Skip to main content

How US sanctions intensify rent-seeking in Iran’s pharma sector

As US sanctions hit Iranian patients, it is becoming clear that the impact of the sanctions — including renewed opportunities for rent seeking — are also intensifying turf wars in the country’s pharmaceutical sector.
An Iranian woman shops at a drugstore at the Nikan hospital in Tehran on September 11, 2018. - Judges at the International Court of Justice in The Hague unanimously ruled Washington should remove barriers to "the free exportation to Iran of medicines and medical devices, food and agricultural commodities" as well as airplane parts. Iran produces 96 percent of the drugs it uses, according to the Syndicate of Iranian Pharmaceutical Industries, but imports more than half the raw materials to make them. (Photo

The recent resignation of Iran’s minister of health, Hassan Ghazizadeh Hashemi, led to many speculations. Officially, insufficient allocations in the next Iranian year (beginning March 21) was cited as the reason, but commentators also referred to factional infighting within the Hassan Rouhani administration as well as shifting interests as a result of renewed sanctions. One hint emerged when a video was released from the outgoing minister’s last meeting with his senior staff, in which he stated that practices such as corrupt deals, importation of low quality products and rent-seeking would clash with his personality. This statement would suggest that Ghazizadeh’s resignation was the consequence of the shifts in the industry as a result of renewed US sanctions, i.e., the fact that Iran would have to yet again start importing medicine and medical devices from Asian sources. However, there is more to this development than meets the eye. In fact, a closer analysis may indicate how sanctions, rent-seeking and politics overlap in Iran.

Before shedding light on the related statements, three facts need to be considered:

Access the Middle East news and analysis you can trust

Join our community of Middle East readers to experience all of Al-Monitor, including 24/7 news, analyses, memos, reports and newsletters.


Only $100 per year.