A New Law Governing the Egyptian Dr

On 25 August 2019, Law No. 151 of 2019 (the “Law”)[1] was published in the Official Gazette, formally establishing the Egyptian Drug Authority (“EDA”) and making it the entity in charge of the registration, trade, and control of pharmaceuticals, cosmetics, biologicals, and other products regulated under the Pharmacy Profession Law No. 127 of 1955; this in effect replaces the Ministry of Health with EDA in all pharmaceutical-related competencies. EDA has also replaced two of its subordinate departments, the National Organization for Drug Control and Research (“NODCAR”) and the National Organization for Research and Control of Biologicals (“NORCB”). Simultaneously, the Law also establishes the Egyptian Authority for the Unified Drug Procurement, Medical Supply, and Medical Technology Management (the “Unified Medical Procurement Authority” or “UMPA”), giving it the sole power to undertake all government procurement of medical products, equipment, and supplies against a fee. The new Law comes into effect six months from the day following its publication, and the Prime Minister is to issue its Executive Regulations within the same timeframe.

Background

A vast number of legislative texts govern the pharmaceutical sector in Egypt. On the forefront of these is the 1955 Pharmacy Profession Law in addition to several dated administrative decisions issued by way of a presidential decree but many times through internal Ministry of Health regulations. Up until the issuance of the new Law last month, the EDA had merely existed as “an initiative for an organization” operating under the Ministry of Health. This is according to EDA’s own mission statement, which also refers to EDA’s mandate of ensuring the safety and quality of human and veterinary medicine, biologicals, medical devices, cosmetics, dietary supplements, and pesticides.[2] Under this structure, three subordinate departments existed:

• The Central Administration of Pharmaceutical Affairs (“CAPA”)

It is in charge of the inspection, registration, licensing, pricing, importation, and exportation of pharmaceutical products. This includes licensing pharmaceutical establishments as well as deciding mandatory drug prices.

• NODCAR

Established in 1976,[3] NODCAR is responsible for quality control and ensuring the safety of pharmaceuticals, cosmetics, and pesticides. The organization assesses the compliance of new products with applicable standards prior to their registration and use in the market.

• NORCB

Established in 1995,[4] this organization ensures the safety and quality of local and imported biological products, such as serums and vaccines.

The New Law

• EDA

For over ten years now, the EDA has come to existence under the auspices of the Ministry of Health. The new Law, however, formalizes EDA’s existence by establishing it as a public services entity directly subordinate to the Prime Minister. EDA replaces NODCAR and NORCB in addition to any other administrative body or organization with the mandate of monitoring or exercising control over medical products and equipment (defined terms) granted under any other laws or regulations. It is to subsume the employees of the entities it has replaced only to the extent that they are included in a Prime Ministerial decree to be issued for this purpose; employees not included in this transfer decision will be distributed to other state administrative units. In addition, EDA is now the sole entity in charge of drug control, registration, trade, and supervision, all of which were previously subject to the mandate of the Ministry of Health. In light of this, EDA will, among other things, be in charge of issuing licenses for all pharmaceutical establishments subject to the Pharmacy Profession Law as well as issuing operational licenses to industrial establishments (working in pharmaceuticals and medical equipment) according to the Industrial Licensing Law No. 15 of 2017. EDA’s mandate also includes monitoring the importation, exportation, distribution, and storage of medical products and equipment and monitoring any negative effects that result from the trade of these products. EDA’s board of directors is headed by its chairperson who is appointed at the level of minister. The board has a detailed mandate in the Law which includes ratifying Egyptian pharmaceutical standards; regulating the registration and pricing of drugs and medical equipment; and issuing the Egyptian Pharmacopoeia. The board also determines the fees collected by EDA in exchange for its services, the thresholds for which are attached in an annex to the Law. Finally, EDA is to establish one or more petition committees and its employees who have been designated in a Minister of Justice decision have the right to enter locations for the manufacturing and storage of drugs or medical products for inspection.

• UMPA

The Law also establishes UMPA, making it directly subordinate to the Prime Minister. Like the EDA, UMPA’s board of directors is headed by its chairperson, also appointed at the level of minister. UMPA has the sole power to undertake all purchasing of medical products and equipment for all government bodies and entities. As per the Law, “unified procurement” is defined as all purchase operations to provide the state – including any public authority or other entities approved by UMPA’s board – with its needs in terms of medical products and equipment. “Government entities” are also defined as the Ministry of Health, its authorities/organizations, and its hospitals; state universities and related hospitals; other hospitals that are subordinate to ministries; and government research institutions. Non-governmental entities including private-sector and multinational organizations could also approach UMPA to request procurements to satisfy medical needs, given that the approval of UMPA’s board is obtained. Among other things, UMPA is in charge of preparing plans, programs, and rules for unified procurement from local or international sources, including an annual budget. Government entities requiring said procurement must follow UMPA’s standards and guidelines in assessing and requesting medical needs. In addition, UMPA will be in charge of administering a system for the storage, transportation, and distribution of medical products and equipment as well as monitoring government entity warehouses and administering a system for the maintenance of medical equipment post purchase. UMPA’s mandate also includes medical technology management.[5] UMPA is to put in place a comprehensive database for medical technology in all public health institutions and their warehouses in order to monitor needs, consumption, maintenance, and training. It also assesses medical technology to ensure that it is up to date and lays out a system for the electronic registration of local and international companies that operate in the field of medical products and services. UMPA can establish joint stock companies on its own or with others as well as join existing companies. Neither UMPA nor any other administrative entity is allowed to take loans in order to make medical purchases except with the approval of the Cabinet. The Law also amends a provision in the Universal Healthcare Law tasking UMPA with the role of conducting purchases to fulfill the needs of the Public Authority for Health Care established under that law. Finally, it is worth noting that all government procurement of medical products, devices, and supplies will be against a fee not exceeding 7% of the net value of purchased products/equipment, excluding customs, VAT, and other costs. The Law states that its Executive Regulations will determine the method for calculating this fee and cases of full or partial exemption from its payment. With the exception of entities that are directly funded from the state’s budget, entities requesting procurement must make payment of the requested product’s/equipment’s costs in advance of the purchase.   [1] Law No. 151/2019 establishing the Egyptian Authority for the Unified Drug Procurement, Medical Supply, and Medical Technology Management and the Egyptian Drug Authority, Official Gazette, Issue No. 34 (bis) (a), 25 August 2019. [2] Egyptian Drug Authority, “About Us”, available through this link. [3] Presidential Decree No. 382/1976 establishing the National Organization for Drug Control and Research, Official Gazette, Issue No. 20, 13 May 1976. [4] Presidential Decree No. 398/1995 establishing the National Organization for Research and Control of Biologicals, Official Gazette, Issue No. 52, 28 December 1995. [5] The World Health Organization (WTO) defines “health technology” as “the application of organized knowledge and skills in the form of devices, medicines, vaccines, procedures and systems developed to solve a health problem and improve quality of lives” (available through this link). The Law undertakes a definition of “medical technology” that is somewhat similar although with some expansion: “the application of organized knowledge and skills in the form of medical products, radioactive materials, serums, human vaccines, medical equipment, visual enhancers, medical transportation means, and procedures and systems developed to solve a health-related problem”.