Health at what price?
The health minister is moving ahead with plans to reduce the price of imported drugs, Reem Leila
Cairo's Administrative Court has ruled against the procedural process of issuing a ministerial decree that would reduce the price of imported medicine, but did not rule against the decree itself.
Two months ago, after agreeing with representatives of international pharmaceutical companies, Health Minister Hatem El-Gabali announced a new pricing scheme for newly introduced medicine which would decrease their cost by 10-60 per cent. The new system annuls the old "Cost Plus System" which used to access the price of imported medicine on the basis of the cost of raw materials, packaging and marketing used to produce them.
El-Gabali said the decree would amend the process of medicine pricing and will not lead to any increase in the cost, as was thought by some. Rather, he said, it will provide the opportunity for a periodic review of prices. The minister also criticised "those who doubted the decree's legitimacy without any objective evaluation or scientific study of it."
Usually foreign drugs go through endless routine procedures before being approved for sale and priced in Egypt. The minister's latest decree is an attempt to further reform the regulations. The new pricing system sets the price of originator-brand drugs in accordance with the lowest price in foreign markets, with an additional 10 per cent discount.
Abdel-Rahman Shahin, official spokesman at the Ministry of Health, said the decree had not come into force yet concerning any of the imported medicines. "It will come into effect only for newly introduced drugs."
Shahin said reducing prices of medicine is being done for the welfare of both the consumer and pharmaceutical companies. "We can't allow these companies to fool us by selling us medicine at higher prices than that of our neighbouring countries," he added.
Lawyer Adel Ramadan of the Egyptian Initiative for Personal Rights (EIPR) filed a lawsuit at the Administrative Court seeking to annul the ministerial decree. Ramadan challenged the decree as being unconstitutional, and warned the public that under the new pricing system, the cost of medicine would increase dramatically. "The ministerial decree links the cost of each drug to the price of innovator brands on the international market," Ramadan stated. "This decree is full of loopholes, thus allowing pharmaceutical companies to evade pricing rules and obtain the highest price for drugs, regardless of quality."
According to a press release issued by the EIPR, the government is obliged to ensure that price schemes would allow access to all quality medicines. It also demands that members of the public and civil society should be allowed to contribute to the drawing up of pricing schemes.
Shahin dismisses such complaints as groundless. The drug pricing system in Egypt, he pointed out, has become convoluted and overly bureaucratic. "There will be no backing down regarding the decision."
International pharmaceutical companies agreed to Egypt's request after being persuaded by the Health Ministry's argument. According to Shahin, Egypt is among very few countries which subsidises medicine. "These international companies have their factories in Egypt and the country subsidises their electricity, gas and water," Shahin said.
Accordingly, the overall cost of manufacturing medicine is cheaper than that in other countries. Moreover, these companies are delivering medicine to a country with a high population density. "Selling medicine to a country with only 20 million people is not the same as selling to an 80 million population," he argued.
Shahin said the decree would be assessed after one year in order to evaluate the entire procedure. "Both parties will be free in continuing with the agreement or terminating it."
The decree coincided with the Ministry of Health's review of the price of medicine and a comparison with their price abroad. According to assistant health minister for pharmaceutical affairs Kamal Sabra, the ministry checked drug prices in many neighbouring countries, including Saudi Arabia, and some European countries like Ireland. "We discovered that the price of medicine in these countries is less than its equivalent in Egypt," Sabra said.
There are currently 93 medicines out of Egypt's 9,000 which have been acknowledged as being higher in price than that of neighbouring or European countries. "Accordingly, the minister agreed with international pharmaceutical companies to sell us the medicine at a lower cost," Sabra said.
A two-month grace period was granted pharmacies to either sell or return their stock of the 93 drugs. "Starting 1 May, 40 medicines were being sold to the public at lesser cost. The remaining 53 medicines will be sold cheaper by the beginning of July," Sabra stated.
Violators of the decree will be punished. "All pharmacies which will not abide by the ministry's new pricing list will be shut down," Shahin stated.
The pharmacist profit margin is untouchable. "It is protected by the power of law. They have a fixed per cent of profit on medicine, whatever the price is," Shahin added.
The cost of the rest of the 9,000 drugs will be reviewed within the coming months. If there are differences in price changes will be made for the sake of the patients.