While the report points to structural problems in Iran’s pharmaceutical sector as well as mismanagement and corruption by the Iranian government as contributing factors, it determines that these are far outweighed by the consequences of American and European sanctions.
“Iran had the same government and the same companies running the pharmaceutical and medical supplies business—all with the same deficiencies—prior to the ratcheting up of sanctions,” says the report, “yet Iranian patients did not lack in healthcare in the same way that they do today.”
The report examines the possible explanations for the shortage and weighs them against testimony and evidence from pharmaceutical companies in Iran and the West. The conclusion is that the sanctions have closed off banking channels for medicine exports to Iran that are supposed to be shielded. “With Iranian banks blacklisted and international banks hesitant, very few options are left for Western companies trying to sell their medicine and humanitarian products to Iran.”
One testimony in the report, from an American pharmaceutical company representative, outlines how the sale of a patented drug necessary for organ transplants was blocked due to banking complications. The U.S. Treasury issued the necessary licensing and the sale had been deemed legal, yet this was not enough to overcome banking complications caused by sanctions. “Without a viable replacement for this drug,” states the report, “Iranian organ transplant recipients were left with no alternative.”
The report also discusses the consequences of sanctions preventing Euros and U.S. Dollars from being accessible to Iranians for trade. “Western sanctions leave Tehran short of the hard currency it needs to pay American and European pharmaceutical companies,” it says. “The pharmacy shelves are left empty as the Iranian importer waits for his turn to open a dollar or euro-denominated letter of credit.” The other effect is that the sanctions thus enforce a virtual barter system that companies and creditors are hesitant to participate in.
While Iran has reportedly turned to India and China for medicine purchases, this has posed its own problems. The report says that, because of the 20-year patent protection on most advanced medicines, which usually come from an American or European pharmaceutical companies, Indian and Chinese medicines are less effective and have increased side effects.
“Our patients showed major side-effects after using it, such as many terrible cases of skin peeling, which didn’t happen with the Western-produced version,” an Iranian doctor says, referring to an imported Chinese product. “So, there is now no interest by Iranian doctors in prescribing it, and if they do, the patient will avoid it and try to buy the original in the black market or through the help of friends and relatives abroad.”
Even though the findings portray a bleak future as the medicine shortage grows worse, the report does provide recommendations to alleviate the situation.
It recommends that financial institutions should be allowed to perform humanitarian transactions without fear of retribution in the form of high fines, which have resulted in bottle-necking and slow responses from the few institutions that do partake in such business.
The report also suggests that proactive efforts by the U.S. government will be required to ward off sanctions concerns of private businesses. “After years of U.S. coercive engagement with governments and banks around the world to convince them to cease business activities with Iran, active diplomacy will be required to reassure financial institutions that no punitive action will be taken for the facilitation of humanitarian trade with the Islamic Republic.”
The final recommendation urges that U.S. and European extraterritorial sanctions against the purchase of oil be amended to allow Iran to access the funds necessary for purchasing medicine from U.S. and European companies.
“Drilling holes in the painstakingly-crafted sanctions wall around Iran may be a hard pill to swallow for Western policymakers,” the report says. “But unless action is taken, medical supply shortages in Iran will become more acute, and the West will fail to live up to its objective of ‘not contributing to the suffering of ordinary Iranians.’”
Read the Wilson Center Report: Sanctions and Medical Supply Shortages in Iran