After the historic deal made between Iran and P5+1, the optimism for investment in Iran’s market has risen by foreign investors. There are a variety of investment fields with high potential and amongst, pharmaceutical market is no exception. Iran’s pharmaceutical market holds significant potential for innovative drug makers, particularly with the easing of sanctions.
With the population of 77.7 million, Iran is considered one of the most populous countries in the Middle East. According to the World Health Organization (WHO), Iran ranks 58 in health care section as of 2013. The life expectancy in Iran is 73 years and healthcare spending is calculated to $346 per capita. Total expenditure on health in Iran is increasing, while the public sector’s share is decreasing. Currently, 25% of Iran’s total health expenditure, on average, goes on medicine. Private sector expenditure as out-of-pocket payment is remarkably high as it accounts for more than 50% of the whole expenditure. Iran’s expenditure on pharmaceuticals is expected to reach $4.14 billion by 2019 with a compound annual growth rate (CAGR) of 11%, taking inflation into account, according to IMS Health Institute.
Iran produces 90% of its medicines and the Ministry of Health has an ambitious goal of self-sufficiency within few years. Local production is mainly focused on generic drugs, which are produced by more than 70 Iranian drug makers.Regarding sales, top pharmaceutical companies in Iran include: Tamin Pharmaceutical Investment Company (Social Security Organization), Sobhan Pharma Group, and Shafadarou Corporation (Melli Bank Investment Corporation) which are the most important public owners of the pharmaceutical industry.
Medicine price is controlled by the food and drug organization through pricing commission regulations in a cost plus basis through comparison with selected companies according to published regulations.
Importing medicine is manipulated with 93 private companies in Iran, and 30 designated emergency medicine centers besides national medicine and medical equipment corporations. There is Red Crescent (Ministry of Health), Darou pakhsh trade development (Tamin Investment Corporation), and KBC (Sobhan Pharmaceutical Group), which are all public.
To conclude, based on the statistics previously mentioned, Iran’s pharmaceutical market has drastically grown during recent decades and it is predicted to maintain its growth for years to come.
It is also believed that forming close relationships and cooperative committees with the international pioneers of this industry alongside entering a new era of post-sanctions, can help satisfying the needs and develop a unique investment opportunity for investors in this field.