The pound and the dollar.. What are the dimensions of the drug market crisis in Egypt?

Some patients in Egypt have tended to reduce the doses of required medications amid the scarcity of medications on the market (Shutterstock)

The problem of dollar scarcity as a result of the economic crisis in Egypt has had its effects on the pharmaceutical industry, which has increased concern about the strategic commodity amid the presence of a severe shortage of medicines in the Egyptian market in many pharmaceutical fields, and the absence of the role of national pharmaceutical companies.

According to a recent study, Egypt is the largest consumer of medicines in the region, with a population of 106 million citizens, while private sector companies account for the lion’s share of the total Egyptian pharmaceutical production, with the role of the government sector declining, as 10 companies account for more than 85%. Of the total sales volume, it is led by Novartis, which accounts for more than 7% of the market share.

The price of the dollar recorded 30.95 pounds, according to the Central Bank of Egypt, with it fluctuating in the parallel market between 50 pounds to more than 60 pounds, which affected the purchasing power of patients, and threatened pharmacists and production companies, which was monitored by those concerned with the crisis who spoke to Al Jazeera Net, warning. Who's next?

An economic crisis, not a medicine crisis

The head of the Center for the Protection of the Right to Medicine, Mahmoud Fouad, told Al Jazeera Net that the medicine market in Egypt is old and ancient and has its name on the African continent. It includes 188 companies that own factories, 22 foreign companies, some of which own factories, and about 1,200 commercial companies that do not own factories. Its medicines are manufactured by others and 8 public governmental companies, noting that sales of the Egyptian market for medicine in 2023 exceeded $3.25 billion, which is the largest in the region after Saudi Arabia.

Fouad adds that medicines are a vital strategic commodity in Egypt, of which there are 13,000 types of medicine, of which 8,000 are actually produced on a permanent basis, but they are linked to two problems: first: that 95% of their raw materials are imported from abroad, which makes them linked to the dollar, and second: that the medicine The last commodity subject to compulsory pricing in Egypt, and the last pricing that took place was in 2017, when the dollar was equal to 18 Egyptian pounds, but now it has risen, prompting drug makers to refrain from production.

The head of the Center for the Protection of the Right to Medicine describes the current crisis as an economic and monetary crisis and not a pharmaceutical industry crisis, noting that drug makers have appealed to the government in recent days to provide dollars to receive medicines held at the ports, without a solution, warning that if April comes... Next April, without creating dollar liquidity, the crisis will be more serious as the alternatives available in the market are exhausted.

Fouad draws attention to the fact that the national pharmaceutical companies sector is suffering and cannot solve the crisis, explaining that the number of national companies until 1998 was 12 public companies producing 77% of the entire market’s production, but during the era of President Hosni Mubarak some of them were privatized, so their number declined to 8 companies now produce only 10% of the pharmaceutical market, making private pharmaceutical companies control the entire market.

Fouad adds that pharmaceutical companies are currently trying to put pressure on the government by reducing production lines, and working at about 60% of their capacity in order to pressure to liberalize the price of medicine, which is subject to compulsory pricing in light of the government raising the prices of electricity and other services, even though in all cases the companies earn many times the fair gain, But it wants to maintain the same percentage of usual gains, he said.

Resolution 499

The union leader and member of the Pharmacists Syndicate in Egypt, Dr. Islam Abdel Fadel, in an interview with Al Jazeera Net, agrees with the previous opinion that the current crisis in the drug market lies in the scarcity of the dollar, explaining that Ministerial Resolution No. 499 links the compulsory price of the drug to an old value of the dollar, which He made the crisis worse, making it likely that companies would wait for the price of the dollar to stabilize in order to pump suitable medicines and not suffer losses.

Abdel Fadel confirms that this has negatively affected patient consumers, as there is a scarcity of medicine and a severe shortage of types of medicines, to the point that pharmaceutical companies are currently dealing with pharmacies on a “quota” system, so each pharmacy has a certain quota that it cannot exceed, and it has become common. Each pharmacy only has two boxes of medicine, which has led to stock shortages and crises in pharmacies.

The union leader of the Pharmacists Syndicate adds that the crisis negatively affected the economics of pharmacies, as their sales declined due to the continuation of the old compulsory pricing without an appropriate change in prices and the value of the currency, and the decline in the purchasing power of citizens, which caused an increase in recession and a decrease in economic returns, and the involvement of some weak souls in selling... Banned medicines, in conjunction with losses in medium and small drug distribution companies, which are fighting to prevent all of them from being removed from the market, with a number of them slipping into the crisis, which threatens national pharmaceutical security, according to him.

Regarding the impact of the crisis on citizens, Abdel Fadel says: “Unfortunately, some patients began horrific non-medical practices in saving part of their medication allocations to buy other basic needs in their homes, until this system extended medications for chronic diseases, such as blood pressure and diabetes, which reduced some Patients took doses without consulting a doctor in order to preserve the packages available to them, and some of them even bought the medicine by tablet, and not by the strip or box that usually contains two strips of medicine, while the percentage of purchasing nutritional supplements that were popular in previous periods completely declined.”

Dollar hole

For his part, the Egyptian Prime Minister, Mostafa Madbouly, stressed the keenness to localize the pharmaceutical and medical supplies industry in Egypt, while the Egyptian Ministry of Health decided to ban the import of imported medicines that have a local counterpart, while giving priority to importing the raw materials necessary for the manufacture of basic medicines, while the Egyptian Authority announced On February 14, the Egyptian Pharmaceutical Company (affiliated with the Council of Ministers) launched expanded oversight campaigns on pharmaceutical institutions to control the drug market, with the announcement of a hotline for this, according to an official statement.

In an interview with Al Jazeera Net, the former Egyptian Undersecretary of the Ministry of Health, Mustafa Gawish, believes that the dollar scarcity crisis was nothing but the hole that revealed the defects of the pharmaceutical system as a whole, and it is the latest station in the path of major stations of chronic deterioration in the national drug situation, which has accumulated over the years. Contracts, he confirmed.

Gawish agrees with his predecessors on the negative impact of private and foreign companies’ acquisition of the largest share of the market, warning of the continued dependence of the Egyptian pharmaceutical industry on imports by 95%, the increase in the Ministry of Health’s indebtedness to business sector companies, the lack of financial liquidity in those companies, and the continuation of the problem of random increases in prices. Medicine since the issuance of Resolution No. 499 of 2012, regarding compulsory pricing, and the decline in government allocations to support medicine by 50% at the end of the 2022/2023 budget, and years before that since 2014.

The former government official proposes that the Council of Ministers issue a decision on customs exemption for pharmaceutical raw materials, operating supplies, and some essential medicines, worth $150 million, according to the latest official report announced, and issue a new decision for pricing according to standard rules, cancel Resolution 499, and re-inject government funding necessary to support medicine in a way that Suitable, with the start of supporting pharmaceutical research in Egyptian universities, and activating the factories of the Al-Nasr Company for the manufacture of pharmaceutical chemicals, in order to start manufacturing pharmaceutical raw materials in Egypt and not rely on imports.

Source: Al Jazeera