Tuesday 8 January 2013


Indian medicines for Iran's patients
By Vijay Prashad

Between December 17 and 19, 2012, a business delegation from the Pharmaceutical Export Promotion Council of India (Pharmexcil) went from Delhi to Tehran. The spur for the visit came from the Ministry of Commerce of the Government of India, which responded to a plea from Iran. The UN Security Council sanctions and the further embargo by the United States and European Union on Iran have created a major shortage of pharmaceutical goods in Iran.

In November, the Iranian media published a list of vital drugs that are lacking, medicines for blood disorders, brain tumors, bronchitis, cancers, epilepsy, heart ailments, meningitis in HIV-AIDS patients, and multiple sclerosis. The media showcased the

Dr Seyed Alireza Marandi, president of the Iranian Academy of Medical Sciences, wrote to UN secretary general Ban Ki-moon on November 26, pointing out that the excessive sanctions by the US-EU have inflicted "pain and misery upon ordinary people". The US Treasury noted, however, "It has been the longstanding policy of the United States not to target Iranian imports of humanitarian items, such as food, medicine and medical devices." In October, the US Treasury introduced a "standing authorization" that permits US firms to sell some medicines and supplies without seeking permission from the Office of Foreign Assets Control.

Marandi responded to this authorization in his letter to secretary general Ban. "While the United States and the European Union claim that their sanctions do not directly prohibit the export of medicines and medical equipment to Iran, the financial sanctions they have imposed on the world make it vastly more difficult - in many instances impossible - for Iranian importers to pay for these items, effectively barring their transfer to Iran."

The US retorted, "If there is in fact a shortage of medicines in Iran, it is due to choices made by the Iranian government, not the US government."

The question of choices and currency divides the Iranian government. Minister of Health Marzieh Vahid Dastjerdi told Iranian television that only 25% of the US$2.4 billion set aside for pharmaceutical imports have been handed over to her ministry. Foreign currency was simply not available to pay for the imports. "Medicine is more important than bread," she said. "I have heard that luxury cars have been imported with subsidized dollars but I don't know what happened to the dollars that were supposed to be allocated for importing medicine."

Foreign currency is not in hand, but oil exports to India have created a treasury of Indian rupees in Indian banks that are owned by Iran. If Iran could convert these idle rupees into Indian pharmaceuticals, it would solve two problems: its need for the drugs, and the paralysis of that money. Annually, India has a $10 billion deficit against its import of Iranian oil. This money would be helpful for Iran if it could be converted into Indian drugs.

An opportunity for India
During the Pharmexcil visit to Tehran in December, the Iranian government agreed to bypass production registration requirements, and the delegates met with Iranian buyers to discuss procedures for sales. After the visit, the Iranian government let the Indians have a list of products that are urgently needed, such as Amiodarone Hydrochloride, Amphotericin, Cefotaxime, Gadopentetate Dimeglumine, Iopromide, Mesalazine, Nicotinic Acid, Thiabendazole, Thioguanine, and Valganciclovir.

If Indian pharma supplies the medicines on the list turned over by the Iranians to the Indian government on December 26, this would be the largest export of Indian drugs to date.

On January 2, at Delhi's Observer Research Foundation, the head of Iran's Supreme National Security Council, Saeed Jalili, said that US-EU sanctions on Iran are an "opportunity" not a "threat". India's growing domestic pharmaceutical companies can now expand into Iran without care, he pointed out. "We view relations with India favorably," Jalili said.

Jalili's comments echoed the remarks made by Yash Sinha, the Additional Secretary in charge of Pakistan, Afghanistan and Iran at the Indian Ministry of External Affairs. At a speech in mid-December, Sinha said that Iran remains "an important country" in the neighborhood, and that there was "great scope" for increasing India-Iran trade. Because of US-EU sanctions, Sinha pointed out, there is an opportunity to increase Indian exports to Iran "if payment and shipping related difficulties are overcome".

Indian pharmaceutical firms have done well in 2012. The BSE Healthcare Index rose by 40%, far more than the market in general. This rise is largely due to the opportunities posed by the US generics market. As medicines lose their patents in the US, Indian firms have been well poised to seize those medicines and market them at the low prices that they now earn producers. This will be a regular revenue stream for some of the bigger players among the Indian producers.

Some firms, such as Sun Pharmaceuticals, have cleverly used their US profits to buy up assets in the US market and elsewhere. But others have begun to look elsewhere, toward Malaysia into the market of the Association of Southeast Asian Nations for instance, or else to Iran.

The cache of Indian rupees held by Iran in the Indian banks and the eager Iranian market make this an attractive opportunity for the Indian pharmaceutical firms. The problem will be how to balance the interest in US generics and Iranian needs. The US "standing authorization" on drug sales provides an indication that Indian pharmaceuticals need not worry about its competing interests for the present.

Political pressure from the US to isolate Iran has worked on the Indian government, but it has not been able to thwart the regional advantages entirely. That India's Sinha and Iran's Jalili both see the sanctions regime as a regional advantage and that they say so openly says a great deal about the limits to US authority in this region.

One should not make too much of this of course. At the same time, the Indian government has promised to further reduce its oil imports from Iran and to accept the US offer of Saudi oil, despite the fact that Iranian oil is both sweeter (easier to process) and cheaper (lower transport costs). India is placed between the government's desire to please Washington and the realistic business needs of its growing economy.

Vijay Prashad is the author of The Poorer Nations: A Possible History of the Global South, foreword by UN Secretary General Boutros Boutros Ghali (London: Verso Books, 2013).

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