As Egypt rolls out Universal Health Insurance with the aim of achieving full coverage between 2030 and 2035, the domestic pharmaceutical market stands to see significant long-term shifts. As self-medication is currently the cheapest form of treatment, out-of-pocket expenditures make up 62 percent of total health expenditure; a number which is expected to drop only slowly during the implementation of universal healthcare.
Innovation has to be rewarded. There is no sustainability for unrewarded innovation
AstraZeneca’s country manager Khaled Atef Elmounayri highlights that, “there is no doubt that the Egyptian government is interested in cost savings and hence generics companies are on the rise. We are seeing new players launching new products and gaining market share very quickly.” While the sales of patented drugs are currently outgrowing those of generic drugs, the market is expected to eventually shift towards generics, given their cheaper price tags, and the government’s willingness to maintain cost-containment measures. Atef Elmounayri therefore foresees, “strong competition between generics and innovative companies.”
Part of this increasing rivalry is the intellectual property disputes to which Egypt is no stranger. Despite signing the WTO’s Trade-Related Aspects of Intellectual Property Rights Agreement in 1995, in 2002 Pfizer Egypt’s Viagra was on the market just two months when the Ministry of Health announced it would authorize 12 local companies to produce a generic version of the drug to sell at one-twentieth of Pfizer’s market price of about USD 5.20 per pill.
More recently, in 2014, the Egyptian Patent Office decided that Gilead’s revolutionary, high-priced treatment against Hepatitis C (sofosbuvir) did not merit patent protection. As a result, local Egyptian companies started producing the drug, not only providing patients, and the government, with cheaper versions, but also creating competition, which forced originator companies to reconsider their prices.
According to experts, diluting the protection of such prominent drug rights may hurt Egypt’s efforts to lure foreign investment and expand trade opportunities; a notion that is shared by multinational innovators present in Egypt. Astellas Egypt cluster head Ayman El Deeb argues that, “Egypt’s weak patent protection laws make the market less attractive for MNCs.” Astellas in particular has suffered from weak intellectual property (IP) rights in Egypt as El Deeb explains: “I have seen a generic being launched in the market prior to the innovative product, which is not the case in the majority of the world.”
Janssen’s managing director Rahmez Mohsen agrees with El Deeb, stating that, “innovation has to be rewarded. There is no sustainability for unrewarded innovation.” However, he does not see an issue in the country’s IP laws, noting that, “Egypt needs to put in place laws that already exist; we do not need new laws, just stricter implementation. It is our responsibility to educate about the value IP protection can bring to the country. We want to put intellectual property on the agenda board of the government through communication and education and also showing data on how IP protection brings benefits for the patients.”