Drug prices set to increase

The prices of around 3,000 drugs and medicines are set to increase by between 25-40 percent, with the Egyptian Drug Authority (EDA) due to notify pharmaceutical companies to hike prices this week, said an official from the Pharmaceuticals Division of the Federation of Chambers of Commerce speaking to Mada Masr on condition of anonymity.

Several key drugs and medicines are constantly absent from pharmacy shelves, as years of dollar scarcity and inflation have made it hard for pharmaceutical companies to import raw materials. Companies reportedly began to request permission to re-price their products following the latest currency devaluation.

The chamber of pharmaceuticals industries at the Egyptian Federation of Industries has submitted requests to the EDA to increase the prices of 3,500 drug items, according to Mohamed Fouad, head of the Egyptian Centre for Rights in Drugs. Each company requested it raise the price for 25 percent of its medication lineup as a first stage.

Fouad noted that medications for immune diseases, blood and diabetes, as well as others for oncology, corneal, hypermobility and multiple sclerosis, are not available on the market.

The pharmaceuticals division source from the chambers of commerce said that the federation forwarded the companies’ requests to the EDA’s technical committee, which is responsible for the re-pricing of domestically produced drugs, and the technical committee ultimately took a decision to move ahead with the price increases after looking into the issue during its weekly meetings.

Mohamed al-Bahy, a consultant to the Federation of Egyptian Industries’ pharmaceutical division, said that the authority's decision was delayed despite repeated appeals, with a large number of medications — totaling 28,000 items — needing re-pricing.

According to Bahy, a lack of raw materials due to shipping costs is behind the pricing crisis. Shipping costs have increased due to political developments in the region, he said, such that shipping costs now surpass the cost of raw materials. Even factories which have managed to import raw materials have been unable to secure the necessary banking documents to release goods from ports, meaning that late fees for keeping goods in ports also increase.

Dollar scarcity since 2022 has hampered Egypt’s import-dependent market, with goods accumulating in ports, and many companies shuttering as banks have been unable to issue credit to support payment for shipments.

An influx of dollars over recent weeks amid a joint bailout from countries and institutions ballasting the economy was expected to relieve the situation.

But Bahy notes that due to a series of devaluations of the Egyptian pound — the last one implemented in March to satisfy the conditions of Egypt’s loan program with the International Monetary Fund — it is now more expensive for companies to pay for customs to release incoming import shipments. Some drugs have expired while being stored at customs.

This series of devaluations has also caused companies to flood the EDA with price change requests, becoming a major issue in the past few years. The crisis made it standard practice for pharmaceutical companies to try to skirt the EDA’s stringent pricing mechanisms by offering products that are labeled food supplements, but are essentially the same in composition and serve the same medical function as regular medications, in order to be subject to another state body’s pricing mechanisms.

If consumer prices are not increased, the only alternative would be to stock imported versions of the drugs at double the cost, Bahi said, adding that as many as 190 factories are facing significant losses due to the recent currency devaluation.

Increasing prices will not ensure that the drugs remain available in the market over the long term, Fouad noted. During a similar set of conditions in 2017, the government raised the prices of 3,010 drug items when the pound was fixed at LE18 to the dollar. Yet with dollar inflows still weak and prices rising worldwide, Fouad said that the pharmaceutical drug crisis is likely to recur.