FDA’s standards for the purpose of issuing licenses. Import permit procedures for American-made, USFDA-approved medical equipment are easily facilitated. There are many suppliers, so U.S. companies should be ready to compete.
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Procurement & Tenders
The MoH, its group purchasing organization (SAREL), and the four HMOs publish procurement requests and tenders on their websites. Tenders are published in the Hebrew language. U.S. companies that wish to participate would be required to engage with an Israeli partner.
SAREL: http://www.sarel.co.il/auction/
Clalit: Clalit HMO Tenders
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U.S. Commercial Service Contact Information
Name: Yariv Moravnik Shavittyariv.moravnik-shavitt@trade.gov
