GLIMMER OF HOPE FOR IRANIAN PHARMA SECTOR
Iran's underdeveloped drug sector could benefit from trade liberalisation, but despite the easing of US opposition to the country's WTO membership, politics look set to continue to play an integral part in the development of this potentially huge market.
The most important factors affecting Iran's trade relations concern the political issues surrounding its nuclear programme, which has led to the country's political isolation, although it retains some loyalty from Russia and China. However, hopes of market liberalisation have been raised, with the US agreeing to drop its objection to Iran's candidacy for WTO membership in March 2005. The US Secretary of State claimed that the move was to support the diplomatic efforts of the EU-3 nations: France, Germany and the UK; the EU has backed Iran's candidacy for WTO membership.
However, the election of a hard-line conservative government in 2004 has created greater uncertainty in the investment climate. At the same time, high oil prices and a gradual move towards greater foreign penetration of the Iranian market indicate potential for some growth in pharmaceutical imports.
In recent months, the country's authorities have drafted new quality checks on a number of imported products, including pharmaceuticals. Nevertheless, the move is interpreted as being symptomatic of the Iranian government's low-cost pharmaceutical sector policy, which has favoured unauthorised generics and low cost imports for many years. Officials recently claimed that prices of foreign drugs fell by 70% in 2004 as a result of new legislation to encourage competition in the sector.
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21Oct