SOAS Research Online

Abstract

This thesis is an assessment of the performance of the Egyptian pharmaceutical industry in the context of am international market for drugs which is dominated by the operation of multinational firms. Chapter I begins with an analysis of the determinants of demand for drugs, followed by a definition of terms and a classification of pharmaceutical products according to their therapeutic usage and the technical processes involved in their manufacture. Section 3 of Chapter 1 describes the structure of the international market for drugs, exploring the major factors responsible for a significant rate of concentration in the industry, an excessive amount of expenditure on innovations and promotion, and unreasonably high prices. Section 4 of Chapter I singles out the specific problems concerning devleloping countries in their acquisition of drugs and examines the arguments so far presented on the subject. Chapter II traces the development of the Egyptian pharmaceutical industry from its early start in a free enterprise environment and through the 1950s when government control gradually became total. Section 1 of Chapter III describes the changing pattern of supply of drugs by multinational firms in various markets. This is followed in Section 2 by a detailed analysis of the operation of multinational firms in Egypt, with special emphasis on their comparative gain from particular forms of investment. Section 3 of Chapter III identifies the costs and benefits derived by the Egyptian economy from the operation of multinational pharmaceutical firms, with a quantitative judgement of figures obtained for the two major kinds of foreign operations in Egypt: subsidiaries and license agreements. Chapter IV gives an assessment of the performance of the nationalised domestic sector of the Egyptian pharmaceutical industry over the period 1960 to 1970/71, using indices for production, value added and profits as basic indicators. The price structure for drugs is also examined for its influence on the profitability of domestic firms and on the production indices for the industry. In Section 3 of Chapter IV the policy of GOPCA, the centralised government body in control of the Egyptian market for drugs, is assessed for its influence on the present and future growth of the industry. Section 4 of Chapter IV is devoted to a close study of the problems which the industry has experienced with backward integration, as portrayed in the operation of the primary producing pharmaceutical chemicals plant, El Nasr. Chapter V summarises the results of this study.