Sanctions Squeezing Healthcare

Iranian women buy medicine from a pharmacy in Tehran on October 21, 2012. ATTA KENARE/AFP/Getty Images Iranian women buy medicine from a pharmacy in Tehran on October 21, 2012. ATTA KENARE/AFP/Getty Images

Iranian women buy medicine from a pharmacy in Tehran on October 21, 2012. ATTA KENARE/AFP/Getty Images

A fifteen-year-old named Manouchehr, who suffered from hemophilia, has died in southwest Iran due to shortages in medicine. His passing was recently announced by the managing director of Iran’s Hemophilia Center, Ahmad Ghavidel. Manouchehr, from a nomadic tribe in Dezful County, suffered an accident and could not survive in the mountains as his home clinics had run out of medicine. He died on the way to the hospital.

Sanctions imposed against Iran have caused soaring drug prices and a scarcity of life-saving medicines, threatening the lives of Iranians. The dire shortages of such medicines, including blood clotting agents for hemophilia and chemotherapy drugs to treat cancer, have resulted in the death of hundreds of patients. Over the past months, the deteriorating health of Iranian patients has become the subject of a new propaganda war between Iran and the West—to the extent that Iranian MP Mohammad Ali Pourmokhtar labeled the sanctions “genocide.”

“Now, the reserves of hemophilia drugs are coming to an end, and have already ended in many cases,” Ghavidel stressed, blaming the Western sanctions for the death of young Manouchehr.

“We believe that the US and EU hide behind a useless waiver on sanctions that exempt food and medicines. It is an unfounded claim. When the West bans the world’s banks from completing transactions with our banks, imports of medicine will suffer from serious disruptions.”

These are very critical circumstances—yet absolutely preventable. Restricting the sale of life-saving medicines to Iran is not the only impact of sanctions on the lives of the Iranian people. The country has experienced a number of earthquakes in the past two weeks. In the aftermath of these earthquakes, humanitarian organizations urged President Obama to issue a waiver to allow them to provide assistance to the earthquake-stricken cities. However, it seems a temporary lift of the embargo happens only if there is no other means to send enough aid to Iran.

While Iranian officials blame the West for the country’s deepening health crisis, pundits point the finger at the government itself. Medical imports are exempted from sanctions, which are targeted at Iran’s nuclear program. However, the government’s mismanagement and incompetence in handling the crisis, its crippled economy, and foreign laws restricting financial transactions with Iran have all put the lives of Iranian patients at imminent risk.

Government incompetence

Several high-ranking Iranian authorities have admitted the government’s incompetence in handling the crisis. Iran’s health minister, Marzieh Vahid Dastjerdi, was sacked in December after she censured the government for mismanagement of hard currency. “The government was supposed to allocate USD 2.5 billion to rare diseases at the reference exchange rate. Instead, it had been spent on the import of cosmetics,” said Dastjerdi in an address to the Iranian parliament a few weeks before being ousted by President Mahmoud Ahmadinejad.

The reference exchange rate is the lowest of three existing rates in the country’s flagging economy, and can be used only for food and drug imports. “We have been pursuing the currency that we were told was allocated to import medicine since February, but the amount received is so little it's not even worth mentioning," added Dastjerdi. “About USD 1.9 billion in funding, pledged by Mr. Ahmadinejad to the Health Ministry, has not materialized.”

[inset_right]Several high-ranking Iranian authorities have admitted the government’s incompetence in handling the crisis.[/inset_right]

Ahmadinejad later denied those allegations of government incompetence in a TV interview, and blamed the medicine shortages solely on the sanctions. In addition, there was speculation that intra-governmental rifts between Ahmadinejad and Dastjerdi’s deputy, Fazel Larijani (brother of the head of parliament, Ali Larijani), had been a main reason for the blockage of hard currency.

Mohammad Maleki, a prominent opposition figure and former head of Tehran University who is suffering from prostate cancer, criticized the government for the shortages in medicine in a recent interview. He recounted his personal struggle to find a now-rare life-saving ampoule: “I couldn’t find it anywhere in Tehran. I was told that I might find it in Qom’s Red Crescent. When I got there, there were plenty of people in desperate need for medicine. They told me my name isn’t in Qom’s list of registered patients. After much argument, they told me you could get only one ampoule, instead of three, and for free market price at that; which was three times higher. I had no other choice.”

He also censured government organizations for their mismanagement of the situation: “I was lucky to buy my medicine after all this hassle. Not everybody can do that. There are many cancer patients in Iran. What are they supposed to do? What wrong did these wretched people do that they should undergo these severe problems? Why are my ampoules only available in Qom, the city of ruling clerics?”

The shortage in drugs is mainly because of domestic mismanagement rather than international sanctions, said Dr. Akbar Abdollahi, the head of the Obeidi Pharmaceutical Company. “A European company was willing to export a cancer drug to Iran at a very low price, provided that one of its common analgesic drugs also obtains permission to enter the Iranian market,” he said. “However, the Health Ministry’s policies, which prohibit the import of common drugs, completely dissuaded that company,” added Abdollahi, who sees the constant changes in government posts as an inherent flaw in the health care system.

The most basic medical tools are being imported from China. An official report disclosed that unsterilized Chinese needles have broken into the market, despite the high quality of already-sufficient domestic production. “We took a sample of Chinese syringes and studied them in laboratory. The results showed that these syringes are unsterilized, even though they are advertised as sterilized,” said Mohammad Alizadeh, the managing director of the division of Iran's Red Crescent that provides medical devices. The Health Ministry still grants permission for the import of this Chinese product, despite there being eighteen producers in the country. While the largest domestic producer can alone supply 70% of total consumption, profiteering entices capitalists into low-quality Chinese medical products.

Dozens of Iranian have also reportedly died as a result of tainted Chinese penicillin. Although Iranian officials at first frantically denied the import of penicillin from China, a senior state official later confirmed the imports.

Crippled economy and profiteering

Official reports indicate that the price of imported drugs in Iran will double in the near future. “While the domestically produced drug prices will see a 20–30% increase, imported drug prices will soar up to 100% higher,” announced Mehdi Soleyman-Jahi, a senior official with Iran’s Food and Drug Organization a week earlier. Prices are expected to double because the government has stopped the allocation of foreign currency at the reference exchange rate to the import of drugs. While at the reference exchange rate every US dollar was equal to IRR 12,260, at the new applicable rate—the transactional exchange rate—every dollar is traded more than double, around IRR 24,750. This new policy came into effect at the end of March, the start of the new Iranian year.

Officials and Iranian Revolutionary Guard Corps-affiliated businesses are often accused of exploiting the gap between the two official rates. The profiteers are able to obtain foreign currency at the favorable reference exchange rate, which is nominally used for the import of food and drugs, and sell it for a profit at the market rate, which is three times higher. Instead of eliminating the reference exchange rate, the government has vowed to allocate USD 880 million to the health sector. That amount will not be spent entirely on drugs: it will also be used for insurance and other expenditures.

Ramezan Mohsenpour, the deputy health minister, said that this year, patients with particularly critical ailments will receive cash drug subsidies. He admitted that this decision was due to crippling economic sanctions against the country: “We are compelled to have a contractionary budget for the health sector in the new Iranian year, just like other sectors.”

The three years that the Subsidy Reform Plan has been in place have shown that, contrary to the government’s claim, consumers have to pay much more than what they receive as a cash subsidy for basic goods. It is therefore expected that with the health services cost index doubling over the last year, patients suffering from serieous illnesses like thalassemia, hemophilia, chronic kidney disease, dialysis, multiple sclerosis and cancer will find it even harder to bear the treatment expenses.

Ahmadinejad’s administration is also derided for the way it spends the revenues accrued from Subsidy Reform Plan. “In the last year, not even a penny of government revenues from the Subsidy Reform Plan have been spent on the health care sector,” said Hosseinali Shahriari, the head of parliament’s health commission.

The domino effect of the economic sanctions has finally hit healthcare sector, making the incompetent government adopt a contractionary fiscal policy and take austerity measures in regard to the society’s health. In the midst of Western sanctions targeted at Iran’s nuclear program and profiteering by corrupt Iranian officials, ordinary Iranians are losing their lives as they become the subject of propaganda war between Iran and the West.