Is the FDA finally on its way to opening a branch in Israel? A U.S. Congress committee is expected to give the initial go-ahead on Thursday for a proposal to open a branch of the Food and Drug Administration in Israel. If the legislative process is successfully completed, it will be significant news for the local industry.
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The establishment of the branch will significantly alleviate the current bureaucracy in obtaining approvals from the U.S. authority, particularly regarding biotech companies and the development of new products and devices in the biomedical field.
Today, almost every Israeli company in the field is required to obtain FDA approval in order to promote, market, and export its product. The local representation is expected to significantly shorten the existing process timelines and also save on associated costs, such as hiring regulatory consultants, shipping products overseas, and more.
Additionally, physical proximity to the market streamlines the approval processes, improves communication, and may save Israeli players millions of shekels in the market.
In Israel, the process of opening the branch has been underway for a long time, and despite numerous question marks, the parties involved expressed cautious optimism Wednesday.
However, the proposal is expected to undergo a lengthy legislative process, with many obstacles along the way, including budget committees, amendments and writings, discussions in the House of Representatives, and then final approval in the Senate - possibly by the end of the year.
The most optimistic estimates speak of opening the branch within the next year, with the hope of leveraging the growing American concerns over Chinese influence on global drug supply and the warm relations currently between Israel and the Abraham Accords countries, with the intention that the branch will serve the entire region and serve as a tool for promoting regional cooperation.
Currently, the FDA has regional offices in only six countries: China, India, Costa Rica, Chile, Mexico, and Belgium. The Jordanian office, which opened in Amman in 2011, closed just two years later due to budget cuts and instability in the region. In addition to the branch in Israel, American lawmakers are also aiming to open a branch in the United Arab Emirates.
"The fact that a branch may be opening in Israel does not necessarily mean that its staff will be capable of conducting the innovative tests required by the Israeli healthcare ecosystem. Some argue that it may do more harm than good"
In the Health Ministry, and among other governmental stakeholders involved in the process, it was stated that the process is currently under discussion, and they responded cautiously about its progress, after many years of it being on the agenda.
A similar proposal to establish an FDA office in the country was put forward in 2019 with the support of lawmakers from both parties but did not materialize. This time, the proposal is being presented to Congress by the initiative of the organization "U.S-Israel Education Association" (USIEA).
However, despite today's news coming out of Congress, which greatly promotes the local industry's reputation, there are still many question marks surrounding the process. Currently, Israeli companies hire specialized consultants who work with the FDA and go through all the approval processes together.
The question arises whether a small office with a few officials can take on the entire process without the relevant experts who actually approve the products being involved. The fact that a branch may be opening in Israel does not necessarily mean that its staff will be capable of conducting the innovative tests required by the Israeli healthcare ecosystem. Some argue that it may do more harm than good.
Another question is the position of the FDA itself. If the process is imposed by Congress, the actual outcome may be merely superficial. Either way, in Jerusalem, hope was expressed yesterday, accompanied by doubts and concerns, that the process will lead to a serious decision, and the FDA branch will indeed open soon, propelling the local industry forward.