Friday, 7 May 2010

Egypt - Why are patient groups against the new drug pricing system in Egypt?

They believe that the prices of new branded and generic drugs will increase by a substantial margin.

Cairo’s Court of Administrative Justice was expected to issue a decision on the suspension of the Ministry of Health’s new pricing decree in April 2010. A local patients’ rights group filed a lawsuit against the new drug pricing decree in October 2009. This decree effectively establishes a new drug pricing system. However, this decree liberalises rather than controls drug prices in Egypt. Indeed, the new pricing system makes drug prices dependent on market forces in other countries which have different macroenvironment conditions. As a result, drug prices could increase to levels which would not be affordable for the majority of the population.

The new decree establishes two new pricing systems for new medicines registered in the market, one for branded pharmaceuticals and one for generic drugs. The price of branded drugs will be 10.0% lower that the cheapest retail price of the drug in the countries in which is available; the decree uses 36 reference countries. However, the drug does not need to be registered in all 36 countries. The price of generic drugs will be a fixed percentage markdown on branded drugs, and therefore is expected to increase as a result, as generic drugs used to be between 80% and 90% cheaper than branded drugs.

Further reading - A detailed review of the Egyptian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Egypt (published April 2010)

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