The health sector in Iran has improved over two decades ago. Iran has been able to provide public health preventive services through a broad network of primary health services, resulting in a significantly lower maternal and child mortality rate and higher average life span. The average cost of health care for every household in Iran is 637.2 USD, accounting for almost 6% of the total household budget. According to the latest statistics, women life expectancy in Iran is 74.6 years and for men 72.1 years.
Iran’s health market has a turnover of 25-28 bn USD annually and most of the world’s health care services are provided in an excellent manner as well as in stem cells, infertility and advanced surgeries. More than 96 to 97% of Iran’s health needs are obtained through the domestic market. The share of health sector from GDP and health expenditure from government resources is about 17% and 7.5%, respectively.
The share of patients’ payment in public hospitals in urban and rural areas has decreased in recent years, with the share of urban patients in public hospitals dropped from 31% in the year ended March 2013 to 6% in the year ended March 2017. Also, the rate for rural patients has fallen by 3%.
In Iran, there are 1.7 hospital beds per 1,000 people, 62% of which are outdated, with 64% in Tehran. Only 4% of hospital beds are dedicated to intensive care. In the year ended March 2016 there were 899 active hospitals and 148,035 permanent beds, of which 80.42% belong to the public sector and 19.57% belong to the non-government sector. Of the total, 86.11% of beds belong to the public and 13.89% belong to the non-governmental sector.
By the year ended March 2016 there were more than 4,168 clinics and polyclinics, of which 50.6% are non-governmental and 50.4% public.
Share of healthcare from household budget
In the year ended March 2016, the average net cost of a household in the health sector was 637.2 USD. In general, 6% of the urban gross household budget is spent on health care.
Healthcare reform plan
As the custodian of healthcare in Iran, the ministry of health and medical education started “Healthcare Reform Plan” from May 2014. The reforms are sought to be made three approaches such as financial protection of people, establishment of justice in accessing healthcare services and promotion of services quality. The plan includes 8 executive packages that are:
- Decreasing expenditures of patients admitted in public hospitals
- Supporting physicians in order to stay in deprived areas
- Attendance of specialist physicians in public hospitals
- Promoting the hoteling quality in public hospitals
- Promoting the quality of physician visits in public hospitals
- Promotion of natural childbirth Plan
- Plan for financial support of refractory patients, patients dealing with special diseases and poor patients
- Establishing air emergency units
Healthcare system challenges
- The vulnerability against unexpected accidents
- Neighboring countries health threats
- Social damages and complications caused by social factors affecting health (addiction, poverty, vulnerable groups, divorce, etc.)
- Urbanization rapid growth and its negative effects
- Environmental and industrial air pollution
- The aging population process and the increasing need against chronic disease and expensive services
- Uncontrolled smuggling of food, health and cosmetics
- Unbalanced development of public resources in the regions
Health investment opportunities
There are six fields that are considered to be the focus for foreign investments:
- Hospital construction
- Medical imaging
- Comprehensive centers for cancer patients
- Oral and dental hospitals
- Dialysis centers and support for renal disease patients
- An efficient and equitable network for provision of various basic medical cares
- Medical students’ education inside the healthcare network with a social-oriented medical approach
- Recruiting different scientific groups in order to plan and merge healthcare programs inside the network system
- Ministry of health and medical education was successful in promotion of its performance with merging of academic education section, planning and providing healthcare services
- Utilizing Iran’s potentials healthcare system for practical researches’ conduction and being benefited in promoting health effective direction
- Like other countries, Iran healthcare system is challenged with drastic cost increase
- Insurance companies have fallen behind their original goal in protecting patients against unpredictable costs
- Absence of healthcare services classifying and complete referral system has lead into services over consumption and incorrect cost of financial and human resources, caused economic inefficiency
- Growing number of hospitals and healthcare centers under development plans
- Economic growth will result in rising of medical devices import
- Large population, well-educated workforce and pent-up demand indicate enormous long-term potential
- Increasing cities’ slums
- Increase in environmental pollution and pollution in metropolises
- Budgetary constraints in healthcare system
The production of detergent powders in recent years has been from 400,000 tons to more than 680,000 tons, but in the year ended March 2017 this was limited to 685,600 tons, while there is a capacity to produce 1,610,000 tons of powder detergent.
The amount of detergent powder import decreased by 4.7% in the year ended March 2017 compared to year ended March 2016 and increased 14% in value terms. The amount of detergent powder import from April to September 2017 was 3.7 mn USD.
In the year ended March 2017, the export of detergent powder experienced a significant increase of 42.3% and 61.3% in terms of value and weight, respectively. Due to the economic improvement of Central Asian countries, the establishment of detergent production units and competition are the reasons to optimize this product export quality.
Countries such as CIS, Iraq, Turkey and Pakistan are Iran’s export targets and some companies have also been trying to export to distant countries such as Romania. The main export targets for Iran’s hand washing powder are Iraq, Turkmenistan, Tajikistan, Afghanistan, Pakistan, Azerbaijan, Georgia, Armenia, Kazakhstan, Turkey, Oman, Kuwait, Cameroon, Uzbekistan, Somalia, Russia and Bahrain. In the field of automatic washing powder export, Iraq, Tajikistan, Georgia, Turkmenistan, Armenia, Azerbaijan, Afghanistan, Lebanon, Pakistan, Belarus, Kyrgyzstan, Uzbekistan, Oman, Turkey and Bahrain are the main targets, but hand washing powder import was mainly from Turkey and the major exporters to Iran in Washing Machine Powder are UAE, Turkey, Germany, Poland, China and Italy.
In Iran, the medical equipment sector has been considered for the value added it generates, as well as an increase of 80 mn people, an increase in life expectancy, changes in epidemiologic characteristics, annual increase in health and medical expenses, increasing number of plans and the development of hospitals and health care centers will boost the growth of this industry. The medical equipment in Iran has a market size of 1.7 bn USD.
More than 500 medical equipment companies are operating in Iran. The number of medical equipment products has been reported over 84,000 items. These units’ activity has resulted in self-sufficiency in some products, as the import of some goods is banned by the government most of which are in the category of consumables and hospitals. Nearly 90% of domestic market demand are state hospitals and healthcare facilities, while private hospitals and charities account for only 10% of the demand share. It should be noted that a significant share of domestic demand is provided by import.
Currently, the relative contribution of medical equipment import to domestic production is 60 to 40. The domestic production of medical equipment is not simple process and there is a challenging competition between domestic and foreign manufacturers. Foreign manufacturers own the majority of capital and facilities; thus in some cases the purchase of domestic products is guaranteed. For this reason, import restrictions on medical equipment are applied and wherever domestic capacity is quantitatively and qualitatively responsive to market demand, import are limited. This means that 60% of the currency is provided through import of medical supplies, but when it comes to the number of products, much medical equipment is produced domestically. In terms of number, the amount of medical equipment produced domestically, is more than the number of imported products, but in terms of price and value, the total medical equipment imported has higher value than domestic production. Many of these imported equipment are high-tech products from developed countries such as Germany, the United States and some other European countries.
Despite the fluctuations, import growth has been positive in recent years. In fact, the growth of the medical equipment market volume in recent years seems to have been due to the expansion of import volume. With the lifting of sanctions, it is expected that the inflow of foreign direct investment will boost, which may lead to the share of domestic production downfall. The volume of medical equipment imported in the past years varied from 800 mn USD to 1,200 mn USD. The cost of the imported medical equipment in the year ended March 2017 had a tangible decrease, with average decrease of 35% comparing the previous years, as many of the imported medical equipment were purchased at a lower price than three to four years ago. In the year ended March 2017, import have risen by 2% compared to the previous year. France, Italy, Turkey, South Korea are named as main exporters. In importing medical equipment, Iran rank is 38.
Currently, there are about 500 medical equipment manufacturers operating between 70 and 80 companies in the export sector. In the field of medical equipment, Iran is not considered a major exporter on the international level and the value of export has grown steadily in recent decades and despite the market fluctuations, export continued to grow. The export of medical equipment in the year ended March 2017 was 21.8 mn USD, which grew 43% year-on-year. Iran’s export rank in medical equipment is 88 in the world.
- Self-sufficiency and no need to import consumable and hospital and orthopedic equipment
- Improving of some domestic companies production capacity with the aim of export balancing
- Medical equipment-based academic fields
- Successful export of products e.g. monitoring and diagnosticimaging fields
- Medical equipment Increased domestic production
- The market for medical and dental equipment is very high, thus its import is justified.
- Time-consuming administrative procedures in medical equipment sector lack of export incentives in line with the medical equipment industry
- Lack of access to high-quality goods and tools in the production sectors of high-tech and orthopedic equipment
- No research and development in medical equipment companies
- Sanctions lifting and economic boom, access to basic materials and up to date knowledge
- Suitable regional market, massive population of 80 mn as the domestic market
- The annual change in the health sector cost due to government investments
- The government undertakes to provide certified licenses in accordance with international standards for the approval of the medical equipment products activities.
- The high profitability of importing medical equipment and surgical supplies with respect to low tariffs and the allocation of government currencies
- Sanction lifting issues
- Smuggling in the field of medical equipment is very high
- Based on market survey, domestic fraudulent producers and unqualified goods under the name of domestic production are the most important threats to domestic producers , which can be more destructive than import.
– Iran is a great market with fast growth.
– The largest number of hospitals in the Middle East and the 5th largest medical equipment market in the region belongs to Iran.
– Neighboring countries conditions provide the opportunities for investment, export and equipping the hospitals for Iranian medical equipment companies.
Medicinal & medical equipment tariffs
In 2017, medicine and medical equipment have the lowest customs tariff (about 10%), for the import of drugs that have no similar production inside the country. The trade law prohibits the import of medical goods from the payment of value added tax.
The largest number of hospitals in the Middle East and the 5th largest medical equipment market in the region belongs to Iran