Dear clients,
In this edition, we highlight key developments across regulation, reimbursement, and innovation that affect the full lifecycle of pharmaceutical and medical technology products, from importation and clinical development to market access and post-approval oversight. These updates signal increasing scrutiny, rising evidentiary thresholds, and closer interaction between regulators, courts, and payers in Israel.
1. Consumer Products Reform Affecting Cosmetics & Human-Use Insect Repellents
The Israeli Ministry of Health has published a comprehensive legislative memorandum proposing significant amendments to the Pharmacists Ordinance as part of the broader governmental reform aimed at removing regulatory barriers to the import and manufacture of consumer products (including cosmetics and biocidal products).
The proposal reflects a structural shift in Israel’s regulatory model for consumer products, strengthening reliance on foreign regulatory frameworks (including U.S. regulatory frameworks), expanding enforcement powers, and introducing, for the first time, primary legislation governing a biocidal product for human use.
The legislative memorandum addresses, among other things, the following key issues.
a. New U.S. Reliance Import Track for Cosmetics (“U.S. Track”)
A central pillar of the reform is the creation of a new import pathway based on U.S. federal regulation, alongside the existing European reliance track. Under the proposed “U.S. Track”, eligible importers will be able to import cosmetics that are manufactured and lawfully marketed in the United States and are fully compliant with U.S. federal regulatory requirements.
The track is expected to improve time-to-market and reduce regulatory friction for compliant U.S. manufacturers.
b. New Mandatory Compliance Requirements for Retailers
The reform introduces an expanded legal definition of “Retailer” and imposes direct regulatory responsibility at the point of sale. Retailers will be required to verify that the cosmetic product was sourced only from a registered manufacturer, importer, or distributor, and the product appears in the Ministry of Health’s official Cosmetics Database (via a marketing notification or license).
This creates a new active verification duty for retailers, direct enforcement exposure at the retail level, and a regulatory mechanism that blocks unregistered supply chains.
c. Expansion of the Legal Definition of “Cosmetic Product” To include “Solid Soap.”
A notable technical but impactful change:
The memorandum eliminates the longstanding exclusion of solid soap from the definition of “cosmetic.” As a result, solid soap products will become fully subject to safety assessments, Responsible Person requirements, market notification obligations, and full post-market enforcement mechanisms.
d. Structural Reinforcement of the Regulatory Authority and Enforcement Powers
The memorandum reflects an apparent institutional strengthening of the Economic Health Regulation Division within the Ministry of Health, as well as the restructuring of financial sanctions for stakeholders active in the consumer products sector.
e. Establishment of a Permanent Professional Advisory Committee
The proposal introduces a new professional advisory committee for consumer products, modeled after the Food Law advisory framework.
The committee will advise both the Minister of Health and the Head of the Economic Regulation Division on the application of adopted EU regulations, regulatory adaptations, extensions, and exceptions.
f. Full Statutory Regulation of Human-Use Insect Repellent Products (Biocides – PT19)
A major structural reform relates to biocidal products intended for application on the human body, such as mosquito repellents. The existing emergency-based supervision order, dated 1962, will be repealed. Regulation will be embedded directly into primary legislation under the Pharmacists Ordinance.
The framework will be aligned with EU regulatory standards and public health risk management principles.
The new regime introduces a formal national biocides registry, a simplified registration pathway based on approved EU active-substance lists, and risk-based assessment.
Any human-use repellent product that held a valid Israeli license on the effective date of the new law will be deemed automatically registered in the new biocides registry until the original license expiry date or three years from the effective date of the amendment, whichever is later. This provides built-in regulatory continuity and operational certainty.
It is important to emphasize that the statutory biocides framework applies exclusively to insect and arthropod repellents intended for direct application on the human body, corresponding to EU Product Type 19 (Annex V to EU Regulation 528/2012)
Other biocidal product categories (e.g., surface disinfectants, industrial pest control products, veterinary uses) are not included at this stage.
Our Pharma, Healthcare & Med-Tech Regulatory Team is closely monitoring the legislative process, implementation timelines, and secondary legislation, and will continue to provide targeted updates as the reform progresses.
2. National Labor Court Ruling on the Health Fund Non-Basket Treatments Committee (November 26, 2025)
On November 26, 2025, the National Labor Court issued a decision in a case concerning the Health Fund Non-Basket Treatments Committee’s refusal to approve public reimbursement for a high-cost gene therapy for a rare, progressive condition. Although the matter arose in the context of social security and health fund obligations, the judgment includes observations relevant to pharmaceutical and medical technology companies.
A central question addressed by the Court was the evidentiary weight of marketing authorization—both Israeli registration and FDA approval—when assessing the clinical efficacy of a therapy for exceptional public funding.
The court’s reasoning suggests that marketing authorization alone may not be sufficient in all cases to establish the clinical effectiveness needed to justify exceptional reimbursement decisions.
This reflects a broader emerging trend regarding increasing scrutiny of the scientific evidence base supporting therapies for rare diseases and orphan indications, particularly where approvals have been granted through accelerated pathways. Similar questions are raised in health technology assessment (HTA) and regulatory submissions, where reliance on prior FDA or EMA authorization is not always, in itself, sufficient, and is increasingly complemented by demands for robust post-approval data.
The judgment also contains an implicit structural message. Where the clinical circumstances of an individual patient are not materially unique compared with the broader patient group, and where granting coverage in a particular case would, in practice, have group-wide budgetary implications, the appropriate forum for deciding on coverage is the National Health Basket Committee, rather than an individual exceptional-funding committee. In this sense, the Court signalled that the prioritization and ranking carried out by the Basket Committee remain relevant when Health Fund Non-Basket Treatments Committee considers similar therapies.
Taken together, the decision points to higher evidentiary expectations for demonstrating meaningful clinical benefit in high-cost, rare-disease, and orphan therapies, as well as a need for closer alignment between regulatory, reimbursement, and judicial perspectives on data robustness.
An appeal against this decision has been filed with the High Court of Justice. We will continue to monitor this development, which may influence the future practice of the Health Fund Non-Basket Treatments Committee and market access issues for innovative products in rare and high-cost indications.
If you would like a more detailed briefing on the potential implications for your rare-disease or accelerated-pathway portfolio in Israel, we would be pleased to assist.
3. AI for Life: The Future of Intelligent Healthcare Conference
At the international AI for Life: The Future of Intelligent Healthcare conference, led by Amos Bentzur, the partner leading the Pharma, Healthcare and Medical Device Practice & the team at Shibolet, more than 220 leaders from the Pharma, Biotech, Medical Technology and AI sectors, including hospital directors, health fund executives, research institutions, and regulatory experts from Israel and abroad, gathered for an exceptional discussion on the future of medical innovation and regulation in the age of artificial intelligence with particular attention the concepts affecting the industry most: foundation models, trust-but-verify concept, and the new role of the human-in-the-loop.
Throughout the day, key insights from our very own Nili Hayun-Dickman’s presentation and others emerged on:
- The development and commercialization of advanced medical technologies
- The impact of AI on clinical and regulatory processes
- Collaboration between industry, academia, regulators, and healthcare organizations
- Re-skilling health systems for a data-driven era
During the conference, a Call for Action was announced to establish a dedicated Task Force, led by key industry stakeholders in partnership with Shibolet. The purpose of the Task Force is to foster a structured and ongoing dialogue with Israeli regulators, aiming to advance the regulatory transformation necessary for the responsible, informed, and effective development and deployment of AI technologies in the healthcare sector.
As a continuation of this Call for Action, and as part of the effort to translate these discussions into concrete regulatory and implementation pathways, our team will also lead a roundtable discussion at the HealthIL Conference – “Looking Ahead: The Next Phase for Israeli Health Innovation” (January 19, 2026, EXPO Tel Aviv). The roundtable will further advance the Task Force’s objectives, focusing on emerging regulatory challenges, practical implementation considerations, and the evolving role of AI in Israel’s health and medical technology ecosystem.
4. MOH Procedure 33 – Amendment to the Procedure on Importation and Marketing of Medicinal Products and Pharmaceutical Substances
The Israeli Ministry of Health has updated Procedure 33 to facilitate earlier trial readiness. Under the amendment, sponsors may submit the first import application for a clinical trial product upon receipt of approval from the Helsinki Committee (Form 6), even before Form 7 is issued. This change enables sponsors to initiate operational preparation in advance and activate trial sites more quickly once full regulatory authorization is granted, thereby reducing timelines and minimizing delays in trial initiation.
The amendment applies to all types of clinical trials, across all stages, and is not limited to multi-center studies or any specific type.
5. FDA Opens Public Consultation on Real-World Performance of AI-Enabled Medical Devices (September 2025)
The FDA’s September 2025 Request for Public Comment on measuring and evaluating the real-world performance of AI-enabled medical devices marks a significant regulatory milestone in the evolving landscape of medical AI. In this document, the FDA acknowledges the dynamic nature of AI systems, which may continue to change after deployment, particularly in real-world clinical environments.
The agency invited practical, evidence-based input from all interested stakeholders on a wide range of topics, including performance monitoring, lifecycle governance, transparency, bias and equity, and human-in-the-loop. The request explicitly applies to AI technologies broadly, including generative AI.
The public comment period closed on December 1, 2025, and the FDA is now reviewing submissions. Our firm, together with stakeholders across the industry, is closely monitoring the FDA’s next steps and forthcoming regulatory developments in this rapidly evolving field.
These developments will also help inform parallel discussions in other jurisdictions, including the work of task forces contributing to the Israeli Ministry of Health’s evolving approach to AI regulation.
6. FDA Launches TEMPO Pilot for Digital Health Technologies
On December 5, 2025, the U.S. Food and Drug Administration (FDA) launched Technology-Enabled Meaningful Patient Outcomes (TEMPO), a pilot program to expand access to digital health tools for chronic disease management while maintaining patient safety. Developed by the FDA’s Center for Devices and Radiological Health (CDRH), the pilot will test a risk-based regulatory approach to support digital health technologies that improve outcomes, including:
- Cardio-kidney-metabolic conditions (e.g., prediabetes, heart failure)
- Musculoskeletal issues (e.g., back strain)
- Behavioral health conditions (e.g., depression)
Under TEMPO, selected manufacturers may seek FDA enforcement discretion for specific requirements (including premarket authorization or investigational device requirements) if they collect and share real-world performance data showing effectiveness.
The program is run in collaboration with the CMS Innovation Center (CMMI) and supports the CMS ACCESS Model, which aims to improve beneficiary access to technology-enabled, integrated care.
TEMPO also aligns with the FDA’s “Home as a Health Care Hub” initiative to promote home-based health technologies and strengthen chronic disease management outside traditional healthcare settings.
The FDA will accept statements of interest starting in January 2026 and expects to select up to about 10 manufacturers in each of four clinical use areas.
Looking Ahead
These regulatory, judicial, and policy developments highlight an evolving environment in which marketing authorization, real-world evidence, reimbursement, and compliance are increasingly interconnected. For life-sciences companies, navigating this landscape requires a lifecycle-oriented approach, anticipating regulatory expectations early, aligning data strategies accordingly, and closely monitoring how courts, regulators, and payers assess clinical value. Strategic preparation will be critical to sustaining market access and minimizing regulatory risk.
