Egypt. Where the pyramids stand tall, the cotton is extra long, and a canal can disrupt global trade. The country with a population of over 107 million and a GDP of over $400 billion.
But let’s talk about life sciences things – this is The Kable, after all. Over the past couple of decades, Egypt has made great strides in basic human capital development indicators. According to a recent World Bank report, life expectancy in Egypt has jumped from 67 to 73.9 years, under-5 mortality has shrunk from 61.5 to 21.5 deaths per 1000 live births, and with high immunisation levels, child health outcomes have started to look up.
A GlobalData report estimated the Egyptian pharmaceutical market at $3 billion in 2022, with generics claiming the largest share; the industry is expected to grow at a CAGR of 7% from 2022 to 2027. The report placed a $4 billion value on the country’s medical devices market in 2021, with a CAGR of over 3% during the 2022-27 period. And Egypt’s medical and pharma exports saw a significant jump over previous years, reaching $968 million in 2022.
The North-East African state of Egypt is the leader in pharmaceutical production in the MENA region, with estimates suggesting it produces over 65% of its pharma consumption needs. The country wants to strengthen cooperation with the private sector to transform itself into a regional hub in drug manufacturing. In 2021, Egypt opened the Gypto Pharma City in Greater Cairo. One of the largest pharma cities in the Middle East, it spans 45 acres and includes 160 lines to manufacture 150 million packages of medicines annually. This space is dedicated to manufacturing medicines for Covid, hypertension, cardiovascular conditions, kidney diseases, brain diseases and other neurological disorders. At a later stage, a portion of the city will also be devoted to the manufacture of cancer drugs and hormones. Moreover, the establishment of Egypt’s first plasma factory is also underway.
But the North-East African nation is currently in the thick of an economic crisis. Its currency has devalued by about a third since October. While official numbers peg inflation at 20%, including the massive informal economy puts unofficial estimates at a whopping 101%. Food prices are soaring while incomes go the other way. A combination of corruption, political unrest and government mismanagement combined with the effects of a pandemic, war and global recession. The IMF approved a $3 billion support package for the country in December, but for the 60% of Egyptians living close to the poverty line, things might get tougher in the coming year. Over the past decade, Egypt’s out-of-pocket healthcare spending remained over 60% of the country’s total, so this inflationary trend stands to make things a lot tougher for the Egyptian populace.
Which leads me to Egypt’s ambitions for a Universal Health Insurance System (UHIS), which it hopes to implement across the nation in a decade. In spite of its economic troubles, Egypt is going full steam ahead with its plans. With pilots initiated in Port Said in 2018 and then extended to the cities of Luxor and Ismailia, the six-phase plan will culminate with eventual implementation in Cairo. The implementation of the first phase is set to be completed before the end of the financial year, with officials suggesting that over 15 million people were registered in 2022. This ambitious plan has the potential to bring 100 million people under insurance coverage and transform healthcare provision. It will create opportunities for the pharma industry and potentially also digital health as this programme is supported by automation technologies as part of the Digital Egypt Strategy.
Egypt’s healthcare system needs to respond more effectively not only to changing financing patterns but also to the country’s changing disease burden. The disease burden here is shifting from communicable to non-communicable diseases. NCDs accounted for over 85% of all deaths, higher than the 78.5% average for the MENA region. A third of Egyptians are at risk of premature death from one of the main NCDs – cardiovascular disease, chronic obstructive pulmonary disease, diabetes, and cancer. Further, malnutrition, stunting and obesity are major causes for concern, as is a rapidly ageing population – all major changes that Egypt’s health and pension systems need to adapt to.
Where Egypt has done well is in its presidential initiatives, including 100 Million Healthy Lives, launched in 2018 and aimed at eradicating hepatitis C and treating non-communicable diseases. From having the world’s highest rate of hepatitis C less than a decade ago, Egypt is one of a handful of countries around the world that is on track to achieve the SDG linked to HCV elimination. With one of the most extensive public health campaigns, the country screened 60 million people and cured nearly 4 million in months, becoming a global leader in HCV elimination. Collaborating with private partners, Egypt has also conducted similar campaigns for the early detection and treatment of breast cancer, among other diseases.
Egypt’s localisation efforts are going strong, and the country is keen to attract private investments. The Sovereign Fund of Egypt and B Investments Holding have signed 2 agreements, committing over EGP 2 billion to specialised healthcare and pharmaceuticals distribution and trade services in the country with the hope of attracting more private finance. Affirma Capital and StonePine ACE Partners have announced a $20 million investment in Nerhadou, one of the largest and fastest-growing nutraceutical and pharmaceutical players and a pioneer in oral dispersible film manufacture in Egypt. And Egypt’s Vacsera is in talks with Sinovac to construct an integrated vaccine manufacturing plant in Egypt.
Late last year, Eli Lilly and Egypt’s EVA Pharma announced a collaboration to sustainably supply high-quality and affordable insulin to at least a million people with diabetes in LMICs. Eli Lilly has committed to supplying APIs to EVA at reduced prices and providing pro bono tech transfer so EVA can formulate, fill and finish insulin vials and cartridges. At COP27, AstraZeneca Egypt and the Egyptian Healthcare Authority joined forces to promote sustainability and resilience in healthcare.
In 2022, Pharma giant Bayer announced that it would partner with a local pharma company to set up an over-the-counter medicine production hub in Egypt; the company also announced plans to invest about $12 million in local manufacturing and re-launching 5 new consumer health-related products in the next 3 years. Egypt’s Gennecs Pharmaceuticals announced that it was investing $150 million to set up a multi-vaccine production facility and launch a vaccine research centre in Egypt, partnering with investors from the UAE and Saudi Arabia. Further, Saudi firm Jamjoom Pharma confirmed the launch of its new factory in Egypt, hoping to make further inroads into the African market.
The IMF’s outlook for Egypt’s economy is pretty bleak; it cut Egypt’s economic growth forecast for 2023 from 4.8% in July last year to 4.4% later in the year. But in spite of macroeconomic challenges, investments in the country from private and government sources look strong.
In the last year, Egypt has wowed us all at The Kable with the strides the country has been making. Egypt seems driven toward healthcare self-sufficiency and advancing health equity for its citizens. Egypt’s pharma manufacturing ambitions and healthcare transformations make it a market to look out for.
We’ve certainly got Kable eyes on the country.
