Despite the enforcement of an import ban and restrictions, the domestic production of pharmaceutical raw materials has yet to reach a desirable level, a report by Majlis Research Center, the research arm of the Iranian Parliament reads.
The following are some of the notable findings of the report:
Local production accounts for 13.8% or 198 ingredients on the Iranian Drug List.
Contrary to the claim made by the Pharmaceutical Raw Material Producers Syndicate on local producers meeting 71% of market demand, they accounted for only 25.1% of the country’s pharmaceutical raw materials in terms of volume and 23.1% in terms of value in the fiscal 2019-20.
The active pharmaceutical ingredient’s production in Iran has shifted toward the production of lucrative, moneymaking APIs instead of supplying essential, lifesaving drugs. As a result, 55% of APIs formulated in the country are categorized as nonessential and the country relies on imports to meet the demand for essential drugs.
Total outflow of foreign currency by pharmaceutical industry reduced by 26.2% in the fiscal 2019-20, chiefly thanks to the confiscation of narcotic drugs; APIs extracted from narcotics prevented the outflow of foreign currency reserves by up to 17.4%.
In recent years, the allocation of free or very cheap confiscated opium to the pharmaceutical industry has improved the country’s foreign currency reserves. Low Volume High Value drugs accounted for 6.5% of the decline in the outflow of foreign currency reserves, thanks to their high added value. APIs of conventional drugs (non-narcotic, non-LVHV drugs) account for the lion’s share of ingredients and market; decrease or increase in their foreign currency spending would give a clear overview of the state of foreign currency spending on APIs produced domestically: the decline in foreign currency spending of APIs of conventional drugs was as little as 2.6% in the fiscal 2019-20.
Between the fiscal 2019-20 and 2020-21, the price of APIs produced domestically was more than double their imported counterparts, i.e. between 197% and 271%.
Despite the allocation of subsidized foreign currency to pharmaceutical industry and legislative mandate on the pricing of commodities that receive government subsidies, pharmaceutical products have yet to undergo a pricing review. As a result, the increase in the prices of pharmaceutical raw materials has led to a rise in the prices of medicines and people’s out-of-pocket expenses.
The prices of domestically-produced pharmaceutical raw materials climbed by 300-800% during the years under review, much higher than the average inflation rate of other industries.
Human and natural resources such as mines, oil, gas and petrochemicals in the country allow the manufacture of pharmaceutical products to be preceded by complex development phases. However, more than 72% of domestically-produced APIs undergo only one phase and 18% undergo two phases of development. The fewer number of development phases not only cripples efforts for saving foreign currency resources, it also increases the country’s dependency on foreign countries for procuring pharmaceutical raw materials in times of crises.
The promotion of transparency via circulation of information and data of pharmaceutical raw materials industry on the platform of TTAC, the electronic system for Tracing, Tracking and Authentication Control of food and medicine developed by Iran’s Food and Drug Administration, is recommended.
MRC has also called on regulatory organizations to take legal action against producers of pharmaceutical raw materials that have managed to either import raw materials without securing permits or enjoy a monopoly over import, as well as companies engaged in using imported finished drug and repackaging it as a new product.
Cooperatives Ministry’s Report
A recent report by the Ministry of Cooperatives, Labor and Social Welfare regards high levels of out-of-pocket financing for health as a major problem in Iran’s healthcare system.
Iran performs worst when it comes to healthcare access and quality index compared with other health indexes. Iranians paid for 35% of total health expenditure directly through out-of-pocket expenses compared to 18% of the global average in the fiscal 2018-19, according to data by the World Bank.
The country ranked 116th among 187 countries in out-of-pocket expenses index in that year. Tehran and Kerman registered the highest and lowest levels of out-of-pocket expenditures respectively.
Out-of-pocket expenditure is any direct outlay by households, including gratuities and in-kind payments, to health practitioners and suppliers of pharmaceuticals, medical appliances and other goods and services whose primary intent is to contribute to the restoration or enhancement of the health status of individuals or population groups. It is a part of private health expenditure.
According to the latest data, 30% of Iranian population spend 10% of their income when it comes to out-of-pocket household expenditure associated with essential surgery. Iran ranks 93rd out of 132 countries in terms of appalling expenditure for surgical care. Up to 2.5 million people fell below the poverty line due to such expenditure in fiscal 2019-20.
The number of Iran’s physicians, health workers and hospital beds per capita is not only fewer than the average of upper middle-income economies (the income group in which the country has been incorporated); it is also fewer than the global average that factors in very poor countries.
In the Iranian year ending March 2020, there were 1.6 physicians per 1,000 people; 33 health workers (nurses, operating room staff, technicians, etc.) per 10,000 people and more than one hospital bed per 1,000 people in most Iranian provinces.
Iran has been registering growth in all health indicators to stand above the global average over the past years. However, that’s not indicative of a desirable performance, because firstly the country is placed among countries with upper middle income, according to the World Bank.
Therefore, its health indicators must match these countries’ and secondly the poor performance of low income countries has pushed down the global average. Infant mortality rate and under-five mortality rate in Iran stand at 9 and 14 per 1,000 live births respectively; both above the average of upper middle-income countries (7 and 13, respectively).
The number of reported pregnancy-related deaths stands at 16 per 100,000 live births in Iran, i.e., better than the average upper middle-income countries (57 per 100,000 live births).
The rates of low birth weight (babies who are born weighing less 2,500 grams), stunting in under five-year-old children, access to safe drinking water and access to a basic sanitation service are four indexes surveyed among risk factors. Except for access to safe drinking water, other indicators have been viewed as concerning in Iran.
The percentage of low birth weight has been constantly on the rise (except for the Iranian year ending March 2019). Prevalence of stunting among under five-year-old children is 2.6%, that is higher than the average of upper middle-income countries (2.4%). Prevalence of stunting in Kohgilouyeh-Boyerahmad Province and Sistan-Baluchestan Province stands at 15.78% and 13.29% respectively, which is even higher than the global average (12.6%).
The decline in Iranians per capita daily caloric intake, particularly in years ending March 2019 and March 2020, and the increase in child malnutrition will have deleterious effects on the intellectual development of children in the future.
Immunization (vaccination) coverage in children less than one year of age in Iran is way above the global average (99% in the year ending March 2021).
Latest data released by the Statistical Center of Iran show the average goods and services Consumer Price Index of “Health and Treatment” in the 12-month period ending Aug. 22, which marks the end of the fifth Iranian month of fiscal 2021-22, increased by 38.5% compared with the similar month of last year.
The CPI of the group stood at 278.9 for the month to Aug. 22, indicating a 3.6% increase compared with the month before.
The index, with a coefficient of 7.14%, registered an increase of 43.7% compared with the similar month of last year.
