Boston, MA -- (ReleaseWire) -- 02/23/2013 -- BMI View: As anticipated by BMI, Egyptian President Mohammad Morsi's relative success in his first 100 days in office highlights a degree of political and economic stability, which we believe has resulted in a final resolution of the medicines pricing system. We highlight that our expectation of the government imposing pharmaceutical price caps and adopting a controlled, low-pricing strategy has played out. The new pricing system sets the prices of medicines higher than the old cost-plus system and BMI maintains this will be good for multinational companies in the medium term. However, the dangers of a possible downward pricing spiral, due to the interdependence of countries in the reference pricing basket, is a long-term risk to multinationals' revenues.
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Headline Expenditure Projections
- Pharmaceuticals: EGP18.23bn (US$3.07bn) in 2011 to EGP20.41bn (US$3.37bn) in 2012; +12.0% in local currency terms and +10.0% in US dollar terms. Forecast broadly in line with Q412.
- Healthcare: EGP62.22bn (US$10.47bn) in 2011 to EGP69.74bn (US$11.53bn) in 2012; +12.1% in local currency terms and +10.1% in US dollar terms. Forecast broadly in line with Q412.
- Medical devices: EGP3.20bn (US$538mn) in 2011 to EGP3.65bn (US$603mn) in 2012; +14.0% in local currency terms and +12.0% in US dollar terms. Forecast broadly in line with Q412.
Risk/Reward Rating: In our latest Pharmaceutical Risk/Reward Ratings (RRRs) for the Middle East and Africa (MEA), Egypt again ranks 11th out of the 30 regional markets surveyed. Egypt's risks score remains below the regional average, in contrast to its more favourable rewards component. Globally, Egypt remains 56th out of 95 markets, between Kazakhstan above it and Morocco below.
Key Trends And Developments
- In October 2012, Egyptian company Advanced Pharmaceutical Packaging was reported to be constructing an anaesthesia ampoules plant in Alexandria, according to the vice president of the Egyptian Association for Financing and Investment Studies, Mohsen Adel. The plant will be the first of its type in the Middle East and North Africa. Through the new facility, the company aims to achieve self-reliance in its products, which will be packed and manufactured in Egypt, Adel said. The plant, involving a construction cost of about US$10.6mn, will cover an area of more than 10,000m2.
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