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As anticipated by BMI, Egyptian President Mohammad Morsi's relative success in his first100days in officehighlights a degree of political and economic stability,which we believehas 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 systemsets theprices of medicines higher than the old cost-plus system and BMImaintains this will be good for multinational companies in the mediumterm. However, the dangers of a possible downward pricing spiral, due to the interdependence of countries in the reference pricing basket, is along-term risk to multinationals'revenues.
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 Q4 12.
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 Q4 12.
Medical devices: EGP3.20bn (US$538mn) in 2011 to EGP3.65bn (US$603mn) in 2012; +14.0% in local currency terms and +12.0% in US dollar terms. Forecast broadly in line with Q4 12.
Risk/Reward Rating: In our latest Pharmaceutical Risk/Reward Ratings (RRRs) for the Middle East and Africa (MEA), Egypt again ranks 11th out of the 30 regional markets surveyed. Egypt's risks score remains below the regional average, in contrast to its more favourable rewards component. Globally, Egypt remains 56th out of 95 markets, between Kazakhstan above it and Morocco below.
Competitive Landscape
The competitive landscape section provides comparative company analyses and rankings by US$ sales and % share of total sales - for the total pharmaceutical sector, as well as the OTC, generics, and distribution sub-sectors.