Iran is home to more than 100 pharmaceutical firms, most of which produce generics or biosimilar drugs, while a large number of knowledge-based companies have also been established in recent years.
In fact, Iran’s pharmaceutical industry has turned out to be one of the most lucrative sectors to foreign investors since western economic sanctions against the country were lifted in January.
Danish company Novo Nordisk, the world’s largest diabetes drug-maker, was the first to gain a toehold in Iran’s market. It will soon start the construction of a $78 million manufacturing plant in the country.
One of Europe’s largest manufacturers of generics, Chemo Company, signed an agreement with Barakat Pharmed Company in March to invest in one of the subsidiaries of the Iranian pharmaceutical holding. Despite this, experts think Iran is yet to find the status it deserves in the global pharmaceutical market.
In the following report recently published in the Persian daily Donya-e-Eqtesad, Amir Hashemi Meshkini and Mina Dehqani, both holders of PhD in pharmaceutical sciences, survey the current state of the country’s pharmaceutical exports.
Export Opportunities
The production capacity of some Iranian drugs exceeds the domestic requirement. This has at times led to an unhealthy competition among Iranian drug-makers.
On the other hand, production of generics and biosimilars gives an added advantage to exports; low and lower middle income countries are more willing to import generics, rather than European or American brand-name drugs.
With the ever-rising cost of medications and economic crises, even some European countries are becoming good markets for generics.
Another opportunity for exports would be selling pharmaceuticals to international institutions such as the United Nations Children’s Fund. UNICEF provides medicines and healthcare to children and mothers in developing countries.
As one of the members of the United Nations Development Group, it procures medicine from countries that possess vaccine and drug-making technologies and offers them to less-privileged countries. It usually focuses on buying cheap yet quality generics for diseases such as tuberculosis, malaria and AIDS.
Figures show that generics manufacturers of the region have directed efforts toward this market. For instance, India sold up to $670 million of medicines to UNICEF in 2013, equal to one-fifth of Iran’s total pharmaceutical market.
Why Not as Successful as We Should Be
That Iran’s export markets are restricted to Iraq and Afghanistan where Iranian drug firms can feel the tightening competition.
And the fact that not a single Iranian generic product has found its way into European and American markets while the likes of India are thriving there indicates that Iran is not faring well in this sector.
Flawed approaches adopted by some players of the field are not few and far between. Some believe the only way to reach a positive trade balance in this sector is to place a ban on imports.
But enforcement of such a policy would reduce the already insignificant figures of the country’s medicinal foreign trade.
At present, Iran constitutes as little as 2% of the total global pharmaceutical transactions.
Hurdles to Exports
Despite the fact that political impediments erect high hurdles in the way of medicine exports, they are not the only factors.
Iranian companies have failed to secure Good Manufacturing Practice quality standards needed to register drugs in destination countries or to sell them to organizations such as UNICEF.
Another impediment to exports of medicines is the higher end-price of drug production in Iran compared to other countries. The point that the government requires producers to purchase domestic raw materials at a cost higher than their imported counterparts has resulted in raising the end prices and consequently knocked Iranian products out of the international market.
