Pharmaceutical Market in Egypt: Severe Shortage Vs Price Spikes

"Doctor, please write down an alternative medication for each type on the prescription" is a common plea among patients in Egypt now due to the severe shortage of medicines in the local market, intensifying daily and impacting both healthy and ill individuals.

A father shared his harrowing experience with Ahram Online (AO) about finding medication for his two-year-old child.

After searching for the medicine for over two hours in various pharmacies in different areas, many acquaintances finally recommended he go to the Ambulance Pharmacy, one of the largest governmental pharmacies.

Despite his many attempts to call the customer service of that pharmacy through their hotline, no one answered him.

This frustration led him to visit the pharmacy in the early hours of the following morning to find hundreds of patients' families queued up there, waiting for their turn to inquire and purchase their medications, if available.

One of the people waiting in the line advised him to return to the treating doctor before deciding to join the queue.

Then, taking this advice, he returned home to obtain an alternative prescription from the treating doctor, he said.

This shortage in the market has been exacerbated by recent price hikes.

According to market participants, these increases are expected to continue because some companies are halting production until the prices of medics are adjusted.

Egypt's pharmaceutical market has recorded sales of approximately EGP 73.3 billion in the first five months of 2024, compared to EGP 51 billion during the same period of 2023, according to a recent report by IQVIA, an organization dedicated to monitoring pharmaceutical market sales.

According to figures released by the cabinet's Information and Decision Support Centre, the Egyptian pharmaceutical market is one of the largest in Africa with annual sales amounting to approximately $7 billion.

The market is experiencing a severe shortage of diabetes and blood pressure medications, essential in nearly every household, along with many other chronic and non-chronic disease medications.

The number of missing drugs is estimated at around 800, said Ali Auf, head of the Pharmaceuticals Division at the Federation of Egyptian Chambers of Commerce.

In a LinkedIn post, pharmaceutical sales representative Gerges Maher highlighted the "Availability" service offered by the Egyptian Drug Authority's (EDA) website. This service allows users to register details of missing medications.

Based on his personal experience, Maher received a call four hours after registering the medication details, informing him of the names and addresses of pharmacies where the medication was available.

Exchange rate fluctuation impact The change in the exchange rate has placed a significant strain on pharmaceutical production due to mandatory pricing, resulting in medication shortage in the local market, Mohie Hafez, a member of the board of directors of Chamber Industry of Cosmetics & Medical Supplies, told AO.

Since 6 March, when the CBE applied a new wave of the local currency devaluation against the US dollar, the Egyptian pound has lost about 55 percent of its value against the dollar. Accordingly, the US dollar rate rose from EGP 30.9/ $1 to EGP 47.97/ $1.

Hafez explained that manufacturers face potential losses if they produce at current prices without any adjustments.

Consequently, many factories have halted production until price adjustments are approved, enabling them to supply medications as needed. Despite attempts to continue production amid the pound devaluation, price increases for medications have not kept pace with the dollar's rise.

The pharmaceutical industry relies heavily on imports to provide its inputs. It imports about 95 percent of its raw materials, including active ingredients directly imported and inactive ingredients occasionally sourced from importers, as well as packaging materials, said Dr. Hisham Hajar, a member of the board of directors of the Chamber Industry of Cosmetics & Medical Supplies.

"Local production meets about 91 percent of the market's needs and exports to 80 countries, making it a vital national industry,” Hafez noted.

Around 160 factories operate in the local market, with many more under construction yet to become operational. Egypt's total exports of human pharmaceuticals and medical supplies during the first quarter of 2024 amounted to about $432.2 million, according to the EDA chairman Ali El-Ghamrawy.

The pharmaceutical market size grew to over EGP 215 billion in 2023, compared to about EGP 40 billion in 2014, according to EDA’s data.

Meanwhile, Egypt's imports of pharmaceuticals and medicinal preparations decreased by 6.9 percent in the first three months of 2024, recording $751.38 million compared to $807.60 million during the same period in 2023, a decline of $56.22 million, according to the foreign trade bulletin of the Central Agency for Public Mobilization and Statistics (CAPMAS).

Shortages in trade names Hafez told AO that shortages range between 20 and 40 percent of drugs' trade names, while equivalent drugs (generic versions) are more available, as shortages in active ingredients range between 15 and 20 percent.

Minister of Health and Population Dr. Khaled Abdel-Ghaffar pointed out that guests from Gaza and Sudan have impacted production supplies and the basic raw materials for the pharmaceutical industry due to increased demand and constant supply levels.

He added that the increase in drug prices will range between 30 and 35 percent.

Difference between equivalent, alternative drugs As per EDA, an equivalent drug contains the same concentration, active ingredient, and pharmaceutical form but is produced by a different company.

An alternative drug, however, contains a different active ingredient, concentration, or pharmaceutical form but is used to treat the same condition.

Shortages for 2 more months An agreement was reached about a month ago after discussions with the EDA, the cabinet, and producers to adjust the prices of approximately 20 percent of medications over three months by 15 percent to 40 percent, with the lowest increases for chronic disease medications.

The market will need about two months to recover from the medication shortage once factories start producing drugs at the new prices, enabling continuous operation.

Prime Minister Dr. Mostafa Madbouly stated in a conference that the government has agreed with pharmaceutical companies to implement very calculated and acceptable price adjustments for medications in the coming period.

He said the EDA has reached an agreement with pharmaceutical companies to apply calculated and predetermined price adjustments for certain groups of medications until the end of 2024.

This measure aims to ensure the return and availability of medications without shortages soon.