• Pharmaceutical pricing policies are out of sync with changing market conditions, including exchange rate movements, rising inflation, and increases in energy prices; operating costs; and interest rates.
• The current pricing scheme— a cross-reference pricing scheme that takes into account the prices of pharmaceuticals in 36 countries— is unfavorable to the industry. Under this scheme, the lowest price in any of the reference countries is used to guide the pricing of pharmaceuticals in the Egyptian market, with no consideration for the difference in distribution margins, which should be a key factor in pricing. Thus, the current system needs to be seriously and comprehensively reviewed in order to make it more responsive to market changes, and render investment in the industry attractive.

• Revisit the current pricing policy to bring it in line with the requirements of the global market and the practiced pricing methods. This should increase the volume of pharmaceutical exports, and make it commensurate with the size and capacity of the industry in Egypt.
• For new Common Technical Document (CTD) submissions for generics, price them at 65% of the price of the innovator or branded counterpart (the patented).
• Approve the pricing of registered pharmaceutical products, giving priority to alternative products that are in short supply or missing in the market.
• Expedite the re-pricing of registered pharmaceuticals, which are not yet marketed, even if their notifications have lapsed (these pharmaceuticals were priced prior to the floating of the Egyptian pound).
• Abolish the VAT on imported pharmaceutical raw materials, which are pre-blended and processed using two or more ingredients. At the same time, impose on them the 2% tariff rate prescribed for customs category No. 3003, rather than the 5%, tariff rate prescribed for customs category No. 3824, in addition to the 14%VAT. 

• The policy named the ‘Box’ , which regulates the registration of pharmaceuticals in Egypt, is abused by international pharmaceutical companies that hold the patents. These companies fill up a particular ‘Box’ with phantom products, thereby locking up the ‘Box’, and thus hinder effective competition of local companies, and limit the availability of affordable pharmaceuticals in the local market. 

• Abolish the ‘Box’ system, and allow Egyptian companies to produce and register generic pharmaceutical products.
• Over the coming two years, complete the registration of all pharmaceutical products that are currently in the registration queue.

• In November 2018, Ministerial Decree No. 654 of 2018, concerning the registration of human pharmaceuticals, was issued. It stipulated that under certain conditions, biosimilars registration applications, which exceed the number of pharmaceuticals allotted to a biosimilar ‘box’ (referenced in Ministerial Decree No. 425 of 2015) will be accepted. Specifically, applications will be accepted for pharmaceuticals listed as in short supply and with no substitute, during the year preceding the issuance of the Decree, or in other cases determined by the Central Administration for Pharmaceuticals Affairs, according to market needs.

A national body to oversee the safety of pharmaceuticals, the Egyptian Drug Authority (EDA), was created in 2019. However, the following requirements pose obstacles for manufactures:

• The requirement that manufacturers obtain an import approval for each consignment of imported raw materials; the additional fees associated with this requirement result in raising the price of the final.
• The extreme processing delays in obtaining certificates of Free Sale and certificates of GMP negatively affects the exportation of products.
• The Central Administration for Pharmaceutical Affairs refuses to accept the trading certificates for non-sterile products, which are issued by the IDA and sent by express mail.
• Exporters must fulfill additional requirements to be able to export their products, including a commitment to provide production materials for a period of 6 months; receiving visits for verification; and obtaining the approval of the Public Authority for Unified Procurement.

• Abolish the requirement that manufactures obtain an import approval for each consignment of imported raw materials.
• Expedite the issuance of the certificates of Free Sale and the certificates of GMP.
• Refrain from issuing any new export requirements without consulting with exporters.

• On August 25, 2019, the President ratified Law No. 151 of 2019; Article 14 established the Egyptian Drug Authority (EDA), and Article 16 specified its mandate. According to Article 14, “A public service authority, called the Egyptian Drug Authority, is created; it has a juridical personality and is affiliated with the Prime Minister; the location of its headquarters is to be determined by the Prime Minister, and the board of directors may decide to open additional locations.” 
• Article 16 stipulates that “The new Authority aims to organize, implement, and control the quality, effectiveness, and safety of the medical preparations and devices provided for in the provisions of this Law.  It is also tasked with enforcing the  provisions of  the current law governing the practice of pharmacy, provided that they do not contravene any of the provisions of this law. To accomplish this, it shall also assume all the necessary powers, functions and legal actions.”

• Registration of new pharmaceutical products is a very lengthy process even though these products have already been approved and licensed in developed countries, which should serve as a solid reference for pharmaceuticals quality control testing.

• Grant instant approval of pharmaceutical registration applications if the product concerned is registered in any two countries that are considered advanced in the pharmaceutical industry.
• Reform the registration process of pharmaceutical factories. The process should entail submitting a Common Technical Document (CTD) dossier and payment of LE 120,000 registration fee; the ‘Box' system should be discarded in the process.  The registration process should be completed in less than six months, and there should be a no set limit on the number of dossiers that can be submitted each month. 
• Pharmaceutical factories should obtain international accreditation from the World Health Organization (WHO), the U.S. Food and Drug Administration (FDA), GTA, and the European Medicines Agency (EMEA).

• The absence of a clear legal framework governing the pharmaceuticals and medical devices sector.

• Develop a new legal and institutional framework to govern the pharmaceuticals and medical devices sector.

• The cosmetics registration process is unnecessarily long and costly and hinders the expansion and competitiveness of the local industry.

• Registration of cosmetics should be based on the product formula rather than the product Stock keeping Unit (SKU); instant approval of registration applications should be granted if the product is registered in any two developed countries.

• The inclusion of cosmetics in the definition of pharmaceuticals is problematic as they will be subject to the same registration, pricing, and testing rules and procedures applicable to pharmaceuticals. This is contrary to the nature of the industry and how cosmetics are regulated across most countries globally. Cosmetics are non-medical products, and are treated as such; they are governed by separate laws and regulations in many countries (e.g., European Union countries, the US, Saudi Arabia, the Arab Gulf States, and all African countries). Categorizing cosmetics under the rubric of pharmaceuticals is likely to have a significant adverse impact on the industry, and its ability to attract future investments, which was estimated at approximately LE 18 billion in 2018.
• The definition of cosmetics is inconsistent with the definition currently adopted in Egypt, which agrees with the internationally recognized definition of cosmetics. 
• The draft law includes mandatory standard specifications for cosmetics.
• The controls and procedures regulating the importing, exporting, registration, and pricing of cosmetics go against the nature of the product itself. 
• The absence of a clear definition of the term “pharmaceutical entity”, which is to be licensed under this law. 
• The release of imported medical products and other materials that fall under the jurisdiction of the Egyptian Drug Authority “EDA” is not allowed before all required tests and analyses are completed.
• The trading of domestic pharmaceuticals and other related products that fall under the jurisdiction of EDA is not allowed before all required tests and analyses are completed.
• Absence of a clear grievance processing procedures, including the specific time frame for filing a grievance and receiving a determination on it.   
• The fees associated with the record-filing and inspection of cosmetics are excessively high. 
• The cosmetics industry is a fast- moving and changing industry, where products develop periodically and 25% of the used formulas change annually. Thus, applying the rules and regulations pertaining to medical and pharmaceutical products on cosmetic products will hinder the development and prosperity of the industry.
• Requiring that each shipment of cosmetic products be analyzed will cost the government and the industry large sums of money for intangible benefits, and does not provide any assurance that the products are safe for consumers. This requirement is largely applied to companies and products that conform and comply with required standards, while many cosmetic products illegally reach the Egyptian market.
• Requiring that cosmetics be subject to testing prior to their release from customs release and their placing on the market is inconsistent with the global trend in cosmetic product control and analysis, which rely heavily on in-market control; this is more appropriate to the nature of the products, their volume of circulation, and the degree of potential health risks associated with using cosmetics, compared to other medicinal and pharmacological products.

• Develop effective implementation mechanisms to facilitates the enforcement of the law. The mechanisms should be appropriate to the nature of the cosmetics market, which differs drastically from that of pharmaceuticals.  FEI’s recommendations should be taken into consideration when developing the executive regulations of the law.
• Issue separate executive regulations to govern the cosmetics industry; the regulations should be appropriate to the nature of cosmetic products that are not used for medicinal purposes. 
• Adopt the internationally recognized definition for cosmetics— “Any product containing one or more substances intended for use on the external parts of the human body, including skin, hair, nails, and lips, or on the external parts of the genitals, teeth, or mucous membrane of the oral cavity for the purpose of cleaning them, or perfuming them, or protecting them, or keeping them in good condition, or changing and improving their appearance, or correcting body odors and improving it”.
• Delete the reference to “mandatory standard specifications” and replace it with “mandatory technical regulations based systems adapted from globally recognized systems, such as those adopted in EU countries.
• Cosmetics should not be subject to product registration requirements but to a notification system. This aligns with practices in EU countries, Saudi Arabia, as well as all East Asian countries, and is in line with the discussions that took place between the Cosmetics Sub-Chamber at FEI, and the Central Administration for Pharmaceutical Affairs as directed by the Minister of Health and Population.
• Cosmetic products should not be subject to an enforced pricing system 
• due to their nature, the manner in which they are traded, and being consumer products that are used regularly and daily (shampoo, skin and shaving creams, and toothpaste). 
• Include a definition for pharmaceutical entities.
• Institute an in-market control system for cosmetic products to protect consumers.
• The time frame for filing a grievance must be within 15 days from the receipt of the notice of the decision. 
• Inspection should be limited to accessing and reviewing records, books, and other documents related to the products and manufacturing processes; manufacturers should be given sufficient time to provide the required documents. 
• Include an article in Law No. 151 of 2019 to mandate the issuance of separate executive regulations to govern the cosmetics industry; the regulations should be informed by the draft paper under discussion between and the Central Administration for Pharmaceutical Affairs, and the Cosmetics Sub-Chamber at FEI. 
• Develop a separate fee schedule, including reasonable fees for the administration and testing of inspecting cosmetics.
• Similar to special food  products, registration of cosmetic products should be based on the product category and not the retail package.  

• According to Law No. 151 of 2019, cosmetics are defined as “any preparations developed for use on the external parts of the body, teeth, or the mucous membrane of the oral cavity for the purpose of cleaning them, or perfuming them, or protecting them, or keeping them in good condition, or changing and improving their appearance, or any other existing preparations, or yet to be developed and will be categorized as cosmetics according to international standards”. 
• Article 17, Section 2, Item 3 of the law vested EDA with the responsibility, among several  other executive responsibilities, of inspecting and analyzing cosmetic products. It stipulates that EDA will have the responsibility to inspect and analyze “pharmaceuticals, and biological preparations, medicinal plants and herbs, cosmetics and all other similar or related products, according to international standards and references to verify their quality, validity, efficacy, and safety, as well as ensure the compliance of pharmaceuticals with pharmacopoeia requirements and the mandatory standard specifications approved by EDA”.
• FEI will continue to engage and advocate for improving the Executive Regulations to better serve the needs of the industry. 

• The executive regulations of Law No. 151 of 2019.

The following elements should be taken into consideration when developing the executive regulations of Law No. 151 of 2019.

• Amend Article 1 of Chapter 1, Definitions, by including the following: “Medical products and devices are the medical products and medical devices as defined in Clauses 2 and 3 of Article 1 of the law”.
• The fee schedule included in Law 151 of 2019 should make reference to medical devices. 
• Ensure making reference to the European standards that are adopted by medical equipment and laboratory reagents manufacturers, who have ben l under the supervision of the Ministry of Health for the past 20 years.  
• Licensing local factories and warehouses: Factories should obtain their licenses from IDA and EDA to ensure that they adhere to GMPs, which are included in ISO 22716 or its equivalent.
• Oversight, inspection and market surveys: EDA must assume the responsibility to overseeing, and periodically inspecting cosmetics establishments, including factories, warehouses and places of sale. In carrying out their responsibilities, inspectors should be vested with law enforcement authority and powers. To ensure product compliance, EDA’s inspector may enter cosmetics factories, warehouses and places of sale for the purpose of inspection; they have the right to review the relevant records and documents, as well as collect samples of cosmetics products for inspection and analysis in the EDA’s laboratories or other accredited laboratories.
• Adopt an Egyptian system for cosmetic products that aligns with international practices adopted in EU countries, Saudi Arabia, as well as all East Asian countries; adopting such a system promises to expand Egypt’s cosmetics exports.
• Cosmetic products should not be subject to registration requirements; a notification system, which is adopted worldwide, should be used instead.
• Use international standards as a reference for setting the mandatory standard specifications for cosmetics. 
• Institute an in-market control system for cosmetic products instead of requiring that products be tested prior to being placed on the market. In-market control system, which relies heavily on carrying out the needed testing while the product is on the market, is more appropriate to the nature of the cosmetic products, their volume of circulation, and the degree of potential health risks associated with using cosmetics, which is drastically lower than that of other medicinal and pharmacological products. This system will ensure the safety of customers, especially that many cosmetic products reach the Egyptian market in an illegal manner.
• Include representatives from the Cosmetics Sub-Chamber of FEI’s Pharmaceutical Chamber in the technical committee that will be set up for developing the executive regulations of the law. 
• Exceptional Measure: Take advantage of the existing production capacity in the cosmetics sector to meet urgent needs; allow cosmetics manufacturers to obtain alcohol in order produce disinfectants for hospitals and other facilities.

• The establishment of pharmaceutical and medical device factories and the registration of their products is not linked to EU-based registration system.

• Adopt the EU-based registration system and approve a third party to implement it via the EDA.

• The lack of a futuristic vision or a short- or long-term plan for the pharmaceutical sector; this has created administrative hurdles and conflict among the various competent agencies. 

• Expedite the development of a strategic vision for the pharmaceutical sector to guide its direction in the future; ensure the engagement of all stakeholders in the process. 

• The lack of adequate and clear definitions, as well as the persistent and intentional conflation of pharmaceutical and non-pharmaceutical (medical devices) industries, which are different; this lack of differentiation poses threats to the non-pharmaceutical industries

• Make the necessary distinction between both industries, and ensure that they are treated separately. 

• The introduction of the term ‘medical preparation’ to “obliterate the identity” of “pharmaceutical preparation”.

Do not conflate ‘medical preparation’ and ‘pharmaceutical preparation’.

• Imports of medical appliances (for the benefit of public hospitals and universities) are granted exemptions under Chapter 4 of the new Customs Law; this undermines the competitiveness of local industries as they do not enjoy the same exemptions, which range between 5-30%, on imports of production inputs; thus, both domestic and foreign investors are disincentivized from investing in these industries.

• Eliminate any preferential treatment given to imported products or grant domestic manufacturers the same advantages; develop an investment plan to encourage the production of needed products that are currently imported, including making available low-interest, medium and long-term loans.

The lack of a consistent export assistance strategy.

• Ensure that banks offer low-cost export finance facilitation services.

• Ineffective oversight over the legal and illegal markets for medical devices—failure to follow a robust supply chain monitoring process to detect informal markets.  

• Enforce the law, and criminalize the sale and purchase of unregistered medical devices.  

• Currently, the government is heading in the right direction with regard to transforming the domestic single-use syringes industry, moving from the conventional to the full-safety model. That said, this shift is expected to take more than 18 months, required for manufacturing the needed machines and equipment,  as well as register the products in Egypt.

• Provide the necessary support to the single-use syringes factories, which total 16 and employ approximately 4,800 workers; grant them a three-year transitional period to complete the shift.

• Egypt bans the importation of used medical devices, and does not make a distinction between electronic and non-electronic ones. Such devices do not pose any health risks, and many are given as donations from reputable medical establishments.  Additionally, the procedures for importing any medical device or equipment is too cumbersome.

• Review all import procedures related to medical devices, and do not restrict importation to agents. At the same time, develop standard specifications for medical devices.

There are number of concerns regarding the Executive Regulations of Law 151 of 2019, including the following:

• EDA’s is given oversight responsibly over the manufacturing of medical devises, which is primarily an engineering industry; EDA lacks the technical and engineering expertise to fulfil this responsibility, which will negatively impact the engineering industries in Egypt.
• The overlapping jurisdiction between EDA and IDA regarding the licensing of factories that produce medical devices.
• The authority to accredit factories and medical products has been transferred from the Egyptian Accreditation  Council to EDA.
• The imposing of price controls on medicinal products, which are sensitive to market conditions and changes. Thus, it is not possible to fix prices; more so in any case, this requirement  contradicts what is stipulated in the Investment Law.
• EDA did not set any guidelines and specifications for registering medicinal products;  at the same time, it is not allowing the trading of any product without being registered.

• Take the necessary action to immediately halt the implementation of the Executive Regulations; put forward Law 151 of 2019 for discussion and ensure that all stakeholders, including technical and oversight agencies, are involved to provide the needed support for the medical devices industry.