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Al-Ahram Weekly 20 - 26 April 2000 Issue No. 478 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 20 - 26 April 2000 Issue No. 478
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Heritage Features Travel Living Sports Profile People Time Out Chronicles Cartoons Letters The wrong prescription?
By Gamal Essam El-DinFor several weeks now the Holding Company for Drug Industries (HCDI) has been fighting a battle on two fronts -- against both the Health Ministry and private investment pharmaceutical companies. Galal Ghorab, HCDI chairman and head of the Chamber of Drug Companies, has accused the Health Ministry of laxity in the supervision of registration and pricing in the local drug market. This has resulted, he argues, in the market being deluged by huge quantities of imported drugs sold at vastly inflated prices.
Minister of Health Ismail Sallam, launching a counter attack in the People's Assembly last week, said that a major objective of current policy is to encourage private investment.
"In the pharmaceutical sector this will lead to competition, the benefits of which will eventually be felt, in terms of both price and quality, by consumers," Sallam said.
Ghorab is unimpressed. The HCDI will not give up calling for new policies, he says, until poor Egyptians are afforded adequate protection from both substandard drugs and the greedy pricing policies of private investment companies.
Several weeks ago, HCDI launched a campaign against the registration and pricing policies currently in force. What is intended by the timing of the campaign?
Before answering your question, I would like to indicate that I speak here in my capacity as HCDI's chairman and head of the Chamber of the Drug Companies and the Commodity Council for Drugs and Vaccinations. This means that I have a panoramic view of the operation of the drug market in Egypt. I would like to emphasise three facts: first, the Egyptian pharmaceutical industry has reached very high levels in terms of quality and quantity. Every Egyptian should be proud of this fact. HCDI's policy is to protect this industry from collapse in the face of globalisation and adverse conditions. Second, the policy of HCDI's affiliated companies is to make sure that different kinds of drugs are available at adequate quantities and at reasonable prices to all Egyptians, especially the very poor. Third, HCDI will stand firm against loopholes that open the way for the registration of food complements as "drugs" and for what can be called "toll manufacturing." The latter allows non-specialised agencies to manufacture drugs for other companies on a contract basis. We are against this kind of haphazard production because of the obvious risks it courts.
HCDI is also against the imprudent importing of drugs. This includes importing drugs that can be manufactured domestically. These imported drugs are sold at high prices. For example, an imported kind of tranquiliser is sold at LE7 while an anti-vomiting tablet is sold at LE21. If these were to be manufactured locally, their prices would be anything from 10 to 50 per cent lower. The importers of such drugs attack me every now and then. They spend a fortune publishing full-page advertisements in newspapers just to attack us.
In last week's meeting organised by the People's Assembly Health Committee, you strongly objected to the policies currently adopted by the Health Ministry in terms of registration and pricing of drugs. Why?
I wanted to alert the attention of the Health Ministry's officials to the gaps in their supervision of imported drugs. Our basic demand is that there should be effective control over the registration and pricing of drugs. In the past, registration and pricing of drugs was the joint responsibility of the ministers of health and supply. There is no longer any transparency in the pricing and registration of new drugs. Every now and then, we find drugs sold at a certain price, followed by a later announcement that the price is to be cut by, say 20 per cent. What does this mean? Does it mean that the first price was inflated? And what about the new price? Is it still profitable for the company, and at what margin?
In the parliamentary meeting, you also asserted that the Health Ministry has shied away from paying HCDI's affiliated companies the LE350 million it owes. Can you elaborate on this?
The Health Ministry owes LE350 million to HCDI's affiliated drug companies. This is the value of drugs purchased by the Health Ministry to cover the needs of its affiliated hospitals and the Health Insurance Sector. If HCDI deposited this amount of money in banks, it would generate LE40 million per year in revenue. Imagine if we had this revenue. It would help us greatly in facing competition from investment drug companies. This is why I emphasise that there is a kind of discrimination against the HCDI, which is only, after all, acting on President Mubarak's instructions in offering poor citizens good products at subsidised prices.
Minister Ismail Sallam announced before the Assembly that the campaign against the Health Ministry is motivated by personal interests. What do you think he meant?
I do not think that HCDI is targeted by these words. To me, those targeted by Sallam's words are the importers who flooded the market with substandard drugs. One of them brought cheap drugs into Egypt and made profits of no less than LE400 million.
You have been attacked for rejecting calls for opening up the industry to international competition before the GATT transitional period comes to an end in 2005? Why have you adopted this position?
I adopted this point of view in order to protect the national drug market from invasion by multinational drug companies. Any invasion will inevitably push drug prices to astronomical levels, beyond the financial capacity of the vast majority of Egyptians. In a rich country like Canada, they decided to immediately phase out the grace period. The result was that European and US multinational pharmaceutical corporations managed to monopolise 90 per cent of the Canadian drug market while drug prices increased sharply.
In Egypt, it would be unfair to most citizens to immediately phase out the grace period. Even during this grace period, a certain stage of the GATT agreement, the so-called "mail box stage", was applied last January. This stage allowed for a new kind of what can only be called "monopolistic marketing."
For its part, HCDI is currently involved in helping its affiliated companies prepare for 2005. This week, a training centre for drug industrialists was opened, and a research unit for genetic engineering is scheduled to open very soon.
