Iran-Turkey Joint Venture for Pharma Exports to Europe

A major Iranian pharmaceutical company has signed a contract with a Turkish entity to produce medicine in the neighboring country.

Secretary-General of Iran-Turkey Commercial Council Jalal Ebrahimi made the announcement to Financial Tribune, without disclosing the name of the Iranian firm.

"The cooperation will be in the form of a joint venture. The Iranian side is investing some $100 million in the project. Yet, details on the contribution of the Turkish side have yet to be released. The aim is to pave the way for exporting Iranian products to European and the Mediterranean countries," he said.

Referring to Iran's competence in the production of biotechnical, nano and herbal medicines, the official, who is also an economic advisor with Maku Free Trade Zone (situated 22 kilometers from the Turkish border), said many Iranian companies are exporting their products to regional countries.

"We have established modern factories on par with the latest international standards," he said.

According to Ebrahimi, self-sufficiency and local production of different kinds of medicine are a priority for the Ministry of Health.

"Yet, if we want to efficiently make inroads into global markets, we need to cooperate with foreign countries," he said.

He stressed that Turkey is a very good option for this cooperation, as it has better commercial interactions with the European Union, is a member of World Trade Organization and a neighboring country, which means transportation costs are minimized.

According to the official, Turkish expertise in marketing and advertising across the world can help Iranian producers expand their presence in global markets.

"The Iranian company, which is investing in the construction of a pharmaceutical center in Turkey's Tekirdag Industrial Park, will procure all the required raw materials inside the country and the production process will be carried out in Turkey," he said.

According to Ebrahimi, Iran is one of the cheapest countries to produce goods in, due to its low-priced workforce, energy and water expenses.  

Iran’s Health Minister Seyyed Hassan Qazizadeh Hashemi has underscored the country’s huge progress in producing drugs and medical equipment, and its preparedness to export medicine to the Middle East’s lucrative market.

“At present, almost 95% of the medicine needed by Iranian patients as well as 50% of the raw materials are produced in the country and we import the rest. In the meantime, we have a big market (near Iran) to export medicine but we haven’t used this capacity correctly,” he said in a meeting with his Swedish counterpart, Gabriel Wikstrom, in Tehran back in December.

Sanctions have forced Iran to build a substantial, largely self-sufficient drug production infrastructure. Some 60 plants produce almost 40 billion drug units each year.

Research and development focuses mainly on new generic drugs, although investment in novel products is increasing: 12 new drugs for treating diseases, including cancer and diabetes, were launched in 2015, for example.

Iran’s biotechnology capabilities are also improving. The country is among the world's leading nations in stem-cell research and has a considerable infrastructure of related facilities, e.g. for plasmapheresis (blood plasma treatment).

The biggest biopharmaceutical company, CinnaGen, produces Biosimilars of leading immunology and cancer drugs, among others, and invests 20% of revenues in R&D.

In a nod to the global trend of establishing biotechnology hubs, Iran is also building a government-backed $2 billion "Industrial Pharmaceutical City" near Tehran. It will house incubators and startups under the same roof as research labs and biotech producers.

Foreign investors will be exempted from taxes and it is hoped that the venture will attract international experts.