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Egypt Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Aug 2011, Pages: 102
Business Monitor International's Egypt Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Egypt's pharmaceuticals and healthcare industry.
BMI View:
Despite the Egyptian interim government's populist spending plans, which include increased budgets for public healthcare and pharmaceuticals, the country's future economic direction remains unclear and this situation will not be rectified until a new, elected government is formed. The government's latest announcement that it intends to increase expenditure on scientific research is admirable and presents opportunities for the pharmaceutical sector, however it is ultimately misguided, as the increase is too great for too short a period of time and Egypt does not have sufficient human resources to realise the benefits of the additional funding for science.
Headline Expenditure Projections
- Pharmaceuticals: EGP15.17bn (US$2.69bn) in 2010 to EGP16.47bn (US$2.77bn) in 2011; +8.6% in local currency terms and +2.8% in US dollar terms. Forecast up slightly from Q311 due to government pledge for greater public healthcare expenditure.
- Healthcare: EGP71.16bn (US$12.63bn) in 2010 to EGP80.06bn (US$13.45bn) in 2011; +12.5% in local currency terms and +6.5% in US dollar terms. Forecast down significantly from Q211 due to MENA political crisis.
- Medical devices: EGP2.78bn (US$493mn) in 2010 to EGP3.09bn (US$520mn) in 2011; +13.4% in local currency terms and +7.3% in US dollar terms. Forecast down slightly from Q111 due to MENA political crisis.
Business Environment Rating: Egypt’s score of 46.5 is an improvement on its Q3 score of 43.5, but still down on 48 in Q211, caused by the radical changes in its governance. The country’s pharmaceutical market places 12th in BMI’s proprietary BERs for the region.
Key Trends & Developments
- Egypt’s pharmaceutical market has not yet been fundamentally changed by the political upheaval. If anything, the industry is likely to see a year with very little legislative activity directed towards pharmaceutical regulation. The industry needs to be looking to its representatives and lobby groups to identify future allies within the possible electoral candidates to promote their interests.
- BMI can envisage a scenario in which attempts to appease popular anger at social inequality, repression, autocracy, price inflation and corruption leads to an increase in public expenditure on medical devices and healthcare.
BMI Economic View:
Although clamping down on top-level corruption will need to be a key long-term goal of any new government, both in helping to bolster public support and attracting much-needed foreign investment, the quick pace at which many of these charges are being planned risks undermining the credibility of the very process the transitional government is trying to strengthen. Moreover, given the inherent links between the business community and the previous regime, a considerable degree of uncertainty exists surrounding which prominent members of the private sector may come under the public prosecutor's line of fire in the near term.
BMI Political View:
Despite the relatively more stable security environment, political risk in Egypt should be expected to remain elevated in the near term. Politically-motivated prosecutions and a possible drop in public support for the armed forces remain key risks. Egypt's short-term political risk rating is 53.3 out of 100, placing it fifth from the bottom in MENA.
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