Boston, MA -- (ReleaseWire) -- 04/11/2014 -- BMI continues to adjust its forecasts for Iran's pharmaceutical market to account for the sanction-induced currency crisis and high rates of inflation. The rapid depreciation of the rial means that we expect the value of the market in US dollar terms to contract sharply. On a positive note, improved international relations have reduced the political risk associated with operating in the market for multinational drugmakers.
Headline Expenditure Projections
- Pharmaceuticals: IRR69,997bn (US$5.26bn) in 2013 to IRR72,591bn (US$2.42mn) in 2014; +3.7% in local currency terms and -54.0% in US dollar terms.
- Healthcare: IRR559,532bn (US$27.29bn) in 2013 to IRR694,961bn (US$28.14bn) in 2014; +24.2% in local currency terms and +3.1% in US dollar terms.
Risk/Reward Rating: Iran's business environment received a substantially higher appraisal in Q214, with a score of 41.1 out of 100. The country rose seven places in the regional rankings to 15th out of 30 countries in the Middle East and Africa region in Q214 compared with 22nd in the previous quarter. The reappraisal puts the country back to the mid-table position that it held during 2013. Its overall score of 41.1 is broadly on a par with the regional average of 42.3. Generally speaking, Iran benefits from a large and growing population and relatively widespread access to healthcare services. However, its regulatory regime - including intellectual property (IP) rights, political and economic situation - is highly questionable. Consequently, the country performs above the regional average for potential rewards and below the regional average in terms of risk.
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Key Trends And Developments
- In December 2013 the Tehran Times reported that several multinational drugmakers were considering investments in Iran following a thaw in relations over the country's nuclear program. German pharmaceutical major Merck is considering partnering an Iranian drugmaker to manufacture drugs in the country. French drugmaker Sanofi, and German technology and service giant Bosch are also assessing whether to tap into pharmaceutical production opportunities in Iran according to the report.
- Drugs imports in Iran increased by 40% month-on-month (m-o-m) to 1,540 tonnes, valued at US$119mn, in the eighth Iranian calendar month ended November 22. The country has allocated US$400mn for the drug imports, according to Nasser Riahi, chairman of the Syndicate of Iranian Pharmaceutical Importers. Around 97% of Iran's required drugs are currently produced domestically, of which 50% of the raw materials are imported, Iranian Health Ministry official Hossein Ayati said.
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