TEL AVIV _ The FDA has decided to recognize clinicaltrials performed in Israeli hospitals, a move that healthindustry analysts here said is a crucible for the country'sfledging health care industry.

Israel is the second country to have such an arrangementwith the FDA; Sweden was the first. The pact wasinitiated by Israeli Health Minister Ephraim Sneh nearlysix months ago. Sneh said the agreement is a testament tothe high quality of Israeli medicine. Implementation willbe monitored by visiting FDA inspectors.

Analysts said the new policy is expected to raise thealready high quality of Israeli clinical trials further and itshould increase medical research funding to majorhospitals and research institutes.

One Health Ministry spokesman estimated that hospitalscould increase income from clinical testing byinternational firms up to $250 million per year.

U.S. companies conducting clinical trials in Israel will beable to exploit a rich source of medical professionals:Israeli doctors' salaries are up to 50 percent less than theirAmerican counterparts'. The surrounding infrastructurefor testing also will cost about half as much as in the U.S.

Patients in Israel also will benefit, he added, becauseclinical trials will be supervised under strict FDAstandards. Hospitals will have an economic incentive toimprove the quality of work or they will not be able tosuccessfully compete for contracts, Sneh said.

While the move is being heralded by many, some industryleaders, like Haim Aviv, CEO of Pharmos Corp., apublicly traded biotech firm in Rehovot, are morecautious. "It is much too early to tell what long-termbenefits this will have for Israel's biotech industry," hesaid. "Clinical trials done here are already accepted by theFDA if they are part of a larger set of trials."

Halley Faust, of the Medmax Venture Capital Fund,which has invested in a number of Israeli biotech start-ups, said there are real advantages to doing clinical trialsin Israel.

"The Israeli population is a very diverse one and thusperfect for clinical trials," he said. "It is also a very stablepopulation with a lower drop-out rate as people tend tomove less and have a higher rate of completing trials." n

-- Joel Bainerman Special To BioWorld Today

(c) 1997 American Health Consultants. All rights reserved.