Egypt has the least percentage of drug fraud
EGP 90m worth investment of Delta Pharma Bio
By Mahmoud Hammad
In an exclusive interview with MEO, Dr. Mohy Hafiz, Managing Director of Delta Pharma Bio and Head of Health and Drug Committee at Egyptian Union for Investors Associations, says that Delta’s investment is valued at EGP 90m. It has been established for 5 years. According to Hafiz, Egypt suffers from 3 to 5 per cent of drug fraud, which is considerably less than the average fraud in other countries, 10 to 15 per cent. Furthermore, he asserted that Egypt is a leading figure in drug manufacturing since 1934; however, it only exports drugs worth $600m which is less than Jordan; Jordan exports drugs estimated at $2.4bn.
Can you tell us more about Delta Pharma Bio?
Delta Pharma Bio operates in the drug industry; its stakeholders are all Egyptians.
What is the average of drug fraud in Egypt?
The average of drug fraud in Egypt is 3 to 5 per cent, which is less than the average drug fraud in other countries, 10 to 15 per cent. It is worthy to note that 60 per cent of drug fraud in Egypt is caused by smuggled drugs coming from other countries. Tramadol seizes the largest percentage of smuggled drugs.
How do you view the recent 20 per cent price increase of drugs?
The recent price increase benefits pharmacists more than anyone else. For instance, if a drug price rises EGP 1 extra, the pharmacist will get 90 piasters. Drug companies are negatively influenced by drug price increase and the dollar crisis, not pharmacists.
Do you expect drug prices to rise again after imposing VAT?
Imposing the value added tax (VAT) is another problem drug companies have to face as costs will increase. Though, drug companies will not be able to increase drug price because the Ministry of Health mandates a fixed price for each drug. As opposite to what most people expect, drug companies do not receive any aids from any authorities.
How much is Egypt’s drug exports?
Egypt is a leading figure in drug manufacturing since 1934; however, it only exports drugs worth $600m. This is a small number compared to other counties such as Jordan which exports drugs worth $2.4bn. India and Israel’s exports of drugs are $25bn and $15bn, respectively. This small number of drug exports comes as a result of exporting a huge amount of drugs at low prices.
Has the Egyptian Union for Investors Associations conducted a study to increase drug exports?
The union has conducted a detailed study in this concern and submitted it to the cabinet. The study researches the possibility of increasing Egypt’s drug exports to 100 per cent, in 3 years, to hit EGP 2bn annually.
Can you tell us more about the study?
The study delved into the possibility of introducing incentives of drug exports without incurring the state’s budget any additional costs. The incentives include granting any company that hits EGP 3m of drug exports, the right to increase its drug price up to 25 per cent.
What are the other incentives included in the study?
Registration of drugs, local market drugs, under a new brand name and with a higher price to export them, is another strong incentive. This step is necessary because the majority of importing countries demand that drugs have to be exported in the same price of the local market. Thus, if drug companies are allowed to trade 10 per cent of their drugs in the local market with an increased price and new brand name, they will be able to export at higher prices.
Moreover, another incentive is to submit marketing researches to meet export markets’ needs. Drug exhibitions will also motivate drug foreign investors and will be a rigorous incentive to Egyptian drug companies.
How big is drug trade?
Drug trade seizes the second place of the world’s biggest trades, preceded by weapon trade. The world’s drug sales seized $1.2 trillion in 2015; the Middle East region has just 3 per cent share of this huge amount. While the world’s drug trade increases by 7 per cent annually, Egypt has to increase its local production of drug to meet the local market needs. It is worthy of note that Egypt consumes the highest average of drugs, compared to other Arab countries.
