Iran’s Pharmaceutical Sector Faces Currency and Supply Hurdles

On Wednesday, February 28th, the head of the Tehran Chamber of Commerce voiced concerns regarding foreign exchange challenges, emphasizing the precarious state of the country’s pharmaceutical industry. He warned that if these issues persist, a shortage of essential drugs could be imminent.

Speaking to the ILNA news agency, Mohammad Najafi Arab highlighted issues with the allocation and timely distribution of currency for medicine procurement. He lamented the government’s and social security’s failure to meet their obligations in settling payments to the private sector.

According to Arab, these shortcomings have led to difficulties for private enterprises operating in the healthcare sector, particularly in retrieving their working capital.

Earlier, on January 29th, the chairman of the Iranian Human Medicine Industry Owners Syndicate, in a meeting focusing on liquidity in the drug supply chain, underscored the severity of the challenges facing the industry. Mohammad Abdezadeh cited problems with currency exchange reimbursements, payment irregularities within insurance organizations, supply chain logistics, Central Bank directives, and regulatory issues within the Food and Drug Organization.

Hadi Ahmadi, the Public Relations Director of the Tehran Pharmacists Association, highlighted the significant outstanding dues owed by insurance organizations to pharmacies, amounting to 6.5 trillion tomans monthly. He revealed that for approximately four months, pharmacies have not received payments from insurance companies, resulting in a total claim of 26 trillion tomans.

Despite these mounting challenges, Mohammad Mokhbar, the first vice president of the regime, asserted on December 20th that the government is committed to resolving healthcare issues, particularly regarding medicine supply. He claimed a 30% increase in currency allocation for medicine compared to the previous year.

The head of the Iranian Pharmacists Association disclosed on January 27th that the Ministry of Health initially requested 105 trillion tomans for the pharmaceutical plan implementation in the 2023 budget law. However, parliamentary revisions reduced this allocation to 69 trillion tomans, leaving only 30% of the required funds available thus far in the fiscal year.

The currency shortages affecting medicine supply are exacerbated by the regime’s unrestricted financing of supported militias, despite consistently blaming sanctions for delays in currency and medicine supply.

In light of these challenges, public awareness and concern regarding the prioritization of militia financing over healthcare have escalated in recent years.