Captive Economy: The Pharmaceutical Industry and the Israeli Occupation

One of Israel’s favorite selling points, in its campaign to rebrand itself and divert attention from its ongoing theft of Palestinian land by means of ethnic cleansing, military control and apartheid policies, is its claim to world leadership in medicine. The problem with this line of apartheid PR is, of course, the failure to mention the control the state of Israel has over the Palestinian healthcare system.

Captive Economy, a new report by Who Profits investigates the involvement of Israeli and multinational pharmaceutical industries in the occupation of Palestinian land.

The report exposes a complex system of military and civilian laws and regulations that make the West Bank and the Gaza Strip a captive market for Israeli and International drug companies. The Palestinian market is held by binding economic agreements, subject to restrictions imposed by Israel, often in the name of security and quality-control. There are no independent pharma watch dogs for the people.

The Paris Protocol, a significant part of the 1993 Oslo Accords, regulates the financial relations between Israel and the Palestinian Authority by placing them under the same taxation envelope. In the case of the pharmaceutical industry, the dependency of the Palestinian market on the Israeli authorities has inflicted strong negative economic effects on the OPT.  For example, the Israeli Ministry of Health insisted that the import of drugs to the OPT would be allowed only for drugs registered in Israel, consequently blocking the neighboring Arab markets.

In East Jerusalem, Palestinian institutions are obligated to purchase goods produced by the occupier, due to the illegal annexation East Jerusalem under international law and the refusal to allow Palestinian pharmaceuticals into East Jerusalem hospitals and pharmacies.

In the Gaza strip, which is under strict closure, the Israeli control over all products that enter and leave the strip yields an absurd situation in which drugs can enter the Gaza Strip. However, no pharmaceutical can leave the strip. Hence, all expired products are left to the care of the receiving Gazan health institutions. This is a heavy burden that requires professional solutions, including toxic waste dump stations and qualified personnel.

Israeli and multinational companies enjoy the aforementioned situation in several ways. From the four largest, originally-Israeli companies (Teva, Perrigo Israel, Taro and Dexcel Pharma), to smaller companies (such as Trima) – all Israeli companies enjoy easy access to the Palestinian market, free of customs and checkpoint disturbances. The Israeli manufacturers and agents do not have to amend any of their products in order to sell them in the OPT. As a result, Israeli and multinational companies can sell drugs that are not labeled in Arabic to an Arabic speaking population. Moreover, a differential pricing policy is applied by multinational companies worldwide according to the population’s socio-economic status. This policy, often called “price discrimination”, overlooks the situation in the OPT.

The politics of the occupation create a continuation of the structured inequality, in which it is extremely difficult for Palestinians to import raw materials and export pharmaceuticals.  The Palestinian pharmaceutical industry suffers from difficulties transferring merchandise from the West Bank to the Gaza Strip. At the same time, Israeli manufacturers can market their products without checkpoints, security checks or special permits. The situation has severe results for the local population, mainly due to higher prices of pharmaceutical products which limit the accessibility of basic healthcare.­­

3 thoughts on “Captive Economy: The Pharmaceutical Industry and the Israeli Occupation”

  1. Wow, occupation, ethnic cleansing, land theft, illegal settlement, appartheid, illegal annexation; are you sure you covered every Big Lie that the islamofascists have come up with? None of this is true. Israel has title to all the land and the arabs have no political rights as codified at San Remo and incorporated into the Mandate. Even the UN charter article 80 endorses jewish rights to the land. The arabs are liars and chancers and their supporters are anti- semites. Shame on you.

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