This activity will damage Teva, primarily, which to date had manufactured and marketed Merck products in Israel.
Merck, the world’s biggest pharmaceuticals company, with a $19.9 billion 1996 sales turnover, began independent operations in Israel today. The activity will be managed by a subsidiary, set up for this purpose, called MSD-Israel. The company’s volume of activity in Israel, to date, has reached $50-60 million per year.
To date, Merck’s operations in Israel had been handled by Teva, which manufactured and marketed Merck products in Israel. Following Merck’s entry into independent operations, Teva is expected to suffer, primarily in the field of Merck drug marketing. Similarly, there are estimates that Merck will import some pharmaceuticals which, to date, had been manufactured locally by Teva.
Merck’s entry into the Israeli market as an independent entity continues a trend in Israel’s pharmaceuticals market. Recently, several leading international companies have set up local representatives, including Johnson and Johnson, Eli Lilly, Glaxo-Wellcome and others. To date, those international companies had operated via local companies, which served as exclusive agents. In most cases, independent operations means expansion of marketing, while distribution remains in the hands of the Israeli affiliates.