PRESENCE OF MULTINATIONALS GROWS IN EGYPTIAN DRUG MARKET

As modernisation continues in the Egyptian drug industry, the market presence of the leading multinationals is growing. There are now four major foreign drugmakers among the top five companies, although local production still accounts for 90% of market volume.

On a population basis, Egypt is the Middle East's largest drug market. However, many foreign companies have been cautious due to tight price controls imposed by the Ministry of Health and the devaluation of the Egyptian currency, which left many firms unable to recover costs.

However, the outlook looks set to change. The re-elected Egyptian administration claims to be committed to liberalising the economy. As a result, one leading US company recently announced that it is to expand its US$18mn production facility near Cairo, representing a significant long-term commitment.

Most of the multinationals are active in the Egyptian market, but few have a direct manufacturing presence, preferring to import drugs or license production to local firms. Meanwhile, poor data protection laws continue to discourage investment. The government is unlikely to harmonise patent law with international standards any time soon, as it is keen to protect the local sector and maintain supplies of low-cost drugs.