Egypt’s pharmaceutical industry is in flux. In 2024, revenue increased 42% compared to 2023, according to IQVIA, a medical think tank. Most of those sales were locally made products that accounted for 91% of local demand, according to government data.

That increase in sales revenue is a result of pharma companies raising prices after receiving government approval rather than volume growth. According to IQVIA, units sold fell 3% in 2024. 

For 2025 and beyond, new factors will come into play thanks to the government’s commitment to creating a friendly business environment for pharmaceutical producers. 

“Egypt is already one of the most promising pharmaceutical manufacturing markets in the region,” Ali El Ghamarawy, chairman of the Egyptian Drug Authority (EDA), told the media in July. “It has the potential to become a regional center for pharmaceutical production and distribution.”  

The goal is to attract multinational companies to enhance training of local talent, foster more innovation and produce the latest medicines not currently available locally. “That aligns with Egypt Vision 2030,” El Ghamarawy added. 

Local market dynamics

Egypt is home to between 170 and 200 pharmaceutical companies. According to a report from PharmaComex, a research firm, while a small fraction of those companies represent foreign brands, “they account for 44% of the market in terms of sales.”

Local production heavily relies on foreign markets, as “almost all raw materials for local manufacturing need to be imported,” the PharmaComex report said. About 75% of Egypt’s pharma imports are active ingredients for domestic producers. 

In terms of production volume, the report noted, “Egypt has the largest drug manufacturing base in the Middle East and North Africa, accounting for nearly 30% of the regional market,” PharmaComex said.

Around 70% of that production is generic medicine, where manufacturers use expired patents to produce medicines identical to branded ones. Generics are noticeably cheaper than their branded counterparts, as their producers don’t incur any R&D costs. 

That cost advantage is vital in Egypt, a low-middle-income nation based on World Bank metrics, because “the lack of a comprehensive health-insurance system [means] pharmaceutical sales are based on out-of-pocket expenditures as consumers find self-medicating to be the cheapest form of treatment,” the PharmaComex report said. 

Government role

Per a 2019 regulatory update, the EDA issues and supervises implementation of quality and safety standards for locally produced and imported medicines. It also participates in drafting new regulations with the Ministry of Healthcare and other relevant agencies. The EDA also maintains databases of all pharmaceutical products. 

The Authority is responsible for raising public awareness of the importance of visiting doctors to get accurate diagnoses, adhering to prescription instructions, and alerting the public and pharmacies to fraudulent medicines or contaminated batches. 

In December, Egypt became the first country to receive the World Health Organization (WHO) Africa-only Maturity Level 3 (ML3) certification for medicine and vaccine regulations. “This accomplishment underscores Egypt’s commitment to ensuring the availability of safe, effective, and high-quality medical products for its population,” the WHO press statement said.

In July, the EDA issued the Egyptian Pharmacopeia, a scientific and legal reference document containing the chemical details, physical properties, test results, and permissible limits of impurities for 2,500 drugs out of a targeted 3,400.

El Ghamarawy also announced simplified registration processes for pharma producers that want to license “modern medicines.” The EDA has yet to define “modern medicines.”

Lastly, he said the EDA will start implementing a “track and trace” regulation in November for all national establishments that sell pharmaceutical products. Its primary purposes are to ensure counterfeit medicines are not sold nationwide and withdraw expired or nearly-expired drugs from pharmacy shelves. 

Localization efforts

Despite accounting for more than 90% of local demand, the government is looking to increase the localization of pharma products. El Ghamarawy said the strategy aims to “reduce Egypt’s reliance on pharmaceutical imports” as well as build local capacity to increase exports. 

In April, local producer Gypto Pharma and U.S.-based Dawah Pharmaceuticals agreed to build a manufacturing facility in Egypt. During the announcement event, U.S. Ambassador Herro Mustafa Garg said, “The critical element of this landmark agreement between Dawah Pharmaceuticals and Gypto Pharma is the supply of state-of-the-art U.S. machinery, equipment, and technologies along with the know-how and expertise to expand the reach of Egyptian pharmaceutical production throughout Africa and the Middle East.”

In May, Gamal El Leithy, chairman of the Chamber of Pharmaceutical Industry at the Federation of Egyptian Industries, told Asharq Business the sector should see EGP 4 billion ($82.5 million) in fresh investments with 20 new production lines expected to come online this year. 

He said those facilities will mainly produce semi-finished products that are currently imported. The EDA aims to ultimately reduce the government’s $3 billion annual pharma import bill. 

In addition to enticing pharma manufacturing investments, the government is building the next generation of pharma professionals. In August, the Ministry of Health signed a cooperation protocol agreement with the Ministry of Education, EDA, and Technological Institute for Pharmaceutical Industries in Rome to develop five specialized schools that merge technology with pharmaceuticals and healthcare.    

Graduates will hold dual accreditation certificates from Italy and Egypt. The courses teach international standards set by Italy’s clinical trials, pharma regulatory bodies, and the WHO’s Good Manufacturing Practice and Good Laboratory Practice standards.

Export boost?

Egypt’s  ML3 certification will be crucial in strengthening the presence of Egyptian medicines in existing foreign markets and opening new ones, according to the PharmaConex report. “Although the export base is low, the export growth is expected to be faster than that of Egyptian drug imports,” it noted.

In August, El Ghamarawy announced plans to attain ML4 certification, which includes integrating digital technology in Egypt’s legislative framework. 

Another vital step is normalization of approval and licensing procedures with a growing number of potential export markets. To that end, in July and early August, El Ghamarawy met with representatives from the Philippines, Belarus, Uzbekistan, and Malawi to discuss regulatory alignment. He also signed relevant MoUs with Brazil and Senegal. 

Those efforts should boost exports. Fitch forecasted Egypt’s pharma exports would grow almost 40% between 2025 and 2029.

That “will contribute to narrowing the pharmaceutical trade deficit by reducing import dependence and enhancing export revenues through increased local drug production,” Fitch said. “In 2025, the trade balance [deficit] is projected to be $2.7 billion, with only a slight widening to $2.9 billion by 2029.”

However, the proverbial “elephant in the room” is whether local medicine production capacity can grow at a faster pace than local demand. That is essential for increasing exports, as “Pharma producers must prove they have several months worth of stock of a medicine before the EDA gives them a license to export,” El Ghamarawy said in an August press statement. “Exports will not be at the expense of meeting local demand.”