The government has engaged in consultations with the private sector on the recently released State Property Policy Paper, which outlines ways to strengthen partnerships with the private sector across a range of economic activities, including in the pharmaceutical sector.
Due to the impacts of the Russian-Ukrainian war on the Egyptian economy, with some putting the overall economic losses since the conflict at 465 billion Egyptian pounds, the government’s decision to give a larger role to the private sector is part of the as part of its support for the national economy. economy.
The document sets out ways to increase the private sector’s contribution to the economy to 65% from the current 30%.
Multifaceted exchanges took place last week between government representatives and 60 experts from the health and pharmaceutical sectors with a view to developing them and strengthening the role of private actors.
Key proposals include plans to ensure the equitable distribution of private sector investment in the health sector among the different governorates, supporting the public-private partnership (PPP) model in integrated and university hospitals as well as in the Egyptian system of universal health insurance, and by expanding the state’s contribution to the supply of pharmaceutical raw materials and the production of antibiotics.
Speaking to Al-Ahram Weekly, Chairman of the Pharmaceuticals, Cosmetics and Home Appliances Chamber of the Federation of Egyptian Industries (FEI), Gamal Al-Laithi, said it was important to increase the sector’s share private sector in the health care and pharmaceutical industry in the current context. challenges.
He noted that while state-owned companies dominate 72% of healthcare and pharmaceutical activity, private players currently account for only 28%. “This is different from the situation in other countries where the private sector has the lion’s share of the activity due to its expertise as well as its financial capabilities,” Al-Laithi said.
Al-Laithi is taking part in consultations with the government on the future of the sector. He told the Weekly that the proposals and recommendations needed clear mechanisms to be implemented.
Proposals include expanding the PPP model, promoting privatization of the sector and merging medical product companies to help them deal with losses.
He said the recommendations revolve around three main types of partnership with the private sector, namely the sale of a number of state-owned medical production enterprises to the private sector, the implementation of a PPP model or the privatization of the management of the enterprise.
The state ownership policy document would enhance the role of the private sector in health and pharmacy by capitalizing on the latter’s vast experience and huge financing capacity, Hatem Al said. -Wardani, executive director of AstraZeneca at the Weekly.
“Egypt has good potentials that qualify it to implement a successful localization of the pharmaceutical industry and also to transform the country into a regional hub for pharmaceuticals,” he added.
This includes its unique geographic location, high rate of population growth, presence of a robust private sector, as well as the current political will that prioritizes giving the private sector a broader role in the economy, according to Al- Wardani.
He also added that Egypt has the infrastructure and human capital that allow it to succeed in its mission, in addition to the digital transformation policy which represents an effective element for the pharmaceutical industry in the market.
“In light of the state’s efforts to boost this industry, AstraZeneca plans to increase its investment and local production by 50% over the next three years,” Al-Wardani told the Weekly.
The State Ownership Policy Document defines nine types of partnership with the private sector in various economic activities. They include concession contracts, construction, operation and transformation (BOT) contracts, design, construction and operation (DBO) contracts, construction, financing, operation and (BFOT), Build, Own, Operate and Convert (BOOT) contracts, Build, Own and Operate (BOO) contracts, performance contracts, management contracts and possible privatization of a number of state-owned assets.
Al-Laithi said the state should invest in the production of drugs that require large investments in partnership with the private sector, including cancer and immunity treatments.
During the consultation, the head of the FEI Private Sector Health Chamber Alaa Abdel-Magid explained that expanding the role of private companies in the sector would require reassessing the quality control measures applied to them in order to pave the way for new establishments to join Universal Health. Insurance system.
He called for the redeployment of public investment in the sector to focus on preventive medicine, emergency care and reproductive health, while stressing the need for public investment in the health sector.
Head of the commercial department of Zeta Pharma, a pharmaceutical production company operating in the Egyptian market, Mohsen Hassan told The Weekly that establishing real partnerships with the private sector in the health and pharmaceutical industry was necessary to the state, investors and patients.
“The private sector benefits from many strengths, starting with significant financial capabilities, flexibility, rapid decision-making and efficient management of finances and resources. The private sector also has the ability to attract foreign investment and experience,” Hassan said.
He said Egypt lacked the capacity to produce medical raw materials, which made it dependent on imports.
“The private sector can play an important role in building this capacity and providing the experience needed to manage it. It will also help localize the pharmaceutical industry, which will boost the national economy by saving hard currency, reducing the demand for US dollars and reducing the country’s import bill,” Hassan said.
He called for these companies to be listed on the Egyptian Stock Exchange (EGX) to provide greater liquidity and improve business models.
He pointed out that the Egyptian pharmaceutical market has significant experience that could be used to improve the sector. The pharmaceutical market in the Gulf Cooperation Council (GCC) countries relies heavily on Egyptian leaders, for example.
According to the state ownership policy document, the government should gradually disassociate itself from a number of economic activities in favor of the private sector, while taking into account the strategic and security dimensions involved.
It promotes the upgrading of mechanisms for allocating assets to different economic activities, as well as the design of plans to deal with the impacts of state withdrawal, particularly in terms of labor and income, and the implementation of macroeconomic policy packages that would help stimulate the private sector. .
*A version of this article appeared in the August 4, 2022 edition of Al-Ahram Weekly.