With a high portion of the Iranian population being young, some might see the future of the country’s healthcare industry at risk, with an imminent and drastic increase in demand for healthcare services. However, the country has managed with great success to build one of the region’s strongest healthcare sectors. With a market value estimated to reach USD97 billion in 2017, the industry has been able to remain remarkably resilient in the face of sanctions. Though the country has fared well, the country’s youth will soon be marrying and starting families, putting strain on the sector and requiring new investments, both local and foreign.
According to the Economist Intelligence Unit, healthcare spending in the Islamic Republic reached 6% of GDP in 2017, though this has fallen from a recent high of 7% in 2010. Close to 90% of citizens are covered by some form of health insurance. Though Iran is one of the most populous countries in the world, much of its population lives in rural or under-serviced areas, and the healthcare industry in the country is highly centralized.
The country’s advanced healthcare industry has also allowed it to become a hub for research. Among other fields, the country has become a leader in stem cell research. TBY met with the managing director of Cell Tech Pharmed Company, Nasser Aghdami.
Cell Tech is a pioneer in the field of stem cell research not only in Iran but throughout the world. While the company has developed technologies and is looking to enter markets as far as South Korea, foreign investors remain reluctant, despite lucrative standing. With some countries yet to approve technologies, some investors have remained undecided. And within Iran, there lie bureaucratic hurdles. “The stem cell business certainly is interesting for investors. Yet, investors are waiting to see what happens in Iran regarding medical regulations first,” Aghdami said. “They want to be sure that our Ministry of Health accepts this technology before they invest in it. There is always a time lag for new medicines and procedures to be approved.”
Another leading researcher in the country is the public non-profit Royan Institute, which focuses on applications in clinics and patient treatments. The institute specializes in research in fields as advanced as 3D bioprinting. In an exclusive interview with TBY, Dr. Hamid Gourabi, the President of Royan Institute, also discussed the prospects of foreign investment in the sector. “In comparison with other countries in Europe and North America, we can do this kind of research at a lower cost,” he explained. “This could be interesting for foreign investors. Iran has good human resources and excellent scientists who have lots of ideas for doing research. This creates a base for investment opportunities in, for example, stem therapies and regenerative medicines, such as our 3D bioprinter.”
While sanctions did not directly target the healthcare sector, the country’s pharmaceutical industry has become remarkably self sufficient. Iran produces approximately 96% of its medicine within its boarders. According to the Ilia Corporation, a consultancy firm focusing on Iran, the Islamic Republic’s pharmaceutical market was estimated to be with some USD2.35 billion in 2014, and is expected to increase nearly a billion to USD3.31 billion by 2019. The country has over 50 pharmaceutical companies, with approximately 36 being publicly listed. These listed companies are responsible for over 90% of the country’s products, while imports come in through 123 registered importers.
Though only 4% of pharmaceutical products are imported, these products claim a disproportionate share of value, with 45% of the market. Iran claims the highest consumption of pharmaceuticals in Asia and ranks 20th worldwide, with per capita consumption at 340 units per annum. The country saw approximately USD806 million in medical devices imported in 2014, with just USD23.6 million being exported. A further USD400-500 million in medical devices was produced locally, the bulk of which was destined for laboratory and dentistry use. Among the country’s top export destinations for pharmaceuticals are Afghanistan, which received 33% of exports; Russia, which claimed 18%; and Germany, with 16%.
Iran’s pharmaceutical market remains a lucrative one for investors. Between 2009 and 2014, the country’s market saw an increase of 30% in sales, considerably higher in the averages of both the Middle East and CIS.