Pharmaceutical companies, distributors and pharmacies have been accused of taking advantage of the government's recent decision to increase the price of medicines on sale in Egypt, bending the rules in order to overcharge customers.
According to health industry experts and campaigners, some unscrupulous companies have been applying new pricing rules to ampoules, sachets and blister packs, rather than the boxes containing them, thereby boosting the prices at the point of sale. Some have also been removing price stickers in order to facilitate their deceptions, according to some sources.
The Health Ministry's new pricing system — raising the cost of many medicines at pharmacies — was announced by the cabinet on May 17. The price hike was aimed at helping Egypt's pharmaceutical industry meet the growing cost of drugs and raw materials in the face of the ongoing foreign currency shortage, which has seen the US dollar trading at LE8.5 in banks and LE11 on the black market.
Pharma companies had called for price increases to save them from ruin in the face of costly imported raw materials, and in mid-May, Health Minster Ahmed Emad Eddine announced the new prices by way of a cabinet decision.
According to Cabinet Decision no. 499, pharmacies are now obliged to increase the prices of the standard boxes of medicines at the lower end of the cost scale. Medicines that cost less than 10LE per standard box are to be increased in price by LE2 per box. Meanwhile, the prices of boxes that normally cost between LE11 and LE30 are to be increased by 30 percent.
More expensive medicines are not affected by the new rules.
In a press conference on May 17, the health minister said all pharmaceutical companies must apply the new prices to their products or face having their licenses withdrawn.
However, various sources have informed Egypt Independent that in many cases the new price increases are being applied to the individual contents of boxes — sachets, ampoules and blister packs — which in many cases means customers are paying more than they should.
Taking advantage of 'chaos'
The Egyptian Center for the Right to Medicine (ECRM) issued a statement recently claiming that several medicine distributors closed their branches just 48 hours after the cabinet's decision was announced, removing the price tags from their products, thus allowing them to apply their own dishonest interpretation of the new pricing rules.
"It unfortunately enabled these companies to take advantage of the decision and the administrative chaos in the Health Ministry to maximize their profits in a few hours, which is a flagrant violation to the cabinet's decisions, which were already working in favor of those companies that were suffering and their big losses," the statment read.
The ECRM said that many companies illegally raised the prices of the blister packs for 150 different drugs, a move that conflicts with the rules laid out in the cabinet decision.
The ECRM gave the example of a blister pack of Rivo aspirin tablets, which increased from LE2.75 compared to a mere 75 piastres. The additional LE2 should be applied to an entire box, not a single blister pack, according to the NGO.
Meanwhile, they said, sachets of Brufen increased from LE25 to LE65; Virecta tablets rose from LE18 to LE30; and Lipitor jumped from LE24 to LE144.
All of these prices were illegal, they claim, the result of cynical manipulation.
Some companies are also accused of holding back their stocks of medines in anticipation of the price hike, thereby causing a scarcity of medicines on the market.
Amendments needed
Mohy al-Din Ebied, the head of the Pharmacists Syndicate, has called for amendments to the new pricing system, which he says has been manipulated by drugs companies at the expense of patients.
"We won't accept any increases on individual packets or ampoules," he said, "because the patient's simple right is a guranteed full commitment from the companies to the cabinet's decision — not the manipulation of it."
Ebied has urged pharmacies across the nation to boycott any drugs company that does not follow the new pricing rules correctly. He said the products of such companies should be returned to them.
Ehab Taher, the syndicate's secretary general, told Egypt Independent that the cabinet's new pricing system is basically wrong anyway and should be completely reviewed.
He described the decision making that resulted in the new prices as "chaos", insisting that it makes no scientific sense to apply a blanket price hike on drugs that doesn't take into account the difference in the cost of the raw materials used in each one.
Instead, Taher says, the new cost of each drug should be calculated based on the costs of the raw materials, and the new prices should be compiled for distribution to pharamacies. The government should then apply a system of monitoring the new prices and ensuring compliance, he says.
Moreover, Taher urged the government to exclude medicines for chronic and acute diseases, such as cancer and Hepatitis C, making up the cost from public funds.
"Unfortunately, many companies have exploited the situation and traded people's health by raising the prices of the drugs by three times," Taher said. "So we need true accountability from the parliament and the government."
Hike innevitable, poorly applied
However, there have been some supporters of the new pricing policy, among them Ali Auf, head of the drugs division at the Chambers of Commerce.
Auf praised the cabinet decision, saying that medicine prices have not increased since 1995, when the dollar was selling for LE3.
"Ninety-five percent of the raw materials for medicines are imported, including the paper of the medication package inserts. So it's not fair to sell the drugs at the same price, ignoring the increase in the price of the dollar," he said.
"Cancer and Hepatitis C patients would not affected anyway, because the price of these drugs is more than LE100, meaning the law would not apply to them," Auf told Egypt Independent.
He said dozens of drug companies and factories have suspended their operations after losing millions as a result of the currency crisis, with the production of some drugs halted.
"The factories of the state-owned company Holdipharma company have been making losses for the past eight years continuously, amounting to LE180 million," Auf said.
However, while he feels a price hike was innevitable, he is not happy with the way it was implemented. In particular, he says, there should have been a suitable gap between the announcement and the application of the new system.
"The government should have informed the public and the pharmacies ahead of officially announcing the decision, thus preventing any manipulation or public anger," he said.
Fgurthermore, he claims, it is the responsibility of the authorities to ensure that prices are not being manipulated and the rules are being applied correctly.
"It shouldn't be too difficult for the Health Ministry, along with the Pharmacists Syndicate, to keep a watch on the 140 drug factories and four main distributers, to prevent any illegal activities, applying the restrictions and sending out inspection teams to the pharmacies — including the big ones," said Auf.
