The New Egyptian Drug Authority and the Procurement of Medical Supplies and Technology

By Omar Sherif and Mariam Osman | 25 November 2019

The long-awaited law by the pharmaceutical sector has finally been issued by Law No. 151 for the year 2019 (the “Law”) and was published in the Official Gazette on the 25th of August 2019. The new Law establishing the Egyptian Drug Authority (“EDA”) and the Unified Medical Procurement Authority (“UMPA”) shall enter into force 6 months from its publication. The executive regulations of the Law are also expected to be issued within 6 months.

The EDA

The EDA is established as a public service entity and reports directly to the Prime Minister. The EDA undertakes all organizational, executive and supervisory roles with regard to pharmaceutical products and medical equipment. The EDA, therefore, replaces the Ministry of Health in all pharmaceutical related mandates. It also replaces the National organization for Drug Control and Research (the “NODCAR”) and the National Organization for Research and Control of Biologicals (the “NORCB”).

In accordance with the Law, the EDA is the only entity in charge of drug control, registration, trade and supervision. The EDA is responsible for issuing operational licenses to pharmaceutical industrial establishments.

The EDA will also monitor the importation, exportation, distribution and storage of medical products and equipment, including any negative effects that result from the trade of said products.

The EDA shall establish grievances’ committees before which the EDA’s administrative decisions may be challenged. The Law sets forth the constitution of such committees.

EDA’s employees designated by a decision of the Minister of Justice shall have investigative rights with regard to drugs’ and medical equipment’s manufacturing and storage facilities and the right to access all relevant documents and information.

The EDA’s board of directors

The EDA’s Board is mandated, inter alia, to ratify Egyptian pharmaceutical standards and regulating the registration and pricing of drugs and medical equipment.

The board is responsible for issuing the Egyptian Pharmacopoeia. Further, it determines the EDA’s governmental fees for its services in accordance within the thresholds outlined in the Law.

The UMPA

The UMPA is subject to the control of the Prime Minister. The chairman of the UMPA’s board of directors is appointed at the level of minister.

The responsibilities of the UMPA

The Law outlines the mandate of the UMPA, which includes:

  • Purchasing of pharmaceuticals and medical products and equipment for the relevant public sector entities. As for the private sector and multinational organizations, they can request procurements to satisfy their needs; such requests are subject to the approval of the UMPA’s board of directors.
  • Preparing plans, programs, and rules for unified procurement from local or international sources. In addition, the UMPA prepares an annual budget for such procurement.
  • Managing a system for the storage, transportation, and distribution of pharmaceuticals and medical products and equipment. It also monitors warehouses of governmental entities and manages a system for the maintenance of pharmaceuticals and medical equipment post-purchase.
  • Managing medical technology and establishing a comprehensive database for medical technology in all public health institutions and their warehouses in order to monitor needs, consumption, maintenance and training. It will also assess medical technology to ensure that it is up to date and lay out a system for electronic registration of local and international companies that operate in the field of medical products and services.
  • Establishing joint stock companies on its own or with others as well as joining existing companies.

Governmental agencies are prohibited from purchasing pharmaceuticals or medical products and equipment directly and not through the UMPA, except in cases of urgency and following specific requirements. The UMPA is prohibited from borrowing funds for its purchases without obtaining the prior approval of the Cabinet.

All government procurement of medical products, devices and supplies will be against a fee not exceeding 7% of the net value of purchased products excluding customs, VAT and other costs.

The Law’s executive regulations will determine the method of calculating this fee and cases subject to full or partial exemption from its payment.

Market reaction

Prior to the issuance of the Law, the official representative of the pharmaceutical syndicate said in a statement: “This Law will have a ‘magical effect’ on solving the crises facing the supply of Egyptian medicine, in maintaining its strategic stockpile and in preventing the state from suffering from drug shortage crises”.

Similarly, the vice president of the pharmaceuticals chamber of the Federation of Egyptian Industries said in a statement: “The EDA will be the radical solution for all the problems with pharmaceuticals in Egypt. It will attract investments in the Health Care sector”.