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Iraq Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Jan 2011, Pages: 47
Business Monitor International's Iraq Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Iraq's pharmaceuticals and healthcare industry.
Iraq is recovering slowly after the US-led invasion of 2003, but the war – and the years of economic sanctions and neglect before it – have left an indelible mark on the country. High operational risks continue to discourage all but the most daring investors, who were rewarded for their fearlessness with a substantially higher healthcare budget in 2010. However, much of the 2010 healthcare budget was spent on the construction of hospitals, which will not increase pharmaceutical spending in the short term, except though employment creation. This budget increase was linked to oil prices and has driven up pharmaceutical spending, but Iraq remains in the shadow of its more stable neighbors and has yet to fulfill its potential.
BMI believes the Iraqi government’s actual expenditure is likely to be less than the US$4.25bn promised. Reports in the local media indicate that the government was struggling to reach US$4bn in healthcare investment for 2010, partly due to a lack of foreign investment. A 2009 development report stated that only 6 of 150 health centres commissioned have been completed on time, indicating a large loss in funds to corruption, mismanagement and theft.
December 2010 saw the leader of the Sunni political faction, Ayad Allawi, agree in principle to join Nouri al-Maliki's coalition government, as head of a newly created council to oversee security and foreign policy issues. This should mean that a government may be formed and might finally start legislating in early 2011. In an effort to appease the factions within the coalition, the government is creating new bureaucratic positions to satisfy these groups. In the short term, this could speed up the formation of a new government, in the long term it could lead to crippling bureaucracy and corruption.
The majority of tenders continue to be issued by the State Company for Importation and Distribution of Drugs and Medical Appliances (Kimadia). BMI believes that the state-sanctioned monopoly that the company holds over the supply chain is a concern for investors looking at Iraq’s pharmaceutical market. Kimadia takes advantage of increased purchasing power to reduce purchasing prices, but the lack of a free market system makes it easier for criminals to engage in corruption and counterfeiting drugs.
Iraq's first children's hospital was completed in Basra in September 2010, representing an important development for an area that has seen a large increase in rates of child cancer and birth defects over the past 15 years. Iraq has been in three major wars in its recent history. Consequently, the people of Southern Iraq have been exposed to a variety of hazardous chemicals. In areas with poor infrastructure, that have seen the most intense fighting, such as Basra and Fallujah, the rates of leukaemia and child birth defects have more than doubled in the 15 years between 1993 and 2007. In Fallujah, the rate of birth defects is thought to have risen by 1,500% since 2003. This was also the area where the US military admitted using controversial weaponry, including white phosphorus.
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