More than three decades ago, the Oslo framework identified pharmaceuticals as one area for Israeli-Palestinian industrial cooperation. That idea is worth revisiting today, not because economic cooperation can resolve the Israeli-Palestinian conflict, but because there may be a narrower economic opportunity that has never been seriously tested.
Palestinian pharmaceutical manufacturers already produce medicines at meaningful industrial scale. Israel, meanwhile, is a nearby pharmaceutical market that purchases large volumes of generic medicines. The question is whether qualified Palestinian manufacturers could supply selected products to Israeli purchasers safely, reliably and at a competitive total cost.
If they can, the potential benefit runs in both directions.
For Palestinian manufacturers, access to Israeli customers could mean additional production volume, revenue, employment, investment and a larger commercial base from which to compete in other markets. For Israeli purchasers, an additional qualified supplier could increase competition and, in the right circumstances, reduce costs or diversify supply. The two economies are also deeply interconnected. Increased Palestinian industrial activity generates demand for transportation, logistics, financial services, inputs and other commerce, some of which inevitably crosses into the Israeli economy. Buying a medicine from a Palestinian producer is therefore economically different from importing the same medicine from a distant market whose production has little connection to the local economy.
No preferential treatment
That does not mean Palestinian supply should receive preference. Nor does it mean proximity automatically makes it cheaper or more resilient. It means there is a plausible economic proposition worth measuring.
That matters for a broader reason. Debate over Israeli-Palestinian economic relations is often conducted at the level of political principle: integration versus separation, cooperation versus normalization, dependence versus development. Pharmaceuticals offer something much more concrete. A factory can be inspected. A medicine can be tested. Delivery times can be measured. Costs can be compared. Supply failures can be counted. Instead of arguing abstractly over whether economic cooperation works, one sector can be examined against measurable commercial standards.
The opportunity should therefore be approached as a sequence of tests.
The first question is whether it is feasible at all. Before anyone discusses tenders or contracts, a prospective Palestinian manufacturer, an Israeli purchaser and the relevant authorities would need to establish a lawful regulatory and operating pathway. Which registrations and authorizations are required? Who must hold them? Does the manufacturer satisfy the requirements for manufacturing quality, bioequivalence, stability, data integrity and pharmacovigilance? Can regulators obtain the inspection access, documentation, samples and enforcement cooperation they require? If those requirements cannot be met through a workable regulatory pathway, there is no basis for proceeding.
Security and payment are part of the same feasibility test. Medicines would need dependable routes and crossing procedures, cargo screening, chain-of-custody controls and contingency arrangements for disruption. The commercial relationship would also need workable banking, insurance, payment and dispute-resolution arrangements. A supplier that manufactures an excellent product but cannot move it or receive payment reliably is not a viable supplier.
The first medicine should therefore be deliberately simple: a mature, off-patent generic already manufactured by the company, with stable demand, adequate shelf life, meaningful volume and no applicable patent or exclusivity barrier. The manufacturer should also demonstrate that supplying Israel would not come at the expense of existing Palestinian medicine needs. For an initial test, a product with straightforward manufacturing, storage and transport requirements would make the economics easier to evaluate without unnecessary operational complexity.
A possible example is mebendazole 100 mg tablets, a medication used to treat intestinal worm infections. In Israel, the product is sold as Vermox 100 mg tablets (mebendazole), and the current Israeli listing identifies the manufacturer as Janssen Pharmaceutica in Belgium. As far as I can determine, it is not currently manufactured in Israel. Meanwhile, Jerusalem Pharmaceuticals, a Palestinian pharmaceutical manufacturer based in the Ramallah area, produces the same active ingredient, strength and dosage form under the brand name Vermazol 100 mg.
This is the type of opportunity that should be tested. Israel already obtains this medicine from a manufacturer abroad, while a Palestinian manufacturer produces an equivalent generic product nearby.
The economic test
Once feasibility has been established, the economic case also needs to be tested.
The relevant comparison is not factory-gate price. It is total delivered cost. An Israeli purchaser should compare a Palestinian supplier with the actual alternative source after including registration and supplier qualification, quality oversight, packaging, transportation, crossing procedures, warehousing, banking, financing, insurance, inventory requirements and disruption risk. One-time entry costs should be separated from recurring costs and spread over realistic volumes and contract duration.
The same discipline should apply to claims about resilience. A West Bank manufacturer may be geographically close while remaining exposed to crossing closures, political disruption, banking constraints or the same international sources of active pharmaceutical ingredients used by other manufacturers. Proximity is valuable only if it translates into an operational advantage.
If the Palestinian product is more expensive, less reliable or harder to oversee, the answer should be no. If it meets the applicable standards and is competitive on total cost and supply performance, there is no economic reason to exclude it simply because the factory is located in the West Bank.
Only then should an Israeli purchaser consider a limited pilot through whatever lawful procurement mechanism applies. The pilot should be nonexclusive and reversible, cover a commercially meaningful but noncritical share of demand, preserve an alternative supplier and maintain appropriate safety stock. Performance criteria should be established before the first order: batch quality, regulatory compliance, on-time delivery, lead-time variability, interruptions, inventory requirements and total delivered cost.
Palestinian interests
The Palestinian side also has legitimate interests to protect. Participation should be voluntary. Manufacturers should not be required to enter joint ventures with Israeli companies, accept exclusive arrangements or abandon other markets. A commercial opportunity should expand their options, not replace one form of dependence with another.
None of this should be sold as a peace initiative. Pharmaceutical trade cannot resolve borders, security, settlements, sovereignty or the profound political disputes between Israelis and Palestinians. Nor should commercial cooperation be used to minimize the structural imbalances between the two economies.
That is precisely why the proposal should remain modest.
There is an identifiable potential economic benefit. There is also a long list of reasons why the idea might fail. Both can be true.
So test them.
Identify a suitable manufacturer and product. Determine whether the regulatory and security pathway is workable. Calculate the real delivered economics. Stress-test the supply chain. Then let the evidence decide.
If the economics fail, do not proceed. If they work, there may be a model worth expanding.
More than thirty years after pharmaceuticals were identified as an area for Israeli-Palestinian industrial cooperation, finding out should not require faith in Oslo. It requires numbers.
Prof. David Adler is Chief Scientific and Medical Officer at the PATHORA Institute of Pathology & Tissue Medicine in Germany, and holds academic appointments at the Hebrew University of Jerusalem, Ben-Gurion University of the Negev, and the University of Bonn. He previously served in a senior position at Bayer AG.
Published by Globes, Israel business news - en.globes.co.il - on September 17, 2026.
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