Egypt is raising the price of medicines under EGP 30 by 20 percent in an effort to tackle a shortage in supply driven by rising costs, health minister Ahmed Emadeddin said during a press conference at the cabinet on Monday.
The decision is effective immediately and producers that do not provide the drugs could now face the termination of their practice licences, Emadeddin was quoted as saying by Ahram Arabic news website.
“It is a good first step without which the sector would have collapsed,” said the head of the Chamber of Pharmaceutical, Cosmetics and Appliances of the Federation of Egyptian Industries (FEI) Ahmed El-Ezaby, who claims that the government’s decision was reached following discussions with the chamber.
El-Ezaby said that a minimum increase of two pounds for drugs pricing at below EGP 10 will be applied.
Neither the cabinet nor the health ministry spokespersons were reachable for comment.
“When were discussing the [price hike] decision, we had our eye on the drugs that are sold for less than EGP 10, for which an increase of 20 piasters or so would not solve the problem,” he explained.
There are currently 1,730 drugs missing from the market, said El-Ezaby, of which 600 are without alternatives.
The inability to source hard currency to import raw materials in past months and the sharp devaluation of the pound against the dollar in mid-March brought the crisis to a head, said El-Ezaby.
“There has been a complete shortage of dollars made available by the banks to meet the import needs of pharmaceutical companies as of about two months ago,” due to the approach of the holy Islamic month of Ramadan, when the focus was on food imports, he said.
The pharmaceutical sector sees EGP 50 billion in sales revenue annually, of which EGP 40 billion are from locally-made drugs, according to El-Ezaby.
However, local drug manufacturers rely heavily on imported raw materials.
The move is the widest-reaching overhaul since Egypt partially adopted a new international reference pricing system over a cost-plus system in 2012, according to El-Ezaby, although there have been incremental increases in the prices of certain drugs by the government over recent years.
source: Ahram Online