بیزینس مانیتور-صنعت داروسازی و بهداشت درایران-سه ماهه دوم2011

In BMI’s Middle East and Africa Pharmaceutical Business Environment Ratings (BER) for Q211, Iran continued to slip down the rankings, as the absolute scores of other markets improved. The country now places 13th of the 19 markets surveyed in the Middle East and Africa (MEA) region. While some of its rewards are theoretically substantial, given its population of almost 75mn and widespread access to healthcare, the country remains a risky investment proposition, not least due to shortcomings within its intellectual property (IP) protection. Imports of medicines, however, will continue to grow as volume demand continues to develop, with more expensive treatments likely to have limited uptake within the more affluent sections of society and niche private healthcare facilities.

We calculate that per-capita spending on medicines in Iran reached US$32.4 in 2010, with the total market valued at IRR24,493bn (US$2.39bn), posting a local currency year-on-year (y-o-y) increase of 10.5%. However, inflation growth reached 14% in the same year, virtually negating the value increase in the market’s size. In the 2010-2015 period, we forecast a local currency compound annual growth rate (CAGR) of 15.32%, which is comparable to the 2005-2010 period, but also a product of high inflation (expected to top 25% for most of the forecast period). Local currency depreciation will have a further negative impact on the market’s attractiveness to foreign companies. We expect volume-based drivers to continue shaping the market, with negative pressures on prices continuing. Additionally, with purchasing power being lower compared with their regional peers, Iranian patients are likely to opt for generic medicines where possible.

In general terms, however, consumer awareness of the need to use pharmaceuticals more rationally and effectively must improve, with around 8% of annual hospital admissions thought to be a result of the misuse of medicines. In fact, according to statements made by Director of Pharmaceutical Affairs of Zanjan University of Medical Sciences in 2010, as many as 30% of patients treated for renal failure are suffering due to the incorrect or uncontrolled use of medicines, especially painkillers, which can have dramatic side-effects on the gastrointestinal system.

Additionally, the country's lacklustre growth prospects are weighing on the subdued outlook for the performance of the Iranian pharmaceutical market. We forecast the Iranian economy expanding by an average 2.0% y-o-y through FY2015/2016, weighed down in part by the effect of subsidy phase-outs and international sanctions over the country’s political stance. We see private consumption moderating over the medium term, as subsidy cuts reduce consumers' purchasing power. Given that most pharmaceuticals incur an out-of-pocket fee, this consumer weakness will hinder the development of over-the-counter (OTC) medicines market in particular.