Pharmaceutical imports are on the rise in Iran despite increased production by the domestic drug industry, according to a senior official. Annual medicine imports currently stand at US$650mn with the government spending an average of IRR2.5trn (US$275.22mn) on drug subsidies.
Industry sources estimate that without local manufacturing, the country would have to import up to US$3bn worth of drugs per year. They are also confident that the domestic sector could eventually account for 90% of the country's drug needs and eventually export to regional and European markets.
However, greater foreign investment will be needed in R&D in order to produce products to international standards. Iran's isolation from global scientific developments has left the sector with low technological capabilities.
The government will also have to crack down on smuggled and counterfeit medicines, which currently account for twice Iran's domestic output. Poor patent protection and a failure to enforce intellectual property rights have discouraged multinationals from expanding in the country. However, increased economic liberalisation and adherence to WTO-TRIPS regulations could potentially endanger Iran's unauthorised generics makers, which are a key source of low-cost medicines in the country.