THE RIGHT TONIC

Iran 2011 | HEALTH & EDUCATION | REVIEW: HEALTH

The widespread public health network, supervised by medical universities, is supplemented by top-quality private healthcare providers.


Ever since the Revolution, the Islamic Republic of Iran has sought to provide universal health care to all of its citizens, and improve the level of support present in rural areas of the country. Although health care was originally a state-only concern, rapid growth occurred in the private healthcare industry following the liberalization of the sector in the 1990s. Article 29 of the Constitution states that every citizen has the right to enjoy the highest attainable level of health, and the Ministry of Health and Medical Education is the public agency charged officially with formulating and implementing policies to attain this goal.

UNIQUE APPROACH

As its name aptly suggests, the Ministry combines the provision of health services with medical education, which creates a governance structure unique to Iran. In each of the 31 provinces there is one university of medical science, whose chancellor is also responsible for public health services. The university supervises the network of health institutions in that province. In rural areas, each village or group of villages contains a health house staffed by community health workers. There is one health house per 1,200 people. Health houses are supervised by rural health centers, which are run by a professional physician. There is one rural health center per 7,000 inhabitants. A similar structure has also been established in cities with health posts and urban health centers. The network of these primary institutions is administered by district health centers, which are directly responsible to the chancellor of the medical university resident in the provincial capital.

This widespread and well-knit network of public healthcare institutions has enabled Iran to post rapid progress in preventive health care. Immunization rates are at 99% and the infant mortality rate has decreased to 30 per 1,000 live births in 2006 from 54 in 1990. The primary healthcare system is praised by both the World Health Organization and UNICEF.

Through the same network of medical universities, the Ministry also provides medical education. Although some critique the combined structure of the Iranian healthcare system, stating that education and training are not upheld due to the workload of teaching hospitals, many others see this as the secret behind the success of the Iranian system as it provides prospective doctors with the opportunity to participate in objective-based learning.

The improved life expectancy in Iran, which increased from 63 to 71 years since the 1990s, is another indicator of the achievements of the system. The main causes of mortality include cardiovascular diseases, auto accidents, and cancer. Cardiovascular diseases cause 45% of deaths in Iran each year. Road accidents are a major cause of death, injury, impairment, and disability in Iran, especially for the young, and they account for almost 18% of all deaths. Some 14% of deaths are caused by cancer-related diseases, followed by neonatal and respiratory diseases, each accounting for nearly 6% of mortalities.

MORE THAN UNIVERSITY

In addition to the network administered by the Ministry of Health and Medical Education, the Social Security Organization (SSO) and private institutions also provide healthcare services. All those employed in the formal economy, except for government officials, are covered by the SSO network of hospitals and clinics. These hospitals and clinics do not charge policyholders for medical treatment. The SSO accounts for 11% of hospital beds across Iran.

The number of private healthcare institutions is increasing fast in Iran, in line with the rising per-capita levels of expenditure on health. Iranians who paid an average of $231 for health services in 1995, currently pay almost $800 on average, half of which is paid by the government and the other half out of their own pockets. Although the government aims to decrease the share of out-of-pocket payments to 30%, Iranians who are able are ready to pay more for their health care.

The private sector is mostly concentrated in urban areas. Out of 110,000 beds, the private sector is estimated to provide 15% of beds. Private hospitals are closely monitored by the Ministry and rated according to their performance, which is a source of information for those looking to find the best quality of care in Iran. Private hospitals mainly aim to attract well-known and established doctors, who in turn recommend patients be examined, treated or operated on at the hospital they are attached. Growth in the private sector has also closely followed the expansion of health insurance provision by private sector insurance companies. As the latter grow in confidence and size, there is likely to be a strong knock-on effect for the private healthcare industry.

Private hospitals are seeking international collaboration to improve their level of services and also pursue opportunities in catering to medical tourism, as Iran's medical expertise and quality of health care at economic prices in many areas gives it an advantage over other healthcare providers in the region. The government is also encouraging medical universities to purchase various support services from the private sector. Support services in Iran include 6,200 pharmacies, 1,100 radiology centers, and 1,700 laboratories. Analyst estimates say that total healthcare spending is expected to rise from $24.3 billion in 2008 to $50 billion by 2013, reflecting the increased demand for medical services.

The role of the private sector is further set to increase as development plans provide a framework for organized interaction between the public and private healthcare systems. As a result of the Fourth Five-Year Development Plan, the Ministry transferred management of more than 1,000 health facilities to private-sector ownership.

Another provider of healthcare services in Iran is not-for-profit foundations and charities, which cover the expenses of low-income individuals through the funds they collect. These include the Imam Khomeini Relief Organization and Committee Emdad.

PHARMACEUTICALS

One of the most important constituent parts of the health sector in Iran is the pharmaceuticals industry. As Iran was trying to secure the supply of pharmaceutical products to the country during the 1980s and 1990s through the production of generic products, competition to this sector came rather late. Yet, by 2008 there were almost 60 pharmaceutical plants with total annual revenues of $3 billion. The pharmaceutical sector is set to grow by 10% annually due to the increased attention of Iranians to health issues, a larger population, and the increasing frequency of respiratory diseases.

Currently, there are four large groups or holdings that dominate the pharmaceuticals market. The first one is the Darou Paksh, which is controlled by the SSO. One of Darou Paksh's subsidiaries, Exir Pharmaceuticals, has a reputation for innovation. The SSO also oversees Pars Darou, the second largest pharmaceutical manufacturer in Iran. Sobhan Darou, Jaber Ebne Hayyan, and Cosar Pharma follow these two groups very closely, and are looking to take a larger share of the market in the upcoming years.

Despite the growth opportunities in Iran, pharmaceutical manufacturers are looking abroad to export. Many manufacturers are also entering into licensed production agreements with overseas pharmaceutical groups to extend the list of products available on the Iranian market. Iranian law facilitates this by allowing foreign medical producers to enter into exclusive sales agreements with local pharmaceutical companies for the first two years, followed by the transfer of production know-how to a local counterpart thereafter for the licensed production of the patented medicine. In this manner, Iran is seeking to protect the IP rights of large international pharmaceutical companies, encourage their participation with local companies to improve know-how, and ensure that the Iranian population gets the best range of medicinal products available at an affordable price.

Iran is also very active in the generics industry, producing a wide variety of out-of-patent medicines. Generics producers are especially keen to explore export opportunities abroad, as cut-throat competition in the Iranian market has led to slimmer margins for manufacturers. As a regional heavyweight in generic pharmaceuticals production, Iranian medical products are likely to find receptive markets in the region, especially in countries with less-developed medical sectors such as in Central Asia, Afghanistan, and Iraq.