New Healthcare research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 02/14/2013 -- BMI View: We caution that our forecasts for the Iranian pharmaceutical market are at considerable risk due to runaway inflation and political risks. We also point out that the official exchange rate does not follow the trends in the black market, which further distorts market valuations. While our local currency forecast for the market's development is broadly in line with the previous quarter's figure, the value in US dollar terms will be considerably impacted by rising inflation, caused by the sanction induced currency crisis. At the same time, we expect that the volume of pharmaceutical sales in the country will continue to be negatively impacted by the prevailing economic and political conditions. These have already resulted in shortages of certain medicines, on account of the inability of local stakeholders to actually pay for them, given that Iranian banks have been blacklisted. Therefore, despite the country's demography-based long-term potential as a pharmaceutical market, its development clearly remains uncertain for the time being, and dependent on the eventual resolution of the crisis.
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Headline Expenditure Projections
- Pharmaceuticals: IRR52,127bn (US$1.04bn) in 2012 to IRR55,606bn (US$0.79bn) in 2013; +6.7% in local currency terms and -23.8% in US dollar terms. US dollar forecast lowered considerably from Q412 due to rampant inflation in Iran.
- Healthcare: IRR298,573 (US$28.04bn) in 2012 to IRR387,824 (US$29.61bn) in 2013; -10.4% in local currency terms and +5.1% in US dollar terms. Local currency forecast lowered considerably from Q412 due changes in macroeconomic conditions.
- Medical devices: IRR14,296bn (US$1.09bn) in 2012 to IRR11,862 (US$0.71); -17.0%% in local currency terms and -35.2% in US dollar terms. US dollar forecast lowered considerably from Q412 due to rampant inflation in Iran.
Risk/Reward Rating: In BMI's regional Pharmaceutical Risk/Reward Ratings (RRRs) for Q113, Iran's unchanged score of 45.5 out of the maximum 100 points ranks it 15th again out of the 30 countries surveyed in the Middle East and Africa (MEA). Despite the longer-term potential provided by its large and youthful population, Iran will continue to be a challenging market from the operational point of view, as illustrated by its low industry risk score, which is one of the lowest in the table.
Key Trends And Developments
- Iran will set up a pharmaceutical plant in Indonesia in the near future, IRNA reported in September 2012. According to the Indonesian chairman of Iran-Indonesia Parliamentary Friendship Group, Ahmad Shahab, the Ministry of Health had requested the plant. He was speaking at a meeting with several officials from the Iranian health ministry. Shahad also highlighted the need to work on the memorandum of understanding (MoU) signed between the countries five years ago.
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