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Egypt Macro Flash<br />
�ADJUSTMENT TO EGYPT’S PRICING SYSTEM FOR NEW DRUGS<br />
Source: Al Masry Al Youm, Al Borsa, July 8, <strong>2012</strong><br />
The Ministry of Health issued a decree that introduces some minor adjustments to the pricing system for<br />
new drugs (first announced in 2009). New drugs are now to be priced at the lowest international price<br />
versus pricing at a discount to a basket of 36 countries previously. Drugs are to be re-priced in the event of<br />
any relevant FX movements of +/-15% or more in any one year. The ministry added that an announcement<br />
of 50 drug price cuts will be made within the following ten days. The decree also states that the distributor’s<br />
margin should be 7.86% of the ex-factory price and pharmacy margin should be 25% of the distributor price.<br />
These margins are applicable to drugs that fall within a list of essential drugs. Pharmacy margins are to be<br />
increased 1% per annum for all drugs priced under the old system. The impact on EIPICO is negligible, if any<br />
as the company is currently not very active in new drug launches. Even if the decision was applied to all<br />
existing drugs, it will not imply any significant downward re-pricing to the drug portfolio of EIPICO.
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