One of my favourite statistics about surging British-Israel trade is that one out of every seven prescriptions filled by the NHS is sourced from Israeli pharmaceutical companies.
The high dependence of the NHS on Israeli ethical drugs is just one of the symbols of deepening economic relationship between the UK and Israel which with the passage of time has the power to overcome the focus of diplomacy on settlements and Gaza and to reset the dial around commercial relationships.
Much of the economic debate about Israel often focuses on high-technology and the brilliant companies that have been spun out of the Technion, Weizmann Institute and the military. But most of Israel’s tech companies fall to overseas buyers before they become world class companies.
One major exception to this pattern is the pharmaceutical giant Teva which has joined the ranks of the world’s largest drug firms mainly specialising in generics – drugs based on out-of-patent medicines.
The company has travelled a long way since it was founded in Jerusalem in 1901 as a pharmacy wholesaler by German immigrants Messrs Salomon, Levin and Elstein. The company grew gradually over the years developing its own pills and in the 1930s adopted the Hebrew name of Teva, meaning nature.
Some 114 years after it was founded Teva is leading a hostile takeover that, if successful, would propel it even further into the ranks of the world’s leading pharmaceutical groups.
Its target is Dutch-based Mylan and Teva is bidding an astonishing $40 billion for control making it by far the largest transaction ever attempted by an Israeli quoted company.
Mylan boss Robert Coury is fighting off the bid and has made its own offer for another rival Perrigo, as part of its defence strategy.
Teva is keeping the pressure on Mylan by buying shares in the open market and is aiming to increase its current 1.8 per cent stake to 4.6 per cent. Mylan’s main offices are in Britain and it is located in Holland for tax purposes but is claiming American nationality so that it fight of the deal using US anto-trust law.
Among the reason for Teva’s ambition is that it would like to win control of Mylan’s strong role in anti-allergy treatments including EpiPen, which protects against severe allergies.
Mylan’s biggest shareholder, the aggressive US hedge fund Paulson & Co, is urging the board to consider and accept the Teva offer. The Teva bid comes at a time of increased merger activity among the world’s biggest pharmaceutical companies.
The success of firms such as Teva is the speed with which they adopt new compounds as soon as they come out of patent offering them to hospitals and health services around the world at prices which that can be afforded. Many in-patent drugs are too expensive to be offered in the mass market.
It has proved a winning formula for Teva and has been highly beneficial to the NHS and the British taxpayer.
Alex Brummer is a former vice-president of the Board of Deputies and City Editor of the Daily Mail