SisiCare: The Healthcare Crisis in Egypt

Recently in the United States, healthcare has garnered the public’s attention as a contentious issue with President Trump’s eponymous policy, Trumpcare. Access to good healthcare, of course, concerns other countries around the world. In particular, Egypt has struggled with a lack of universal coverage and medicinal shortages. Pharmacists, who sympathize with the suffering of their ailing neighbors, cannot provide relief to those in need of certain drugs. Some have turned to the black market for medications, but those supplies are often too expensive and, as pharmacies have experienced, can also be limited in number.

What is the cause of Egypt’s healthcare crisis? President Sisi’s economic reform plans of November 2016 play a direct role, in addition to poor government aid in healthcare and the continuing prevalence of Egypt’s informal economic sector.

In order to work toward attaining a $12 billion loan from the International Monetary Fund, Sisi’s administration had to float the Egyptian pound last November, a move which sunk the currency’s value compared to the U.S. dollar. This action, in turn, brought about drastic inflation in numerous sectors of the Egyptian economy. The annual inflation rate rose from 13.6% in October to 19.4% in November after the reform.

One result of this inflation of the Egyptian pound is high import costs for pharmaceutical companies. These costs are so high, in fact, that many in the industry have stopped importing drugs and ingredients altogether, as they are unable to turn a profit while remaining within the Health Ministry’s firm price caps on drugs sold to consumers.

The current issue of drug shortages and inflation does not fully encapsulate the difficulties that Egyptians face with their healthcare system. Most of the healthcare that Egyptians receive is not paid for by the government; rather, citizens are often left to foot the bill with out-of-pocket payments. Egypt’s lack of government support is one of the most severe cases of nonuniversal healthcare compared to the other Arab countries.

Due to this responsibility that Egyptians must take on, researchers have found that many people in Egypt endure what they call “catastrophic health payments.” Direct civilian payments do not only account for most of the healthcare sector: these expenses also account for a noteworthy portion of civilians’ total spending. More than 20% of the population spends 10% of their total expenditure on healthcare, and around 7% of the population spends 40% of their expenditure, when food is not accounted for, on these health payments. Compared to other populations of similar income levels, Egyptians fare the worst.

To exacerbate the lack of government funding, a significant number of workers in Egypt make a living within the informal sector. Within this “shadow economy,” laborers lose the potential benefits of health insurance coverage. Although the informal economy has generally been declining in the past few decades, its mark on Egypt’s economy is still striking. Among other consequences of such a large percentage of GDP coming from the informal sector, the lack of access to government-financed healthcare persists. (Working Paper no. 6424) (Working Paper no. 6424)

Is all hope lost, then, for healthcare in Egypt? With regard to the recent medication shortages, these appear to exist only in the short term as a result of the shock of Sisi’s economic reforms. In fact, the inflation brought about by the government’s decision to float the currency seems to be coming down.

As the pound gains ground, the cost of imports will return to reasonable rates, hopefully to low enough levels to revive the pharmaceutical industry. Even though pharmacists may begin to restock their shelves and bring relief to their neighbors, the broader issues with Egypt’s healthcare system should not go unnoticed. Egypt is far from a universal healthcare system—even if this level of involvement is not Egypt’s end goal, the people need and deserve some improvements in government assistance. SisiCare, evidently more so than its American counterpart, has quite some refinements to be made.

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