Pharmaceutical Industries

According to the definition of the World Health Organization, a drug is any substance that is used in pharmaceutical processes and causes the discovery or modification of physiological processes or disease states in order to improve the consumer. By this definition, pharmaceutical products are a form of medicine that contains one or more other drugs with other ingredients added to their production.

Pharmaceutical products are one of the most strategic products of a country and developments in this field can have a great impact on the strategic parameters of a country. It should be noted that according to the classification made by the University of Oxford by Sanjaya Lal  (Source: Sanjaya Lall (2000)) in 2000, drugs and medical equipment are classified in the group of high-tech industries.

Iran Pharmaceutical Industry, Requirements, Regulations, Market

The tariff code related to pharmaceutical products is 30. In 1399, in general, Iran exported 96 million dollars’ worth of drugs and raw materials Source: During this year, according to the customs statistics of the Islamic Republic of Iran, the total of Iran's exports to Switzerland in the same year was equivalent to 4611003 dollars. Also, according to statistics published from the trade map site in 2019, there were over 2589 thousand dollars of drug exports to Switzerland, using the tariff codes 3004 and 3002.

According to the Chairman of the Board of Manufacturers and Exporters of Biological Products, the decrease in exports of pharmaceutical products from Iran in recent years has been related to various factors, some of which are: 1- Central Bank order to return export currency within 4 months; A drug on the part of the Food and Drug Administration has been the lack of foreign exchange for the import of pharmaceutical raw materials and as a result the reduction of exports of those products.

One of the requirements of pharmaceutical companies for export is to obtain an export license by that company in the first stage. In order to do this, first, after submitting a written request to the applicant and submitting the required documents, the applicant's application is reviewed by the Article 20 Legal Commission, and if qualified, the company receives an export license from the Food and Drug Administration.

Also, according to the circular 5188/9/6/11 dated 13/02/96, the export and export of all manufactured drugs and the production of other pharmaceutical materials for obtaining a license from the General Directorate of Medical Drugs or re-control of medical goods without a license is mentioned.

Challenges of the pharmaceutical industry in Iran

  • One of the most important challenges of this industry in Iran is the pricing.
  • One of the vulnerabilities of this industry is its high dependence on raw materials and this issue has led to this industry is not strong against exchange rate fluctuations.

Because medicine is an advanced, high-tech industry, one of the challenges is the obsolescence of technology.

  • Another important issue in this area is the board of trustees and the impact of their activities on the private sector drug and medical equipment industry.
  • Drug trafficking in all its dimensions is one of the major challenges in this area (Source: Report of the Chamber of Commerce of Industries, Mines and Agriculture, an overview of the pharmaceutical industry and medical equipment,1395).

Pharmaceutical products market in Switzerland

As shown in the figure below, Switzerland imports pharmaceutical products from Germany, the United States, Italy, Spain, Ireland, Australia, Singapore, etc., respectively. In general, this country imports 31562239 thousand dollars of medicine annually from all over the world. Considering the share of Iran's exports to this country, in fact, only 0.008% of the total imports of this country are from Iran. It should be noted that Switzerland has good achievements in the field of medicine in its country. And two of the largest pharmaceutical companies, Novartis and Roche, were born in this country.

It should also be noted that in a report published in 2017 by the Tehran Chamber of Commerce, Industries, Mines and Agriculture, a list of goods with export history and advantage of Iran has been published, which has not been exported to this country until that year. In the meantime, you can see some pharmaceutical products Source: Swiss report; Trade, foreign investment and industrial production.

Table 9_ Goods with export history and advantage of Iran that have not been exported to Switzerland (among the 50 major swiss imported goods in 2016)

Table of goods with export history and advantage in Iran that have not been exported to Switzerland.

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