Egyptian patients are being faced by higher drug prices and a shortage of some medicines as the depreciation in the value of the Egyptian pound against the US dollar has caused problems for the country's pharmaceuticals industry. Early in January, the Ministry of Health approved an increase in the prices of 38 medicines, of which 30 were produced by the Holding Company for Pharmaceuticals. The decision came after pharmaceutical companies suffered losses due to price caps imposed by the ministry, which are lower than their production costs. The price increases ranged from between LE0.25 to LE1.5. Public pharmaceutical companies incurred losses of some LE128 million in 2011/12, Al-Ahram reported. “The price hikes are an inevitable consequence of the increase in dollar rates,” Makram Mahanna, head of the chamber of pharmaceutical industries at the Egyptian Federation of Industries, told Al-Ahram Weekly. “Higher dollar prices have caused an increase in the prices of imported raw materials,” he added. Mahanna said that the production costs of drugs had increased because of a hike in the prices of inputs such as raw materials and water, and he pointed out that water prices had increased by more than 50 per cent. “In this case, the prices of drugs will have to increase, and we should accept that increase,” Mahanna said. Technical director at Global Napi Pharmaceuticals, Peter Makram, said that higher dollar rates were making it more difficult for pharmaceutical companies to import their needs. The shortage of dollars had prompted banks to stop supplying pharmaceutical companies with needed foreign currency, causing the companies to buy dollars on the black market. “This is causing extremely high production costs,” Makram said. “Besides, the amount of dollars available on the black market is not enough to meet the needs of the pharmaceutical companies.” Though higher dollar rates and consequent higher production costs have caused some shortages in the market, Makram believes that more shortages could be seen in the future should dollar rates continue in the same direction. Shortages had not been widely felt because of drug stocks that were large enough to last for four to five months. “I hope the dollar problem will be solved soon, or we will start witnessing future shortages,” he said. Mahanna said that already there were shortages of some medications, and patients were complaining that they could not buy them. One owner of a pharmacy store in the Dokki area of Cairo said that many pharmacies in the city were suffering from shortages of some medicines. Shortages of eye-drop medications were particularly evident, he said. The owner attributed the shortages to higher dollar rates, which had resulted in import problems and costlier raw materials. However, he expected the shortages to end soon. Makram attributed the shortages to the fact that the production costs of drugs were much higher than their selling prices and the ministry of health was not flexible enough in increasing drug prices due to political pressures. The low prices of some drugs had hampered the ability of many companies to continue producing them, Makram said, adding that the price increases approved by the ministry on 38 medicines were small, and they would not help the pharmaceutical companies much in the light of the current high dollar rates. The prices hikes are not expected to affect demand for the drugs concerned. “It is better for the patient to find the medicine, albeit at a higher price, than not to find it at all,” Mahanna said. In order to avoid future drug shortages, Makram said that the pharmaceutical companies should be given preferential treatment in acquiring dollars from the banks, and it should be made easier for them to obtain dollars to facilitate imports. The companies have also asked the health ministry to start looking into the prices of drugs that were priced 20 years ago. “There are some drugs that have not been repriced since 1980 or 1990, when the dollar exchange rate was LE3.3,” Makram told the Weekly. “The prices of these drugs have not increased since then.” Makram pointed out that the prices of drugs in Egypt were the cheapest in the region. The average price of generic drugs in the country ranges from LE6 to LE7, he said. Egypt imports only about 18 per cent of its pharmaceutical needs, while the rest is produced locally.
