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)

Russia - Will generics continue to dominate the Russian pharmaceutical market?

The Russian government has developed an initiative to help boost the domestic production of innovative pharmaceuticals, which could ultimately lead to generics losing market share.

Currently, Russian manufacturers mainly produce inexpensive, low technological products; a strategy for encouraging growth in the local pharmaceutical industry for the period up to 2020 envisages the government helping local producers to cover the costs of the R&D that is required to boost production of innovative pharmaceuticals. If the objectives of the plan are realised, by 2020, the local industry will be responsible for 50% of drugs in circulation (compared with 5% in 2007), 80% of which will be innovative.

The modernisation of the local pharmaceutical industry will ensure the replacement of foreign generics with Russian equivalents and ultimately by innovative drugs of Russian origin. However, the setting up of innovative production will be a long process requiring substantial investment. Slow economic growth will remain an obstacle to funding in the short term at least. In addition, generics will remain a popular alternative to the more expensive branded pharmaceuticals whilst the country recovers from the economic downturn.

Further reading - An in-depth review of the Russian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Russia (published January 2010)