Focus: Health

A Booming Industry

A Booming Industry

May. 14, 2013

Three fundamental pillars support Iran's highly centralized healthcare sector: public and governmental entities, private providers, and NGOs. Expenditures for the healthcare sector were pegged at $31.7 billion in 2012, and that figure is estimated to reach $50 billion by end-2013. The government has consistently invested approximately 5% of GDP in the sector annually since the Ahmadinejad administration came to power in 2003.


With over 830 medical institutions and more than 110,000 beds, the local medical network is prepared to accommodate Iran's growing population, 85% of which has access to health insurance and demands modern and effective treatments. Furthermore, Iran's interest in nanotechnology and biotechnology has prompted the establishment of a variety of specialized care facilities, including institutions focused on optometry and organ transplants.


Famous for heart surgery, orthopedics, nephrology, kidney transplants, urology, general surgery, cardiology, and laparoscopic surgery, Moheb Hospital boasts a highly trained staff with international experience. “Moheb Hospital is the first public-private partnership [PPP] in Iran. It was a successful experiment considering that we opened two more affiliated hospitals in September 2012, one of them especially for women," explained Ali Akbar Yazdani, CEO of Moheb Hospital, to TBY.

In recent years, the hospital has attracted FDI and partnerships with NGOs to increase its competitiveness and boost the number of patients arriving from abroad. As one of the top three hospitals in the country, Moheb sees 1,600 patients per month and performs approximately 800 operations monthly.

Since its establishment in 1993, Noor Eye Hospital has focused on lowering costs, implementing state-of-the-art technology, and delivering services of the highest quality. The hospital's work attracts thousands of patients per month, many from the surrounding region. Noting an opportunity in health tourism, the hospital's Founder, Hassan Hashemi, explained to TBY, “health tourism requires infrastructure, including transportation, facilities, and hotels. This segment holds big potential, but the sector currently remains underinvested." With more investments flowing into Iran's healthcare sector, growth in the specialized care segment, specifically in terms of health tourism, is on the horizon.


There are more than 6,200 generic branded registered pharmaceuticals products in use in Iran, 85% of which are produced locally. The remaining medicines are purchased by 75 importers, and products are distributed through 9,000 points nationwide. Investments in biotechnology and nanotechnology characterize the industry, with local manufacturers focused on offering high-tech products to the domestic market as well as developing countries abroad. Exir Pharmaceutical Company has pioneered the industry's involvement with emerging markets by forming partnerships with multinationals and mid-sized companies abroad. “We plan that within a couple of years, 30% of our sales will come from foreign markets. We are also planning to establish regional offices in these emerging markets," the Managing Director of Exir Pharmaceutical Company, told TBY. The company is focused on expanding operations to Southeast Asia, South America, the CIS region, and Africa. The company currently employs close to 600 people and expects its annual turnover of $130 million to expand by 20% in 2013.

Shafa Darou Investment Co. and its nine subsidiaries are also following the export trend, with agents in prime markets such as Turkey, the CIS, Iraq, Afghanistan, Jordan, Syria, and Africa. Although the company's focus is on meeting domestic demand for products such as penicillin, antibiotics, and aspirin, maintaining its $800 million of turnover each year, and holding onto a 25% market share, the company is rapidly expanding abroad.

Paying close attention to distribution channels, Hejrat uses the most advanced technology to establish direct links with suppliers and customers. As part of its most recent project, the company is seeking to set up an online network to accelerate the distribution process. Hejrat's warehouse has been recognized as one of the most state-of-the art pharmaceutical facilities in the Middle East, complete with IT infrastructure.

Since approximately half of the raw materials used in the local pharmaceuticals industry are imported from abroad, the recent restrictions imposed on the country's economy have begun to affect supply levels. This may lead Iranian manufacturers to seek alternative resources and devise more creative solutions to meet demand. Medicine importers are facing increased prices and supply shortages, even for companies with the appropriate international licensing. In response to this challenge, local companies have begun to produce critical medicines that were previously imported to the country, such as anti-cancer drug Paciltaxel, which has been manufactured in Rasht since March 2012. The Iranian Republic News Agency (IRNA) reported that Rasht is the first location in the Middle East to manufacture this product, which is a mitotic inhibitor used for chemotherapy. Local production of Paciltaxel is expected to save Iran more than $11.5 million per year.

In August 2012, the government announced the successful completion of an indigenous centrifuge to be used in the pharmaceuticals industry, designed for the production of biotechnological medicine. As Iran has long depended on outdated foreign equipment, the achievement demonstrates Iran's ability to develop its healthcare sector independently.