Egypt pharmaceuticals market: $5 billion industry by 2020

Press Release   •   Feb 22, 2013 14:08 GMT

The Egypt pharmaceutical market is expected to grow from a value of approximately $2.8 billion in 2011 to $5.3 billion in 2020. This suggests a CAGR of around 7.2% between 2011 and 2020. The main drivers for growth in the Egypt pharmaceutical market include the rising incidence of a number of chronic diseases, and a growing and unmet need. During 2010, domestic manufacturers accounted for around 35% of the pharma market in Egypt, producing mainly generic drugs.

On October 2, 2012, the government proposed a new universal healthcare law which will provide health insurance coverage to the entire Egyptian population. Previously, in May 2011, the government introduced new pricing policies to link the price of pharmaceuticals with international prices, which will increase the value of the Egyptian pharmaceutical market.

The medical device sector is experiencing steady growth. It was valued at $766m in 2011 and is expected to grow at a CAGR of 3.8% from $789m in 2012 to $1.1 billion in 2020. In 2011, the main segments in the market were nephrology and urology devices (23.9%), in vitro diagnostics (13.2%) and diabetes care devices (9.1%).

In 2011, with a population of approximately 80 million, Egypt was the most populated country in the Arab region, having grown at an average rate of 2% per annum over the past few years. The urbanization rate has also increased significantly, and it is estimated that the 53% of the population will be living in urban areas by 2020. The working-age population accounted for approximately 62% of the entire population in 2011 (CAPMAS, 2012c).

The improvement in the overall level of education and a large working-age population provides a suitable platform for national economic growth. However, sociopolitical transition and the resulting instability in the last couple of years have prevented the emergence of clear economic policies. The unemployment rate has increased significantly from 8.7% in 2008 to 12% in 2011 (The World Bank, 2012p). Poor infrastructure and a lack of new employment generation programs from the government have had a negative impact on the country's economic growth.

The Egyptian Drug Authority (EDA) is the main regulatory authority for pharmaceutical products and medical devices and works under the Ministry of Health and Population (MoHP). The Central Administration of Pharmaceutical Affairs (CAPA) is responsible for issuing licenses for the manufacture, sale, import and export of drugs or medical devices, following evaluation and investigation. The National Organization for Research and Control of Biologicals (NORCB) is responsible for regulating clinical trial approval.

In 2008, the government introduced a new 120-day streamlined drug registration system for drugs carrying US Food and Drug Administration (FDA) or European Medicines Association (EMA) approval. The government has also made significant progress in strengthening the intellectual property rights regime and enforcement procedures. Egypt has been a member of the World Trade Organization (WTO) and a signatory to the Trade-Related aspects of Intellectual Property Rights (TRIPS) agreement since 1995, and so its intellectual property rights regime is in line with international standards. The government is also planning to update its pharmaceuticals law, which dates back to 1955, to include the provision of high penalties for cases of counterfeit medicines.

Healthcare spending decreased to 4.7% of Gross Domestic Product (GDP) in 2010 from 5.2% of GDP in 2005 (The World Bank, 2012f). The public sector accounted for most of this decline. Although it accounts for the bulk of hospital care in Egypt, its share in total healthcare expenditure has been declining steadily, leading to inadequate financing and poor maintenance of healthcare facilities. Most of the public-sector hospitals are administered by different governing bodies such as the Ministry of Higher Education, the military, and the Health Insurance Organization (HIO). Their lack of co-ordination and the inadequate number of healthcare staff due to low wages are the main reasons for the poor functioning of the public healthcare sector.

In 2012, approximately 57% of the total Egyptian population (48 million people) was covered by various health coverage schemes. Approximately 45% is covered by public insurance, mainly provided by HIO, and the remainder by private insurance (MoF, 2012b). In Egypt, the penetration of private insurance remains low, mainly due to diminishing purchasing power and high rate of poverty (USAID, 2009a).

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