The drug market.. The public sector is out of the competition and the private sector accounts for 90% — Egypt 360

The pharmaceutical industry and trade in Egypt takes the lion’s share in the world of business, as it is a popular trade that is monopolized by major companies. The pharmaceutical industry is one of the strategic commodities that are no less important than food and petroleum products.

Private and foreign companies control 90% of the total production in the market The Egyptian medicine is obsessed with the higher-priced items. While the production of public sector companies is only 5%, and they produce the lowest prices.

The “toll” system plays a major role in the drug industry and is responsible for the waves of drug shortages that Egypt has experienced and is still suffering from. Altool are the offices that have licenses from the Ministry of Health and Population, represented by the Pharmacy Department. To enter the so-called “box” or fund. Which includes dozens of varieties similar to the original medicines, which are allowed to be manufactured locally. But these offices do not own the factories, so they contract with pharmaceutical factories to produce their medicines, which is known as “manufacturing for others.”


The “tool” is a type of brokerage, whereby they book files in boxes of medicines, and then offer them for sale with the aim of making a quick profit. Toll offices struggle to buy new drug registration files. In return for paying EGP 25,000 to the Central Administration of Pharmacy at the Ministry of Health. Then you put it back for sale at fantastic amounts, as happened at the beginning of the manufacture of the drug “Sovaldi” locally. The selling price of the Sovaldi manufacturing file amounted to 7 million pounds at that time. Because the box is full and there is no opportunity to register.

According to Dr. Osama Rostom, Vice President of the Chamber of Pharmaceutical Industry, the number of “toll” offices reaches 1,300, manufacturing their products in 154 pharmaceutical factories operating in Egypt. While the number of those who are serious in production does not exceed 300 offices out of 1300.

He pointed out that there are between 55 to 60 factories that are still under construction or ready for production, and that they cannot find a place in the medicine boxes for registration. While nearly 1,000 Toll companies have a monopoly on pharmaceutical files to make profits through brokerage.

Reopen licenses

Meanwhile, Dr. Ali Auf, head of the Medicines Division in the General Federation of Chambers of Commerce, criticized the Ministry of Health and Population. The case of the attack on the tul companies, saying: The ministry is oppressing small investors in favor of the big ones. It pretends to be concerned about the patient’s interest, while its performance reveals a clear encouragement of monopoly.

Auf affirmed that the restriction on small companies and the suspension of their licenses are in accordance with Resolution No. 9 of 2015. Which suspended the licensing of Altol companies. It comes in favor of the major manufacturers who dominate the market that control production and opens the door to Bir El Salam factories for the production of medicines. He referred to the Ministry of Health, which raised the costs of registering items in packets from 30 thousand pounds to one million. What led to the popularity of the weed trade. And he prompted companies to register many types of medicines in the Institute of Nutrition, which he takes out of the pricing committee for the free market according to supply and demand.

He explained that the big companies are fighting these small companies to monopolize and control the market. He cited what happened in the penicillin crisis that Egypt was subjected to in the second half of 2017. When a company that was covering 80% of market consumption and supplying it with four million imported packages of long-acting penicillin, stopped. Meanwhile, four companies produce 2 million packages locally, which inflames prices.

Auf added that Altol companies are present in most countries of the world, which were distinguished in the pharmaceutical industry. He pointed out that Egypt has achieved enough of the drug “Sovaldi” that treats hepatitis C, after the state allowed the opening of registration for these companies through the Tol system. The price decreased from 25 thousand dollars to 14 thousand pounds, and with the increase in registration, prices reached 400 and 200.

market size

The head of the pharmaceutical division of the General Federation of Chambers of Commerce revealed that the number of pharmaceutical factories in Egypt is 154, of which 30 factories control 90% of the volume of the Egyptian drug market. While the holding companies cover about 5% of the market, and the remaining 5% is shared by the rest of the companies, explaining that there are about 20 factories that cover their production costs. And about 90 losing factories, and at least 300 unlicensed companies engaged in the production of some preparations such as slimming tea and the like. With permission from the National Institute of Nutrition.

He pointed out that most of the Tul companies are sub-owned by major companies; To allow it to benefit from the pharmaceutical files allowed for each company to produce multiple items. To increase its profits, stressing that reopening the licensing door for Al-Toul Company will eliminate the problem of shortcomings, and will be in the interest of the Egyptian drug market.

manufacturing crisis

Dr. Raouf Hamed is a professor of pharmacology and toxicology at Alexandria University and former head of the Drug Control Authority. He believes that although Egypt is one of the largest drug exporters in North Africa with a value of $500 million between 2019 and 2020. However, companies working in the field of drug manufacturing lack a strategy for research and disinfection from his point of view, and this is due to the reliance on importing the substance effective. Where research is limited to the developmental type more than the applied in the absence of cooperation between universities, companies and research centers.

Hamed attributed the reasons for the confusion of the pharmaceutical industry in Egypt to the absence of cooperation between companies and each other with regard to research and intellectual property. Raouf told 360, “We need a research strategy in the application and other sectors, and provide economic incentives that help compete.”

Performance notes

Raouf took several observations on the pharmaceutical industry in Egypt. First: The conditions of the manufacturing companies are relatively late and do not move quickly with the future technology.

Second: The weakness of the national capabilities, which he described as impotent due to their reliance on people of trust, not on people of experience, and the prohibition of dissenting opinion. Although Egypt entered the pharmaceutical industry in 1939, it did not achieve an advanced achievement in it compared to a country that entered later, such as India. Which began in 1954, but preceded us in this field.

Third: strategic errors produced by some drug policy decisions in the 1980s. As the number of factories must be parallel to the increase in population and accompanied by technological development.

Fourth: The industry was exposed to fatal errors as a result of opening the door wide to the private sector despite its importance in his view. His upbringing without planning was what Raouf considered “random,” as well as the presence of administrative errors in the government sector, where the company’s president was held accountable for the financial portfolio, not the achievements. Where the Chairman of the Board of Directors worked in favor of increasing his financial portfolio, such as buying raw materials from abroad and not thinking of producing them.

Fifth: It also allowed the chairmen of the board of directors to establish private companies from within the public sector before they retire.

Sixth: The non-compliance of multinational companies in Egypt that claim that the cost of local production needs 500 billion dollars. While the real cost from Hamed’s point of view is from 50 to 70 billion dollars only because in Egypt we have reliable mechanisms such as the availability of some resources, including labor and agricultural land.


Hamed blamed the government and said that it is responsible for attempts to weaken drug control, especially after integrating oversight and scientific research represented by the Institute of Drug Research. Which was established in 1963 and concerned with drug research with the supervisory authority of the Ministry of Health and called them the National Authority for Drug Research in 1976. He considered it a fatal blow to industrialization.

Mohamed Abdel-Zaher, Professor of Law, Beni Suef University, Secretary-General of the Egyptian Association for Political Economy, Statistics and Legislation. He believes that the protection of intellectual rights is a necessity for the production of raw materials and production inputs in the field of drug manufacturing.

He pointed out that the Intellectual Property Protection Law of 2002, in its fourth book, stipulated the protection of items. Compulsory classification systems were organized with the aim of developing and developing the effectiveness of inventions and plant varieties, known as “plant heritages” on which major countries rely in the manufacture of chemical compounds. He demanded that it be protected as it is a major component in the pharmaceutical industry, and that registering intellectual property for these types is a necessity, as major countries do.

drug pricing

Dr. Tharwath Hajjaj, head of the Pharmacies Committee at the General Syndicate of Pharmacists, explained that the pricing chaos and price hikes have no control over pharmacies because the pharmacy receives an official priced product and cannot change it. Noting that any medicinal product is subject to the evaluation of the pricing committee of the Medicines Authority, where the owners of the producing companies submit requests to move prices based on reasons that the committee deems reasonable, and it agrees to raise.

Hajjaj criticized what he considered a lack of transparency in moving some of the most selling and most expensive items in light of the availability of the same items that have not been moved for many years. Which leads to great losses for the producers and they are forced to stop their production, which is in the interest of the higher price.

Hajjaj believes that the justifications for raising prices are illogical, because the production inputs are the same in all companies. But the increase is mostly in favor of certain types of companies over others. Placing the responsibility on the doctors also in promoting the higher-priced items, as he writes the medicine under its trade name on the patient’s prescription and not in its scientific name. So as not to give the pharmacist the freedom to choose an alternative or offer other types of the same type.

Hajjaj considered this a deliberate approach in coordination with the companies producing these types, from which the doctor obtains percentages in return for writing them or relying on them.

Hajjaj demanded the establishment of a fixed standard for the combinations of items that are calculated on the cost price and to achieve a profit margin that applies to everyone. So as not to put pressure on small and national companies, so they are forced to stop some important items in the treatment of heart, pressure and diabetes.

Nutritional supplements

Hajjaj told 360 that more than 35% of all types of medicines in Egypt are registered as nutritional supplements at the Institute of Nutrition to liberalize their prices. Including some types of medicines for coughs, liver treatment, and colic, hypnotic heart medicines, based on the fact that its components are not a chemical substance. Including also vitamins (omega 3, calcium and vitamins C) and all Corona supplements.

Expectations of an increase in the crisis

Meanwhile, Dr. Ali Abdullah, director of the Center for Drug Studies, expected an explosion in drug prices during the coming period due to the repercussions of the Russian-Ukrainian war. And the dependence of pharmaceutical manufacturing companies in Egypt on raw materials that are imported from abroad.

Abdullah attributed the shortage crisis to companies stopping the production of these items because the commercial factor does not make a profit, or because the raw material does not exist, or because its release at customs was delayed. He pointed out that there is a shortage in the number of pharmacists working in customs, which delays the release for a period of up to two months.

Abdullah told 360 that the public sector is out of competition and that its production does not exceed 3% from his point of view, despite the presence of 8 companies working in the manufacture of these medicines (Al-Nasr, Memphis, Al-Arabiya, Cairo, Sayed, Nile, Alexandria) compared to 200 private factories in Egypt.

Facing the crisis

For its part, the government submitted to Parliament amending some provisions of Law No. 127 of 1955 regarding the practice of the profession of pharmacy. Where the organization of commercial agency work and some commercial mediation work to a joint committee of the Constitutional and Legislative Affairs Committee, and the Office of the Health Affairs Committee.

Another amendment was made to a project to amend some provisions of the law regulating commercial agency work and some commercial mediation works promulgated by Law No. 120 of 1982.

The draft law aims to address the expansion in the areas of work of commercial agencies and commercial and real estate brokerage. By introducing new rules regulating cases in which many developments have taken place that require reorganizing them in some detail. With the aim of deciding objective and procedural provisions and controls that contribute to tightening control over those activities that have expanded significantly, especially the real estate brokerage activity.

Ali Abdullah criticized what he considered to be ignoring the Pharmacists Syndicate to present the draft law to it for discussion and to put forward a societal dialogue before its issuance. He said: “As long as the government is the one who put it forward, it has an intention to issue it soon, without discussion.”

Correct path

Abdullah pointed to the need to restructure the real estate market, as there are hundreds of losing items that must be re-priced to compete and reproduce. To confront the private sector takeover and break the monopoly of manufacturing, the state must restructure its companies, as happened in the production of Sovaldi.

Raouf Hamed called on the Drug Control Authority to undo what he described as the policy of demolition; Because it is a national entity that is impossible to rebuild. And to remain a scientific oversight entity affiliated with the Council of Ministers, or even under the umbrella of the new authority.

He also called for the integration of scientific disciplines related to the pharmaceutical industry together, such as pharmacy, veterinary medicine, agriculture, medicine and engineering, in order to achieve integrative research.

Hamed stressed the need to develop strategic alliances between national, private and public foreign companies, to establish a Supreme Council for Medicine, whose mission would be to make policies and strategies. This council consists of experts in all fields of medicine, and its work is conducted under the umbrella of the President of the Republic, with the assistance of the Presidency of the Government.

Ali Auf Ali stressed the necessity of reopening the licensing door for the toll companies, because it would eliminate the problem of shortcomings. It will benefit the Egyptian drug market, eliminate real estate fraud, contribute to breaking the price sharpness, and create real competitive opportunities.

He called on the Ministry of Health to review the papers of these companies and those who did not play their real role in serving the drug market and the Egyptian economy. It resorts to trafficking in pharmaceutical files and “roofing” them by withdrawing files from non-producing companies. Which operates safety in medicine boxes «boxes» at the expense of other companies looking for medicines and do not find what they produce.

In addition to the review by the Ministry of Health of the files that are registered for the same formulations and at different rates, in order to register duplicate medicines. In addition to opening the boxes wide to register medicines and not specify them in 12 trade names to allow the opportunity for new factories and companies. In entering the market, investing, and participating in filling the gap in the deficient pharmaceutical items. Accountability of the negligent Auf pointed out that the law allows for the withdrawal of licenses from companies licensed to produce a medicinal brand that has not been produced for a period of 18 months.

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