Iranian Drug Market Growth to Remain Sluggish

Iran's drug market is characterised by low pricing levels, a result of government policy to provide universal access to cheap healthcare, involving the use of strict price controls. As a result of this policy, generics dominate the market, accounting for 35% of the total pharmaceutical market in value terms and twice as much in volume terms. This low-cost status has made Iran a cheap source of drugs, hence export activity has been an area of notable development. The main export destinations are other Middle Eastern countries, former Soviet states and Africa.

Prescription drugs account for the vast majority of sales, with hospitals as the main point of access to healthcare. However, the distinction between prescription and OTC medicines is blurred, so differentiating between sectors is problematic. A significant amount of prescription drugs are available without a prescription. The most frequently consumed medicines are antibiotics, analgesics and antidepressants. The high level of consumption of antibiotics and analgesics, both basic drugs, reflects the developing nature of the market. Major suppliers to the Iranian market include Germany, the UK, Italy, France and Japan.

Although Iran is by no means the smallest market in the Middle East region, given the size of its population, it is one of the least developed, with per capita spending at just US$10. Spending levels have risen steadily in recent years despite government attempts to control expenditure. Around US$1bn has been set aside for the purchase of pharmaceuticals and medical products in each of the government's five-year plans. However, faced with restrictive government policy and limited international access to the country, Iran's significant untapped potential is unlikely to be realised in the near future.