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The Egyptian Pharmaceutical Industry

The Egyptian pharmaceutical industry is considered one of the oldest strategic industries in the country. It was founded in 1939 with the establishment of Misr Company for Pharmaceutical Industries. The industry developed slowly between the 1960s and 1980s, following nationalization schemes which brought the industry under full government control. With the launching of reform programs in 1991, pharmaceutical companies gained greater autonomy and an increasing number of private sector companies entered the market. At present, there are 30 pharmaceutical-producing companies of which eight are public and 22 private.

The Egyptian pharmaceutical market was valued at LE 4.1 billion in 1999, 94 percent of which is covered by locally produced products. Egypt is the largest producer and consumer of pharmaceuticals in the MENA region, contributing to 30 percent of supply in the MENA market. The MENA region also absorbs most of Egypt’s pharmaceutical exports, which represent approximately 6 percent of total production. The United States plays an active role in the industry through its contribution to foreign direct investment and pharmaceutical imports.

Internal challenges facing the pharmaceutical industry involve the regulatory framework, quality assurance tests, research & development, market fragmentation, limited health-insurance coverage and the presence of production contracts. External challenges involve the implementation of GATT and TRIPS as well as global competition.

Despite these challenges, the Egyptian pharmaceutical market is expected to grow at an accelerated rate to reach LE 5 billion in 2002. Strong investment opportunities exist in therapeutic groups and application of e-commerce is starting to develop. Nonetheless, removing challenges faced by the industry will, no doubt, accelerate performance and improve the overall outlook.

This study provides a general overview of the Egyptian pharmaceutical industry in terms of its structure, market profile, the current challenges, future outlook and investment opportunities. It serves as an indicator to the current and expected performance of the industry for potential investors. Moreover, the study recommends certain guidelines to face internal and external challenges and boost industry performance.

Sector Highlights

• The private sector dominates over three-quarters of the local market

• The five largest pharmaceutical companies dominate approximately one-third of the market

• There are eight multinational corporations operating in the industry, which account for over one-third of total private sector sales

• Egypt is the largest producer and consumer of pharmaceuticals in the MENA region, with one-third of the MENA market

• The United States plays an active role in the industry through its contribution to investment and imports

• Local production covers approximately 94 percent of the domestic market

• Europe supplies the lion’s share of Egypt’s pharmaceutical imports

• Exports comprise approximately 6 percent of pharmaceutical production

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