Iran’s pharmaceutical industry diagnosed with fatal US sanctions
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To address the issue of the paucity of medicines in the market, Bandpei said, officials from the Health Ministry, insurance organizations, Planning and Budget Organization, security institutions, Central Bank, and producers themselves, recently held a comprehensive meeting. The meeting aimed to find a solution to the scarcity of essential drugs in the market and devise a strategy to tackle the debilitating impact of the sanctions on the country’s pharmaceutical industry.
High cost of raw materials
Bandpei pointed to mandatory drug pricing, saying such method can only be enforced when the price of medicine being manufactured is reasonably close to the actual market price. If the authorities aim to regulate the market through mandated pricing, then it is imperative that such pricing aligns with the realities on the ground.
The lawmaker shed light on one of the reasons cited by producers for the decline in production, namely, the high cost of raw materials. Once the subsidized foreign currency allocated to them runs out, the producers are forced to import raw materials at the prevailing rates of the unofficial market, thereby increasing the finished product price. According to Bandpei, the solution to this predicament entails the government’s allocation of preferential forex and greater subsidies for the import of raw materials by producers.
‘Darou-Yar’ (Medicine Aid) Scheme
Furthermore, to ensure that the final consumer receives the drug at a reasonable price, the distribution of drugs to consumers should be managed through the “Darou-Yar” (Medicine Aid) scheme. Under this initiative, the difference between the actual cost and the subsidized price is covered by insurance organizations, and the end consumer only pays the subsidized price. The Darou-Yar plan, which was established based on the budget law of the last Iranian calendar year and implemented through a presidential decree, directly subsidizes the final consumer of the drug.
Bandpei expounded that medicine, as an essential commodity for all eras and generations, should be approached by considering both the producer’s needs and the consumer’s capacity to afford pharmaceutical expenses. He emphasized that to secure the producer’s interests while safeguarding the public from incurring further harm, the government should allocate the difference between the subsidized forex rates and free-market rates to insurance organizations, and monitor the process.
Self-sufficiency in drug production
Regarding the country’s self-sufficiency in drug production, the MP stated that the fluctuations in the pharmaceutical market make it difficult to determine the extent of self-sufficiency and the need for imports. The harsh conditions of the US embargo have caused many producers to halt production, making it challenging to ascertain the ratio of domestically produced drugs to imported ones.
Previously, it was estimated that 97% of the country’s pharmaceutical needs were domestically produced and only 3% were imported. However, the current situation has led to a scarcity of several essential drugs, such as cold medicine, which has been produced domestically for six decades. This highlights the urgent need for the Iranian government to take measures to address the issues facing the pharmaceutical industry and ensure that the healthcare needs of its citizens are met.