EGYPT DEF DEF 2 15/11/06 23:44 Page 1 - PharmTechfiles.pharmtech.com/alfresco_images/pharma/2014/08/... · Dr. Sarwat Bassily, chairman and CEO of Amoun Pharmaceuticals, one of Egypt's

EGYPT DEF DEF 2 15/11/06 23:44 Page 1

gypt has a lot of decisive assets; location, know-how,with more than 74 years experience, and the biggest pop-ulation in the region. This is why I believe our country

could be the regional hub for the pharmaceutical industry sincewe have the potential to do so.”

His Excellency, Professor Dr. Hatem El Gabaly, the minister ofhealth and population of Egypt, shows no doubt that the strongand necessary reform his government is currently undertakingwill prove to be fruitful.

Although the country is considered one of the most advancedand mature pharmaceutical industries in the region, it is stillmainly a domestically oriented industry focused on drug formu-lation with very limited research capabilities.

The country also faces its regulatory framework, an arguable andcontroversial pricing policy, as well as its limited export capaci-ty. On the other hand, its long tradition in medicine, as well asthe dynamism and goodwill of its businessmen, will certainlyhelp the country get back on the right track.

Dr. Osama El-Saady, at the head of the Federation ofPharmaceuticals, Cosmetics and Medical Appliances Industries,as well as chairman and managing director of Sanofi-Aventis, isquite optimistic about the ability of the Minister to find a balancebetween economic urges and social dimension.

“I invite the foreign community to keep an eye on Egypt since itis the best place to invest in the Middle East. You can trust

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Egyptian manufacturers because all has been put in place tomanufacture high-quality medicines in the country,” he prom-ised. According to Dr. El-Saady, the sector's situation will defi-nitely improve within two to five years' time.

The second market in the area

It would be an understatement to say the country's potential isgreat. With over 74 million inhabitants, and growing at a rate of2%, Egypt has become the most dynamic and attractive marketin the MENA region. The country also has the second largestpharmaceutical market in the area after Turkey.

There are currently 74 pharmaceutical factories producing over

Egypt Reportwww.focusreports.net

Potentially the Best Placeto Invest in the Middle East

Egypt:

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7,600 different types of drugs for domesticsale and export. Today, the Egyptian drugmanufacturers can be lumped into threebasic categories: the public sector represent-ed by the Holding Company forPharmaceuticals, Chemicals and MedicalAppliances whose 12 subsidiaries control atotal of 23% of the market share; theEgyptian private sector companies; andfinally a group of eight multinationals. Allare fighting for market share, changing theirpositions and alliances.

Of the 8,000 drugs registered with theMinistry of Health and Population, almost7,600 are manufactured locally, enough tocover 93% of domestic demand. Drug mak-ers say one of their biggestchallenges is that the gov-ernment’s pricing policyhas failed to keep up withthe rising costs of import-ed raw materials. Unableto raise the price of theirproducts, pharmaceuticalfirms have been forced toabsorb skyrocketing inputcosts.

Although there is no doubtthat modernization of the sector is under-way, the tight regulatory environment stillrepresents a hurdle for foreign companies.Many of the policies that govern the phar-maceuticals sector date back to the 1960s,when the government established publiccompanies in order to manufacture cheapsubstitutes for imported drugs as part of thecountry’s policy of self-sufficiency. By the1980s, the focus had shifted to a free marketon the back of Sadat’s “open-door” econom-ic policy, in which international companieswere permitted to export their products toEgypt or establish their own factoriesdomestically. “There is definitely an urge ofmodifying the pricing system,” says Dr. El-Saady. “A more transparent system shouldalso be implemented in order to attract moreFDI.” The chamber has, thus, addressed thegovernment to base its pricing system onone of the successful neighbors.

Therefore, the major changes going on atthe head of the country are thoroughly fol-lowed by the differing actors of the sector.

The new healthcare program was designedin alignment with President Mubarak'spolitical agenda, which is focussed on pro-viding healthcare insurance to everyEgyptian by 2010. “Today, around 35 to37 million of the 70 million people arecovered by healthcare insurance, but by2010 we are expecting to cover 100% ofthe population,” said Dr. El Gabaly.

“Pricing is the hottest issue and this is asocial constraint,” added Dr. Zakaria Gad,chairman of the Egyptian PharmacistSyndicate. “We are always trying to getthe price of medicines to come down. Thenational policy is to provide affordablemedicines to all of the people in this coun-

try. Most of our peoplehave a very low income.This is a continuousheadache for everyone.”

The 100% governmentalDrug Holding Companyhas also been a pivotal

topic for the Egyptian economy as it man-ages to keep the pricing down and pro-vides affordable medicines while remain-ing very profitable. “There is a need forgovernmental companies in Egypt and wewill be very active since the governmentwants to cover all Egyptians by 2010,”ensured Dr. Magdi Hassan, chairman ofDrug Holding Company.

A company like Vacsera has been in thecountry for more than 105 years and is stilla key actor in the nation, providing vac-cines to the people, such as for polio,which has since been eradicated. The com-pany, however, is at a critical point in try-ing to regain its credibility. It was wronglysaid to have sold spoiled vaccines andresulting in the deaths of several children.It is also overcoming a corruption scandalinvolving the previous CEO. Vacsera’schairman, Dr Mohamed Rabie, prefers tostress the importance today in having suc-cessful governmental companies andshowing how his expertise in the private

Providing affordable medicine Dr. Hatem Mostafa

El-Gabaly,minister of health

“By 2010 we are expectingto cover 100% of the population”


ly through tough-ening up compli-ance standards.Second, thereneeds to be seriousreconsideration ofemerging obsta-cles. On one, handhealth authoritiesare getting moreflexible with medicine importation, there-by repelling global players from grantingmanufacturing rights for new products andtechnologies in favor of importation; andon the other hand, restrictions imposed bythe implementation of the TRIPS agree-ment as of 2005, means generic manufac-turers are suffering a significant shortageof pipeline products.

“If not seriously addressed, both chal-lenges are liable to put the future of theEgyptian pharmaceutical industry in jeop-ardy,” Dr. El- Bardissi warned.


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sector could help build a more transparentand less bureaucratic system.

The government's firm grip on pricing poli-cies helps keep the price of medicine inEgypt among the lowest in the region. Thismoderation is also the result of a robustlocal pharmaceuticalindustry, which is ableto produce genericdrugs at a fraction of thecost of imported brands.

The necessity of reform

“I am less pessimistic today than duringthe last ten years,” noted Dr. Wafik El-Bardissi, executive vice-president ofMinapharm Pharmaceuticals. “During thepast ten years, health policies have led to achaotic environment.”

As a result of a lenient compliance system,the compliance cost was significantly

reduced and the very professional complexindustry became attractive for non-profes-sional entrepreneurs with absolutely noexpertise or knowledge of the industry.According to Dr. El-Bardissi, the new cabi-net is focusing on health reforms and thepharmaceutical industry is dealing with this

as part of the reform.

“This is liable toalign the futureof the industrywith the health

reform plans. This is in contrast to the pastten years, where health policies have dealtwith neither independently. Spontaneousresolution of chronic problems like pricingcould be a consequence of this approach,”he summed up.

However, two major challenges are facingthe new cabinet, warranting specific atten-tion. First, there is a need to control thechaotic environment of the industry primari-

Osama El SaadiMany of the policies that govern the pharmaceuticalssector date back to the 1960s




nfortunately, the pricingissue has kept many com-panies out of the export

market. If Egyptian pharmaceutical firmscurrently export to 45 countries, mostlyin the Middle East and Africa, the totalvalue of exports of all 74 pharmaceuticalfactories in Egypt is estimated at just $41million - a drop in the bucket even byregional standards. Jordan, for instance,exports $226 million in drugs per year,

with only 16 pharmaceutical factories. These figures are not surpris-ing though, for the Jordan market is very small and its industry wasoriginally thought of for the export market.

The influence of Egyptian medicine

The AstraZeneca experience is very relevant to the export issue.Sweden's AstraAB and Britain's Zeneca Group had a presence inEgypt for decades, but the limited range of products did not justifythe expense of setting up factories there. Following the merger in1999, to form AstraZeneca, the group began to survey the market. In2002, the company announced it would invest $40 million to build afactory in Sixth of October City to produce its specialty line of ethi-cal drugs.

“We studied the market and the project was finally given the green-light in 2002,” explained Dr. Ahmed Zaghloul, marketing companypresident of AstraZeneca Egypt. “The plans were then put on holdduring 2003 because of the pricing problems that were causing tur-bulence in the market.”

Dr. Zaghloul said he found it intriguing that during AstraZeneca'snegotiations to open the new factory, the government requested thatit considered exporting its medicine. The company would like toexport, but as many countries set prices on imported medicine basedon its price in the country of origin, exporting could be a loss-mak-ing venture. “How can I export if there are products here losingmoney?” he argued. “If I try to export them, the local price will makeme lose even more money.”

Despite this prominently local focus, to Dr. Zaghloul, Egypt is meantto reinforce its position in the sector. “We are 70 million and grow-ing at a fast rate, and nearly one-third of all Arabs are Egyptians. Theinfluence of Egypt on the pharmaceutical sector in the region is veryclear. One must not forget that the Egyptian school of medicine hasbeen a big influence on the entire continent,” he said. .

Being ahead of others

Dr. Sarwat Bassily, chairman and CEO of Amoun Pharmaceuticals,one of Egypt's oldest private drugmakers, shares the same vision. To

him, the major obstacle the country faces regarding exports is thatEgypt is a big country and it is growing very fast. “The populationhere is increasing by 1.4 million per year, which is a very challeng-ing figure to satisfy with new drugs every year. The amount ofpharmaceuticals which I could sell here in a week's time can takeus a year to sell in the export market,” he said. Amoun is current-ly concentrating on the local market, and just started looking to theexport market a few years ago.

“When I soldmy first compa-ny to GSK, Isold it with 523

registrations outside Egypt,” recalled Bassily. “When we started thesecond company, we had to start making the registrations of thenew products from scratch. Today, we have 211 products registeredand 281 under registration outside Egypt.” Despite these draw-backs, Amoun is still a key actor in the Egyptian pharmaceuticalsector. Dr. Bassily is particularly proud to have sold its companiesto GSK and contributed to the success of this MNC in Egypt.

“If we take into consideration all our activities, the company ranksnumber two as per the IMS ranking, and we have approximately6% of the total Egyptian market. Moreover, we manufacture 23 ofthe top 160 products in the country. I am proud to say that we werethe first company to do this in the private sector,” insisted Bassily.

Amoun is also the only company to have seven different interna-tional certifications. It was, for instance, the first pharmaceuticalcompany in the world to get the certification BS-7799 for infor-mation safety and security, and the only pharmaceutical compa-ny in the region with OHSAS-18001 certification forOccupational Health and Safety. It was also given a prize byUNIDO as one of 50 Innovative Enterprises in Africa, and by theend of 2004 Amoun achieved the EU certification to export tothe European market.“The key to success is being ahead of others. In the pharmaceu-tical business, a person has to have a good reputation, and inAmoun we are keen to build it year after year. We are very wellknown for our credibility, effective products and straight-for-ward reactions,” he concluded.

Dr. Sarwat S Bassily

Astra Zeneca’s U$ 40 million plant in 6th of October city near Cairo

Egypt exports a disappointing$41 million of drugs per annum.

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Breaking Through out of the Export Desert




An increasing local market

The story of EIPICO, the number one privatecompany in the country, is also very relevantto the tricks and resilience pharmaceuticalcompanies had to show in order to break thenational structural constraints.

“When, in 1962, we started the nationaliza-tion of the pharmaceutical industries, wewere facing the problem of consumption,”remembered Dr. Borhan El-Din Ismail,chairman of the board of directors and exec-utive director of EIPICO. “We could notmeet the demand. So, until 1977, we onlysupplied the local market. This is what theMinister of Health demanded, and we had tosatisfy him. We therefore became experts inthe local market, but knew nothing of expor-tation. We were totally oriented towards thelocal market which was growing rapidly andkept us very busy.”

In 1980, Dr. Ismail started EIPICO purelyfor the challenge of being the one companyin Egypt that could meet the GMP standardsset by the WHO in 1977. “It became a per-sonal challenge, and I succeeded. And as mystandards are so high,when we had met theGMP standards, we werealso ready for exporta-tion. It hasn't been easy.The Egyptian pound is,after all, not a strong cur-rency. Exportation is much easier for Jordanwhich has had a strong currency and focussince day one in this strategy,” he recalled.

EIPICO is today exporting to 42 countries,including the UK. “In order to be able toexport, we are often monitored and inspect-ed by all the authorities in this country. I amnow planning to start building factories out-side Egypt,” Ismail concluded.

The challenge of mergers andacquisitions

Although the protectionist policies imple-mented in Egypt in the 1980s and early 90swere the milestone to develop a strong localpharmaceutical industry, it limited the coun-try's trading performance. Therefore, asshown with the EIPICO story, the industry isat a turning point, finding its way to enhanceits export development. Thus, assessing thepotential of the export market, the Ministerof Health and Population and the Minister ofIndustry have embarked on a mission toboost the export to US$1 billion for 2011.

“Egyptian manufacturers have to exporttheir drugs at Egyptian their drugs atEgyptian prices which make it impossible for

them to successfully conduct export activities.The government is now aiming to help themin this regard and change things. However, Ibelieve that in order for the industry to be ableto exploit its potential, companies should startthinking about mergers and acquisitions, andabout specializing in certain products,”explained Dr. El Gabaly.

Dr. Sherine Hassan Helmy is proud to recallthat his company, Pharco Pharmaceuticals,currently ranks number three on IMS and wasthe first to merge in the country. “We sawopportunities in merging and acquiring com-panies as a growth strategy,” he explained.Also, as the head of the Export Committee,Dr. Helmy considers that “playing a TEAM”will really help to enhance the industry.

This strategy was followed by private OctoberPharmaceuticals, whose main lines are cardi-ology, hormones, slimming aids, and, fromtheir own research, a product called Vitiverafor Vitiligo made from Egyptian aloe vera.

“We are exporting it to Saudi Arabia and afew other countries,” boasted Dr. Adel Fouad,chairman of October Pharma. Soon, we will

expand our exports to the rest of the world.Exporting is our biggest strategy, but we aresubject to many audits, and this takes time.”For the moment, only 5% of its profits comefrom export, but October Pharma targets 15%in the next three years. “We are in the firststage at the moment. Our initial expansionwill be towards Yemen, Sudan and Libya.These are promising markets for us,” notedDr. Fouad.

According to Dr. Fouad, with more and moreEgyptians covered by health insurance, thelocal market will grow considerably. “Ourlocal market will be our first priority.However, as an export incentive, we are hop-ing to get some subsidies from the govern-ment,” he explained.

The company is also very careful about theongoing merger and acquisitions process. “Ifthe M&A is a win-win situation - helping thegrowth of both companies, giving the chancefor more people to find work - then it is wel-comed. A successful company is the result ofthe human beings that run it. Our staff hasmany years of experience, our factory isequipped with excellent machinery, and ournew recruits are being trained under the bestinternational standards,” concluded Dr.Fouad.

Protectionist policies from the 1980sfostered the development a strong local industry but limited the country’strading performance.




n January 1, 2005, the TradeRelated Intellectual PropertyRights Issues (TRIPS) agree-

ment came into full effect in Egypt. For localdrug makers struggling to come to termswith tighter IPR regulations, things wentfrom bad to worse.

The pressure of MNC

TRIPS set a minimum standard on intellectu-al property protection (patents, copyrightsand trademarks) to which WTO membercountries, including Egypt, must adhere. The1995 agreement provides worldwide patentprotection for new drugs developed by R&Dpharmaceutical firms by prohibiting unli-censed rival companies from manufacturingproducts with identical chemical formulas fora period of 20 years from the date the appli-cation is filed.

Developing WTO countries were given a ten-year transitional period to prepare for theagreement’s full implementation and toincorporate this 20-year patent protectioninto their own legislation.

Egyptian legislators responded withIntellectual Property Rights Law No. 82 of2002, which was implemented in the sameyear, except for its articles on patent regis-tration, which only came into effect thisyear.

“Ten years was not enough time for us tobuild up our R & D facilities as this isextremely costly,” observed Dr. Mohy Hafez,CEO and general manager of Delta Pharma,which, among the 532 manufacturers inEgypt, ranks today as the second fastestgrowing company of the country. One newchemical entity could cost up to $200 millionto develop. We are a developing country, andthe only thing we could do to try and compete

was developmental research.”

Despite being a medium-sized company, itchooses to emphasize itself in research.Since then, it has already established threepatents, and is strongly focusing on NDDS.“Our policy is to have a budget availablefor this,” said Dr. Hafez. “Delta Pharma isalso putting agreements into place with theresearch institute in Egypt to find newchemical entities from herbal sources andmicro-organisms.”

In his opinion, Egypt, as a developing coun-try, simply does not have the means to doR&D. But, as its native companies are

focusing on survival, the five largest MNCsand all the innovators are merging to makevery large institutes. They now control 23%of the R&D turnover in the world. “When they produce new chemical entities,they protect the molecules in a most uneth-ical way,” said Dr. Hafez.

It is no wonder the Egyptian governmentstrongly disagrees with the argument ofsome multinationals that trade secrets,undisclosed information and data exclusiv-ity are all one and the same. The govern-ment argues that TRIPS signatories neveragreed to data exclusivity and that this def-inition is strictly a U.S. law, not an Egyptianor international one.

“Our hottest issue is TRIPS,” ensured Dr.Zakaria Gad, chair-man of the EgyptianP h a r m a c i s tS y n d i c a t e .“According toTRIPS, we have hada grace period of fiveyears, and thenanother five yearswhich is now coming to an end. There is alot of pressure on us to cancel this graceperiod and implement the regulations in theindustry. We did not accept that at all.”According to Dr. Gad, the pressure comesmainly from the trans-national companies

and a gathering cessation called Pharma.

“We are in a real fight with pharma and thetrans-nationals. Generic drugs in the USAconstitute about 52% [of the market], sothere is now a cessation for the genericindustry because the USA is not the mainmanufacturer of generics. There are a lot ofproblems coming from the USA.”

The importance of deregulation

“TRIPS are already there,” said Dr.Mohamed Roushdy, regional director ofPfizer Middle East. “Who out of the localcompanies are suffering? Nobody.”Despite Pfizer being one of the first MNCs

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The TRIPS agreement came into full effectin Egypt since the 1st of January 2005

Dr. Zacaria Gad

Bad TRIPs

Will TRIPS force local companies to pack up ?C

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to start manufactur-ing pharmaceuti-cals and the factthat it was actuallythe first USA phar-maceutical compa-ny to be establishedin the country, itstill struggles to

reinforce its position. “Firstly, we are astand-alone company, meaning that theacquisitions we made were with companiesthat didn't have major franchises in Egypt,unlike our competitors Sanofi or BMS.Secondly, most of our medications are com-peting in sectors that are underdeveloped orunder-diagnosed, such as cardiovascular orneuroscience,” explained Dr. Roushdy.These inconveniences did not prevent Pfizerfrom targeting a country like Egypt and try-ing to gain market shares.

“The Middle East is important no matterwhat the numbers are. It is the most vibrant

region in the world. Geopolitically, it is animportant and strategic region. If we consid-er, hypothetically, that in the near futurethere will be peace in the Middle East soon,most economists support the idea that theregion could represent 10% of the interna-tional trade,” he said.

If most of its products are number one in alltherapeutic segments, or to a lesser extentmaybe second, its number of products willbe limited, and in segments that are underde-veloped. “We can gain leadership mainly bycreating awareness so that we grow the mar-kets in hypertension, dislipidimia and neuro-science,” explained Dr. Roushdy. “The moreawareness we give to patients and education-al programs about the risks of these diseasesand other serious segments is the way we aregoing to attain leadership.” Lipitor is indeedthe number one product in most of its MiddleEastern markets, and the company expects tohave the same trend in Egypt for productslike Norvasic or even Zoloft.

Overall, Dr. Roushdy is convinced thingswill get far better in the country. In hisopinion, the “entry fee” today in Egypt islow. “Later, with strategies like the onesDr. El Gabaly and the new cabinet will putin place, we will certainly be movingtoward a market economy. When this hap-pens the economy will boom, as it did inthe early 1990s. Therefore, the improvingof the economy will make the entry fee tothe market higher. My advice to my peersis to take the opportunity now,” he said.

Becoming a center of excellence

The GSK strategy of penetrating theEgyptian market was, on the other hand, toacquire stable companies in the country.“As a MNC, we needed to consider thesocial-economic dimension of the country,and that our medicines need to be accessi-ble to as many people within the commu-nity as possible. So, we acquired two local

Dr. Amre Mamdough



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Sowing the Seeds of Growthgypt has all the skills to manufacture effective andgood quality drugs, but what is lacking here are mar-keting and R&D skills. Companies have to start catch-

ing up, because if they don’t, only a few players will be able toreally go global.” As explained by Minister El Gabaly, the chal-lenge of research will certainly prove decisive in the years tocome.

Developing new treatments for influenza, cancer and AIDSrequires an enormous investment of time and money. Researchand development drug companies claim they spend up to 15years and between $800 million and $1 billion to develop onenew molecule that can be used to make a new drug or drug com-ponent. Yet it costs next to nothing for a company to reverseengineer a drug to identify its components, then manufacture acopycat product. In this case, R&D drug companies are unableto recover their costs. This gives them little incentive to invest indiscovering more creative drugs.

The country has very accurately decided to compensate theseweaknesses by occupying niche markets. Herbal medicines def-initely stand among them. “Herbal medicines are coming backbecause the efficacy of conventional medicines is on the wane.They often provide safe, well-tolerated remedies for chronic ill-ness,” claims Dr. Ahmed Kelani, chairman and managing directorof MEPACO, the leader in the sector since its appearance 16years ago. “For centuries, people used plants for medication.However, no in-depth study of their curative properties was everdone, and the medicines had therefore not been standardized.”

Today, the story is different, and companies like MEPACO have

developed formulas from the medicinal plants and have stan-dardized them as per GMP requirements. “MEPACO was devel-oped for the purpose of being a medicinal plant pharmaceuticalcompany,” noted Dr. Kelani.

The company's vision is to tackle the market according to thera-peutic classes needs - meaning that for arthritis, for example,because the conventional drug was showing side effects, theydecided to develop a medical plant to cover this area. At the endof the day, MEPACO has covered more that 20 different thera-peutic classes. “We are not only developing food supplementsand vitamins, we are deeply involved in developing medication,”ensured Dr. Kelani.

Herbal medicines will never, in his view, replace conventionalpharmaceuticals. But, as a complementary medicine, he thinksthey deserve a better position. “If we see the total market, we

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Growing success for herbal medicine

companies in order to develop their portfo-lio to international standards. As a result, wecan provide medicines at all price ranges to100% of the population, rather than to just to10%,” explained Amre Mamdouh, chair-man and managing director of GSK Egypt.

This was part of its key success - along withother strategies of introducing new prod-ucts, seeking commercial excellence, focus-ing on people, rationalizing expenses andreducing the cost of manufacturing.

Like Pfizer, it was necessary for a companysuch as GSK to have a subsidiary in Egypt.“We are serving 70 million patients,”explained Mamdouh. “Every minute, 3000patients are benefiting from our medicinesin one way or another, and we are also pro-

viding solutions for eight out of ten diseases.By providing true value to a country, we pro-vide true value to the company as a whole.”

There are many advantages of producingmedicines in Egypt as, according toMamdouh, the manpower is very competi-tive, the technical abilities are very good,they have state-of-the-art manufacturingcapabilities and the cost of manufacturing isquite low in comparison to the West. “Allthese criteria indicate that Egypt could be acenter of excellence regarding export,” hesummed up.

Regarding the polemic issue of the pricingby MNC, Mamdouh is very clear: “Pricingby MNC is not exaggerated. From a pricingperspective, Egypt is one of the lowest in the

world. We asked for small price increasesjust to compensate the losses, and we re-inject the profits that make into R&D,because without R&D the pharmaceuticalindustry has no future. There are still a lot ofdiseases that cannot yet be treated eventhough we are in the 21st century.”

These arguments don't convince allEgyptian institutions, such as the EgyptianPharmacist Syndicate. “The net profit ofthese multinational companies is much toohigh,” said Dr. Gad. “How do you justifybillions of dollars of net profits and thenkeep 70% of these net profits? Why havepharmaceutical multinational and trans-national companies forgotten that the reasonfor their existence is to provide affordablemedicine for every human being on earth?”

Providing safe, well-tolerated remedies

Cou

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don't even represent 10%. I don't think this is enough. Herbalmedicine should be at least 30% of the market.”

The implementation of these complementary medicines mighttake time to change mentalities and sweep away prejudices. ToProfessor Dr. Ibrahim Abouleish, chairman of SEKEM Holding,a group of nine companies, “the biggest hurdle is that physiciansare not very well aware of herbal medicines and they are notused to prescribing these kinds of drugs, therefore we have totrain them. On the other hand, the patients are more used tochemicals and they are not aware that herbal medicines are anexcellent option to help in chronic diseases and acute cases. Themain problem is creating awareness of how important the herbalmedicine could be as a complement to conventional medicineregarding intensive healthcare.”

Taking advantage of mother nature

These misconceptions did not prevent a group like Eva Pharmafrom investing a big sum to produce their own molecules frommedicinal plants. Already ranking 13th as per IMS and one of thefastest growing companies in the industry, Eva Pharma, withroots dating back to 1935, is looking forward to become one ofthe top ten pharmaceutical companies in the country.

Just as MEPACO, its niche strategy was to explore and isolatesingle entities from natural products that might serve as leads fornew pharmaceuticals and which might address therapeuticalneeds. Hence it invests in the research and development of high-profile pharmaceuticals products and innovative delivery sys-tems. Eva Pharma fulfills a shortage in disease areas not ade-quately addressed by its main competitors in the country. Thus,they were the first to introduce thiotic acid for the managementof diabetic neuropathy, glucosamine and dropropizine, aninhibitor for the management of dry cough.

It is famous for using Egyptian plants that have been known forcenturies, like aloe vera and ferns. It also extracts new acids,which will be introduced into the market following clinical trials.

“Eva Pharma is not focused on NCE like the class A companiesthat can spend millions of dollars on R&D,” explained Dr.Mounir Armanious, chairman of Eva Pharma. “There are otherways, like ours. We take advantage of mother nature to extractAPI from the plants to make effective drugs. We are takingsomething that has been given for free by God - medicinal plants- and developing the know-how. We can see developed countriesare trying to do the same. The USA, for instance, is conductingstudies to extract insulin out of maize,” he explained.

Regarding the production of APIs, it seems that Egypt has diffi-culties in equaling countries like India or China, which todayhave the capacity to come out with new APIs almost every day.“In Egypt, we didn't take the right pace of speed,” regrets Dr.Armanious. “We lost track of time.”

Eva Pharma considers the only feasible option for an Egyptian

player will be to merge with an MNC or with a generic Americanor European company to help them penetrate the other markets.“I welcome this kind of cooperation,” he said.

To catch up, another option could be biotechnology, producingniche bulk drugs. Of course to accomplish such projects, agreater focus should be put on research. “Today we can see howsmall- and medium-sized companies are being very successful inthis segment. This could be the hope for our country, a geniusthat comes out with an efficient product, efficient in terms ofhelping to cure an important disease,” he hoped.

The issue of biotechnology

Egypt hasn't been characterized so far by its biotechnology activ-ities. Always looking ahead, a group like SEDICO, already con-sidered as the pioneers in producing insulin with their ownR&D, has decided to enter the biotech club by doing insulin,aprotinin, streptokinase, urokinase and growth hormone,amongst others. “We ventured into this domain because it is thetrend of the industry, and we can't afford to lag behind,”explained Dr. Ahmed Aly Aboul Enein, chairman and managingdirector of SEDICO. “As we do not have all the expertise, we areworking in close collaboration with other developing countrieslike China, India and Korea. This has made us explore andimprove our capacity in this segment.”



Minapharm Pharmaceuticals, who recallsthat the global market for biopharmaceuti-cals, which is currently valued at $50 billion, has been growingat an impressive compound annual growth rate of 20% over theprevious five years.

With over one-third of all pipeline products in active develop-ment being biopharmaceuticals, this segment is set to continueoutperforming the total pharmaceutical market and is assumed toreach $100 billion by the end of the decade. “This early estab-lishment of our Egyptian German biopharmaceutical partnershipconfirmed our timely embarkation on recombinant DNA tech-nologies. We have successfully launched three therapeutic pro-teins already and, to our belief, a great window of opportunity isopening in our home market and regionally,” concluded Dr. ElBardissi.



Dr. Mounir Armanious

SEDICO has been proven successful by managing to exportinsulin to Yemen and the Emirates. They are under final regis-tration in Romania, Moldova, Morocco and Turkey. “We arepaying special attention to the exports. Last year we made $10million. This year we are expecting to double these numbers,”he said.

With the globalization, Dr. Aboul Enein pleads for the merger ofall players in order to become recognizable. “There is no placefor small players in the industry,” he claimed. “The whales arejoining together to make a dinosaur. The multinational compa-nies merge to make a super dinosaur and swallow the small fish,which are mostly located in the developing countries. This can'tgo on. We have to join forces to make a strong Egyptian phar-maceutical industry.”

Rhein-Minapharm Biogenetics, a joint-venture betweenGerman Rhein biotech and Minapharm, has been able to intro-duce a biogenetics line in the Middle East. “The credibility ofour joint-venture model and our state-of-the art facilities,together with the need for the target therapeutic proteins, haveaccelerated the process of registration and pricing until marketlaunch,” explained Dr. El Bardissi, executive vice president of

“We take advantage of mother nature to extract

API from the plantsto make effective drugs”




hen the Chairman of MiddleEast Chemicals (MEC), Dr.Hossam Omar, started his pri-

vate business, pharmacists in Egypt weresuffering. Each pharmaceutical companycatered for the needs of pharmacies aroundthe country from their own factories inCairo and Alexandria and, consequently,pharmaceutical outlets had to wait for morethan one month to take delivery of theirorders. Moreover, they had to call in personat the state-owned pharmaceutical distribu-tion center and wait in long lines for theirturn to collect their needs.

“What put me ahead of my peers is thatvery early I realized that distribution wasone of the pillars for a successful industry,”recalled Dr. Omar. “Paradoxically, it was asector that nobody had paid attention to,and was the most problematic area in theindustry.”

The self-made professional who started hiscareer with the production of cosmeticsadded, “I am proud to say that, with approx-imately EGP2.9 billion (U$500 millions) inannual sales for the year ending December31, 2005, and 40.2% market share of phar-maceutical's distribution market, our size ismore than three times our closest privatelyowned competitor. This makes us the undis-puted leader in the healthcare marketplace.”

Since being established, Dr. Omar has

maintained a successful strategy of creat-ing new companies falling within thesphere of his business interests. Now,these companies are known as UnitedGroup employs more than 5,400 persons.Its core business includes import, distribu-tion of pharmaceuticals, the manufactur-ing of personal care products, pharmaceu-tical retailing, technology-based manage-ment and financial services, as well asmarketing.

The Egyptian pharmacists syndicate hasawarded Dr. Omar a certificate of appreci-ation and a gold medal for his role as a pio-neer and for his contribution to drug distri-bution development in Egypt.

Over the past 30 years, United Group hasdeveloped strategic alliances with fortunepharmaceutical companies, includingBristol-Myers Squibb, Pfizer, Novartis,Sanofi-Aventis, GlaxoSmithKline, Lilly,Servier and Schering.

Every week, United provides intensivedirect coverage to more than 29,000 phar-macies, 700 hospitals, healthcare centersand units throughout Egypt supplying theirrequirements from pharmaceuticals, para-medical and family planning devices. Thegroup has issued more than eight millioninvoices in 2005. United Group distributionnetwork is fully computerized andequipped with comprehensive Oracle

database systems. It comprises 108branches and depots, more than 80,000square meters of warehousing facilities,1,246 sales representatives and more than800 distribution vehicles. “Customer satisfaction is our number oneobjective and we continually examine ourbusiness process management and deploynecessary resources to meet that goal,” Dr.Omar emphasised.Hedef Alliance, a consortium betweenAlliance Boots (UK) and Hedef (Turkey),has now 50% stake in UCP (UnitedCompany for Pharmacists), the group'spharmaceutical wholesale arm. “We arevery proud that we now belong to thisinternational conglomerate,” Dr. Omarnoted.Leveraging our market leadership in Egyptand the strategic partnership with HedefAlliance, Dr. Omar is willing to export hissuccess and is looking for opportunitiesabroad: “Now that I have a solid businessin Egypt, I am looking to go beyond theborders. This year, I will put a foot inAlgeria and maybe in Saudi Arabia wherewe have high expectations, since they lackthe business model as we have. Now thatwe have established a European partnership,we are ready to go global,” he said.

Distribution : Follow the Leader

W“

Dr. Hossam Omar


Documents

EGYPT DEF DEF 2 15/11/06 23:44 Page 1 - PharmTechfiles.pharmtech.com/alfresco_images/pharma/2014/08/... · Dr. Sarwat Bassily, chairman and CEO of Amoun Pharmaceuticals, one of Egypt's