Legal Framework Of The Pharmaceutical Sector In Egypt

• Introduction
• Regulatory Authorities
• Licensing Pharmaceutical Entities
• Warehousing
• Selling Pharmaceutical Factory
• Drug Registration
• Drug Marketing & Advertisement
• Drug Pricing
• Scientific Offices
• Drug Manufacturing
• Drug Distribution
• Drug Importation
• Drug Exportation

INTRODUCTION

Having an effective and enforceable legal structure for the pharmaceutical sector is an essential element in achieving the country's goals of accessibility, quality, and rational use of medicine.

This report aims to review the current pharmaceutical sector-related legal provisions in Egypt. The pharmaceutical sector in Egypt is mainly regulated by law No. 127 of 1955 on the Pharmacy Profession (“Pharmacy Law”) and other decrees and internal circulars issued by MoH and its affiliated bodies.

One of the constitutional rights under the Egyptian Constitution, as amended in 2014, is the healthcare right. Part of the healthcare right is the accessibility of medicines in an equal manner and at affordable prices. The Constitution mandates on the Government to spend at least 3% of the GDP on healthcare. Such percentage is supposed to gradually increase to reach the international standards.

REGULATORY AUTHORITIES

The Ministry of Health (MoH) is the governmental body in charge of regulating all issues related to the pharmaceutical sector. There are three main authorities affiliated to
MoH which are mainly responsible for the pharmaceutical sector:

CAPA

The Central Administration of Pharmaceutical Affairs (CAPA) is the regulatory body responsible for registering pharmaceutical products, issuing licenses for the establishment of pharmaceutical entities, and licensing the importation and exportation of pharmaceutical products. CAPA consists of four main departments, licensing, registration, inspection, importation and exportation. CAPA is responsible also for price regulation, as it is the final decision making body for setting the mandatory public price of drugs. In addition, CAPA evaluates clinical trials and post marketing studies of pharmaceutical drugs.

NODCAR

The National Organization for Drug Control and Research (“NODCAR”) is a public organization affiliated to MoH. It works as a quality control authority responsible for ensuring the quality, safety, and effectiveness of pharmaceutical products, medicines, cosmetics and insecticides. Samples of new products and products under registration are analyzed in the NODCAR laboratories to assess their compliance with the required standards and ensure their safety and effectiveness. No pharmaceutical product can be registered, marketed, advertised, distributed, imported or imported unless it obtains the necessary compliance certificate from NODCAR.

NORCB

All biological products like vaccines and serums are monitored, inspected, and released by the National Organization for Research and Control of Biologicals (“NORCB”). NORCB is a public organization affiliated to MoH that was established in 1995. Its main function is to ensure the quality, safety and efficiency of all imported, exported and domestic biological products whether for human being use or for veterinary consumption.

A long waited draft law for the establishment of a unified authority under the name of Egyptian Drug Authority ("EDA"), to be responsible for all drug related matter, is currently debated at the Egyptian House of Representative. Under the draft law, EDA shall be an independent authority reporting directly to the Prime Minister. Upon its establishment, EDA will supervise CAPA, NODCAR and NORCB.

LICENSING PHARMACEUTICAL ENTITIES

Pharmaceutical entities, as defined under the Pharmacy Law include:

• Public pharmacies.
• private pharmacies.
• Factories of pharmaceutical products.
• Drug warehouses.
• Drug agent’s warehouses.
• Stores trading in medicinal plants and its proceeds.

Before establishing a pharmaceutical entity, a license must be obtained from MoH. A pharmaceutical entity may not be used for any purpose other than that specifically provided under its license. Any changes or amendments to the pharmaceutical entity must be approved in advance and will be reflected in the entity’s license. The license is personal, and may not be transferred to a third party without the prior approval of MoH which will ensure that the transferee fulfills the requirements set out by the law.

A license may be cancelled if the licensed entity (i) does not commence its activities within 6 months from the issuance date of the license, (ii) is closed in a continuous manner for a period exceeding 1 year, and (iii) changed its the licensed location without prior approval of MoI.

The manager of a pharmaceutical entity must be a pharmacist with at least one-year practical experience in a governmental or national pharmaceutical entity. However, for private pharmacies and pharmaceutical intermediary warehouses, the manager may be an assistant pharmacist who is registered with the MoH. The manager may not manage more than one entity.

Establishing, operating, managing a pharmaceutical entity without a valid license is penalized by imprisonment for a period not less than one year and a fine not less than EGP 5,000 and not exceeding EGP 10,000. This is beside closure of the entity itself.

WAREHOUSING

Pharmaceutical warehouses are licensed upon fulfilling the requirement and conditions set out in Ministerial Decree No. 25 of 2009. Such requirements include, but are not limited to: (i) the area of the warehouse must not be less than 500 m2; (ii) the warehouse must have an independent entrance; (iii) the warehouse must have a refrigerated room for storing the pharmaceutical products; (iv) the temperature of the warehouse must not exceed 30 °C; and (v) the warehouse must be computerized.

Further, Ministerial Decree No. 380 of 2009 obliges any pharmaceutical institution to properly store its pharmaceutical products. The decree lays down the technical and health conditions for proper storage of pharmaceutical products.

Pharmaceutical warehouses are subject to periodical inspection. In case of non-compliance or the existence of expired, smuggled, imitated or un-registered drugs, the warehouse may be administratively closed and such defected drugs will be destructed without prejudice to the application of other relevant criminal liability.

SELLING PHARMACEUTICAL FACTORY

Obtaining a prior consent from CAPA before selling a pharmaceuticals factory or changing its ownership of management was a requirement until 2016 (as per Ministerial Decrees no. 300 of 2000 and 497 of 2014).

This approach has been changed by the issuance of the Ministerial Decree 37 of 2016 which allows the selling of a pharmaceutical factory or changing its ownership or management by submitting a mere notification to CAPA alongside certain undertakings related to the availability of the products.

Decree 37 of 2016 no longer requires a prior consent of CAPA as it clearly stipulates that any contradicting provisions are overruled. Notifications and undertakings need to be submitted according to with Decree 37 of 2016 are as following:

• Detailed report by the seller on the status of the factory and its compliance with the technical requirements, and the registered products and its availability in the market, its inventory, and the manufacturing and importation plans.
• An undertaking from the buyer to ensure the availability of the pharmaceutical products available in the market and not to undertake any changes that would result in affecting such availability during the first 6 months after transferring the ownership without obtaining a prior written approval from CAPA.

• According to Decree 37 of 2016, the buyer is obliged to keep the rights of the employee of the transferred factory. Violating this decree can result in suspending the license of the factory.

DRUG REGISTRATION

Detailed requirements and procedures for registration of pharmaceutical products, whether locally manufactured or imported, are listed in the Ministerial Decree no. 425 of 2015. Requirements and procedures differ according to the following categories of products:

• Imported fully finished products.
• Imported semi-finished products (Bulk), which are manufactured outside but packaged in Egypt.
• Locally products manufactured by licensed manufacturing factory in Egypt.

For the registration of any of the aforementioned categories of products, the applicant shall inquire about the status of the product in the relevant generic group/box. The price of the product shall be determined within sixty (60) days from the date of submitting the required documents.

For imported fully finished products, the applicant shall submit, among others, (i) an authenticated certificate of pharmaceutical product (CPP) from the country of origin (ii) an authenticated agency agreement or official authorization by the market authorization holder, who is the owner of the product registration; and (iii) a copy of the manufacturing contract with the foreign company (for licensed products).

For semi-finished products (Bulk), same requirements shall apply in addition to the packaging agreement between the importing company and the packaging company (in case the importing company does not have a licensed factory).

Annex 1 of the decree decides the maximum number of products registered for each generic group box including the brand or innovator. In case such number is reached, the registration of additional products shall be subject to a waiting list, unless one of the exceptions listed in the Annex 1 applies.

Annex 2 of the decree lists the generic groups/boxes and their forms. If a new pharmaceutical form is created, it can be added to Annex 2 after getting the approval of Technical Committee for Supervising Drugs at CAPA.

Locally manufactured products can be totally owned by an Egyptian entity or manufactured in Egypt under the license of a foreign market authorization holder. In this last case, the manufacturing can either be done by foreign market authorization holder or via third party manufacturer under a toll manufacturing agreement.

Applying to register a pharmaceutical product is only allowed to:

• Licensed pharmacists, doctors or dentists.
• Owners of local pharmaceutical manufacturing facilities.
• Owners of foreign pharmaceutical manufacturing facilities.
• Agents of foreign pharmaceutical manufacturing facilities.

Registration of a pharmaceutical products is renewable every 10 years. A renewal request shall be submitted to CAPA a year before the expiry date of the registration. If the ingredients of the products have changed, it will be go through the registration procedures of a new product.

An applicant who failed to renew the registration within this last year, will be given a grace period, with a maximum of two years from the expiry date. After the lapse of such grace period without finalizing the renewal procedures, the registration of the product will be cancelled.

According to Ministerial Decree No. 60 of 1998, pharmacies are prohibited from dealing in unregistered pharmaceutical products. They are also required, in case of receiving a prescription with unregistered product, to promptly notify CAPA and the Pharmacists Syndicate and to stamp the prescription with the pharmacy stamp indicating that such product is not traded.

MoH is authorized to ban any registered pharmaceutical product in case it is harmful to the public health as recommended by the Technical Committee for Supervising Drugs. In this case, product shall be deregistered and will be confiscated without any compensation or liability against the MoH.

DRUG MARKETING & ADVERTISEMENT

In order to carry out any marketing activities for a local or imported pharmaceutical product in the Egyptian market, a prior approval to this effect must be obtained from the Technical Committee for Pharmaceutical Control at MoH.

The procedures for obtaining such approval are detailed under Ministerial Decree no. 113 of 2004 on Pharmaceutical Marketing.

An application shall be summited to CAPA attached with the required supporting documents, technical information and samples of the product.

The applicant shall also submit the necessary information regarding the cost of such relevant product and its prices at the manufacturing state and other countries in which the product is traded. NODCAR shall analyze a sample of such product and notify CAPA of its result and opinion. Further, a pricing committee will undertake the determination of the price to be offered to public.

The Technical Committee for Pharmaceutical Control will issue its final decision on the requested marketing activity. If approved, the committee will grant the applicant a registration number which is considered as the approval for marketing the product in Egypt.

Advertisement of pharmaceutical products by any means, either in newspapers, magazines, radio, TV or any other modern advertising channels must be preapproved by the Supervisory Committee on Emerging Treatment Systems established by Ministerial Decree 255 for 1998. Whoever breaches the foregoing shall be subject to legal liability and the withdrawal of its professional license. According to Ministerial Decree 76/2000, the content of the advertisement of drugs, pharmaceutical products and dietary supplements will be monitored by the MoH which shall review the accuracy of the data and technical information to be announced in the advertisement. The advertisement shall abide by the rules of the laws, ministerial decrees, morals and traditions. An Arabic version of the package of the product and its labeling and prescription shall be submitted and kept with the MoH.

Violating these requirements can result in deregistration of the product and its withdrawal from the Egyptian market.

DRUG PRICING

Pricing of medicines is one of the thorny topics in Egyptian pharmaceutical sector. Pharmaceutical products in Egypt are subject compulsory pricing by MoH. Several ministerial decrees have been issued in this respect starting from Ministerial Decree no. 314/ 1991 regulating the price of locally manufactured drugs and pharmaceutical products according to their cost of manufacturing plus a pre-determined profit margin.

Thereafter, Ministerial Decree no. 373 of 2009 was issued to adopt a different pricing approach depending on the prices of such product in foreign countries. Such decree was subsequently replaced by the current effective Decree no. 499 of 2012 which adopts the external reference pricing system when determining the prices of human pharmaceutical products.

The reference pricing system relies on comparing the price of the concerned drug at other countries and set the price in Egypt at the least price therein.

The pricing shall be applicable for 5 years. Repricing will be requested by the concerned company holding the registration of the pharmaceutical product 3 months prior to the expiration of the 5 years’ period.

Prices can also be adjusted in any of the following cases:

• If there is an average increase or decrease of 15% in the currency exchange rates during one year as announced by the Central Bank of Egypt.
• If the concerned company submitted a request for reconsideration of the prices of its products by a maximum of 5% per annum. Such percentage shall be divided into quarter percentages.

SCIENTIFIC OFFICES

Pharmaceutical products of a foreign company can be registered in Egypt through a scientific office that is duly incorporated. Such offices can be established in Egypt for the purposes of registering pharmaceutical products, promoting, storing and distributing pharmaceutical samples to doctors, hospitals, clinics and the like.

Establishing a scientific office is regulated by virtue of the Pharmacy Law and relevant ministerial decrees (MoHDecrees No. 429/1976, 351/1994 and 425/2015). The procedures of setting up a scientific office of a foreign company would, primarily, entail:

• Appointing a commercial agent how is registered at the Commercial Agent Register and the Importer Register at the General Organization for Export and Import Control (GOEIC).
• Obtaining a license from CAPA in the name of the scientific office listing the products registered under the name of the foreign company.

The manager of a scientific office must be an Egyptian national who is a licensed member of one of the medical professions in Egypt (i.e. human doctor, veterinary doctor or pharmacist).

DRUG MANUFACTURING

In order to manufacture pharmaceutical product, a company must obtain a prior license from MoH and the Industrial Development Authority (IDA). This is in addition to registration at the Industrial Register affiliated to the IDA.

No nationality restriction exits in relation to the owners of the manufacturing company.

In 2007, MoI issued a decision to adopt the WHO Good Manufacturing Practices for Pharmaceutical Products (GMP) as the Egyptian guide for good manufacturing standards. Manufacturer of pharmaceutical products are required by virtue of the Ministerial Decree no. 539 of 2007 to abide by this guide otherwise the violating production line can be suspended.

Within a month from the date of applying for the license, a special committee formed by MoH (formed by virtue of Ministerial Decree 2 of 1994) shall visit and inspect the factory and decide whether it fulfills the technical and health requirements.

Every factory must have a laboratory equipped with the necessary devices to test the raw materials supplied to the factory as well as the final products. This laboratory will be supervised by a pharmacist who will be independent from those pharmacists who prepare the drug at the factory. Both the preparing and the supervisory pharmacists will be liable for ensuring the quality and validity of the products.

A company may manufacture pharmaceutical products at the third party’s manufacturing factory under a Toll manufacturing scheme. The manufacturing company must be registered in the toll manufacturing register at CAPA. A toll manufacturing agreement between the company and the third-party manufacturing factory shall be certified and approved by CAPA. According to the internal regulations issued by the MoH, in order for a company to be registered as a toll manufacturer, it must be, among others, owned 51% by Egyptian licensed medical professionals. The company must be managed by licensed pharmacist.

DRUG DISTRIBUTION

Pharmaceutical distribution companies must be licensed according to the requirement and conditions set out in the Ministerial Decree No. 25 of 2009. The Good Distribution Practices issued by CAPA shall be followed by warehouses for storing pharmaceutical products.

Drugs’ trading, storage or wholesale is not allowed except through distribution companies and warehouses which are licensed by MoH. Such companies and warehouses are obliged to deal only with licensed factories and registered importers for obtaining the drugs to be distributed. In this case, distribution agreements shall be executed to this effect. It is prohibited to store drugs which are not covered by a distribution agreement.

Distribution companies and drugs’ warehouses are required to promptly notified CAPA of any shortage in the availability of registered drugs within maximum one month from the shortage date, in order to take the necessary measures for curing such deficiency.

DRUG IMPORTATION

According to Ministerial Decree no. 174 of 1999, pharmaceutical products, medical requirements, cosmetics, home pesticides, diagnostic materials, food therapeutic and vaccines, may not be imported or released by the customs unless registered and approved by MoI in accordance with the Pharmacy Law.

According to Pharmacy Law, such products may neither be imported into Egypt nor released from the customs unless the following conditions are met:

The registration of the importing company with the Importers Register at the General Organization for Export and Import Control (GOEIC). In order to register in the Importers Register, an importation company must be fully owned and managed by Egyptian nationals.

The registration of the importing company at the Importers Register at the MoH and the registration of the relevant pharmaceutical products with the MoH. The products must be properly packaged. They cannot be imported individually or by piece.

The label must indicate the necessary information about the pharmaceutical product (i.e. the name of the factory which has prepared the pharmaceutical product or carried out its packaging, usage instructions, dosage, etc.).

Importation of pharmaceutical products are allowed only from the manufacturing company which are registered at MoI.

To ensure meeting the local market needs, importers are required to import enough quantities of the product on a regular basis according to a plan approved by the MoH.

Article 66 of the Pharmacy Law provides that any pharmaceutical product listed in a pharmacopeia may not be released from the Egyptian customs unless such product: (i) indicates the name of the pharmacopeia under which it is listed, (ii) indicates the date of its preparation and assembly, (iii) indicates that it follows the conditions laid down under such pharmacopeia, and (iv) is securely packaged. Imported products may not be released from customs without approval of MoH.

According to Article 68 of the Pharmacy Law, any imported pharmaceutical product (whether special or by virtue of a pharmacopeia) can only be released to the persons licensed to trade in such products. Individuals may import certain pharmaceutical products for personal use after acquiring the necessary exceptional permit from the MoH.

Without prejudice to any severer penalties provided under any other law, whoever imports, produces for trade, sells or offers for sale any pharmaceutical products or medical devices which the MoH has not issued a license for their use or trading shall be subject to fine not less than EGP 20,000 and not more than EGP 50, 000. Further, in case such crime was committed by the owner or manager of the pharmaceutical institution, the latter shall be closed for a period not less than one month and not more than one year. In case of recurrence of violation, the abovementioned penalties shall be doubled.

DRUG EXPORTATION

The exportation of drugs and pharmaceutical products is mainly regulated by the Ministerial Decree No. 379 of 1986. Under this decree, the exportation of drugs and pharmaceutical products is not allowed unless they are registered with the MoH. Pharmaceutical product listed under a pharmacopeia may not be exported unless their cards are certified by the MoH.

As a general requirement, any company undertaking exportation activities must be registered with the relevant exports register in GOEIC.

To ensure the availability of pharmaceutical products in Egypt, companies manufacturing such products are not allowed to export any quantities thereof in case they are not available at the local market. The competent department at CAPA shall be responsible for determining the existence of any shortage concerning such product.

Before exporting any pharmaceutical product, except for personal exportation, registration samples and bidding, the competent inspector in CAPA shall analyze a sample of each batch thereof at NODCAR which shall issue a decision regarding its conformity.

NODCAR is obliged to give priority to exported products in conducting its examination. However, in case it does not issue its decision within two weeks from the date of receiving samples, CAPA is entitled to permit the manufacturing company to export its products based on the analysis certificate issued by the company’s laboratories and upon its own responsibility.

Pharmaceutical companies licensed by CAPA as well as companies which manufacture products according to foreign manufacturing agreements, permitting the exportation, are allowed to export their products outside Egypt.

Medical chemicals can be exported if they have been recently analyzed by NODCAR and in compliance with the medical pharmacopeias and certified technical specifications.

CAPA allows the exportation of products with expired registration provided that their relevant re-registration files have been submitted to CAPA.

Exporting drugs from Egypt either locally manufactured or imported is prohibited without following the regulations of exportation issued by the MoH. Whoever violates the foregoing shall be subject to imprisonment and/or a fine of a minimum amount of EGP 500 and maximum amount of EGP 1000. The foregoing penalty shall be doubled in case of recurrence. In all cases, the products which are the subject matter of the violation shall be confiscated.

If you have any questions regarding this paper, feel free to contact us.

Our partners advise pharmaceutical multinationals on the full range of IP, antitrust, litigation and M&A. Our team have developed an extensive practice dealing with intellectual property and regulatory issues specific to pharmaceuticals.