The US and Israel have resolved a decade-old pharmaceutical intellectual property (IP) dispute, with Israel agreeing to amend its patent laws and lengthen its data protection period for innovative medicines.

Israel has undertaken to change its expiry date on pharmaceuticals, which is currently the same as the product’s expiry in one of 21 markets, to the expiry date in the world’s largest markets. It will also maintain the confidentiality on data exclusivity files submitted to the Ministry of Health for market approvals for 6.5 years from the present 5.5 years, except in the case of fast-tracked drugs, for which the data exclusivity period will be shorter, but no less than five years.

In exchange for these concessions, Israel will be removed from the US Trade Representative (USTR)’s Priority Watch List of serious IP transgressors, and the US will support the nation’s accession to membership of the Organisation for Economic Cooperation and Development (OECD), which has been held back by the pharma IP dispute.

The agreement, which was reached through a Special 301 Out-of-Cycle Review (OCR) begun thee years ago, has been welcomed by the Pharmaceutical Research and Manufacturers of America (PhRMA), whose international president, Christopher Singer, praised the work of USTR Ambassador Ron Kirk, his staff and the Israeli government for bringing it to fruition.

“PhRMA believes this agreement will be beneficial to patients, as it could result in the earlier introduction of new medicines into Israel,” said Mr Singer.

The USTR’s Special 301 Report for 2009, which retained Israel on the Priority Watch List for the year, noted that the IP issues had been under discussion with Israel “for many years.” While there had been some encouraging progress, the US remained “seriously concerned with two key matters - Israel’s inadequate protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products, and measures that adversely affect the length of patent term extension granted to compensate for delays in obtaining regulatory approval.”

The Report claimed that the effective period of data protection provided by Israel was only in fact around three and a half years. This was due to the lengthy approval processes at the Ministry of Health, which had drawn complaints from US innovative companies and Israeli generics makers, it said.

- Earlier this month, Israel was judged by Business Monitor International (BMI) to be the “tenth least-attractive” pharmaceutical market out of the 71 nations which the company assesses, largely because of its “biased” IP regime and “restrictive” pricing and reimbursement environment. During 2009-2014, Israeli pharmaceutical spending will increase by an average of just 0.94% a year, reaching U$$1.50 billion by 2014, according to BMI’s most recent forecasts.