Exchange Rate And Raw Material Prices Hurt Local Drugmakers

BMI View: Following the failed attempt to reform Egypt's pricing system in 2010, the country is still in need of a more flexible drug pricing system that recognises the effect of currency and raw material price changes on production costs. The appreciation of the Egyptian pound against the euro now offers upsides for US drugmakers to increase exports to the North African country. Egypt will take time to rebuild its economic potential after the overthrow of former President Hosni Mubarak. This will hinder pharmaceutical sales in the short term, though the government's socially proactive agenda to increase public expenditure on healthcare will help offset the fall in macroeconomic productivity.

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