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Healthcare in Iran: FDA Adapts Currency Policy to Sustain Supply Chains Amid Sanctions

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Iran’s Food and Drug Administration (FDA) is implementing changes to its currency policy amidst ongoing sanctions that have significantly impacted the country’s ability to manage its pharmaceutical and healthcare supply chains. Seyed Heydar Mohammadi, the head of the FDA, reported the allocation of $1.5 billion for imported items this year, a figure that underscores the challenges and the strategic maneuvers necessary to sustain the healthcare sector under such restrictive conditions.

Mohammadi detailed that the allocated funds are intended to cover a wide range of essential imports, including critical medications, medical equipment, and other healthcare necessities that Iran cannot produce domestically at sufficient scale or quality. However, he anticipates a decrease in the allocated amount by year-end due to reductions across the supply chain, a consequence of both the sanctions’ financial pressures and logistical hurdles.

These reductions are expected as the initial allocated amounts encounter inefficiencies and additional costs as they move through the various stages of procurement, transportation, and distribution. Each stage in the supply chain adds layers of complexity and expense, exacerbated by the need to navigate international restrictions and the scarcity of willing trade partners. These challenges force the FDA to continuously adapt and seek alternative methods to secure necessary supplies without inflating costs to unsustainable levels.

Iran’s FDA Implements Alternative Financial Mechanisms to Sustain Healthcare Amid Sanctions

The sanctions have made traditional banking and currency transfer methods increasingly unviable, compelling Iran to explore and implement alternative financial mechanisms. These alternatives often involve higher transaction fees and less favorable exchange rates, further straining the already limited resources. The FDA’s allocation strategy, therefore, not only reflects a response to immediate healthcare needs but also a broader effort to maintain economic stability and ensure the resilience of Iran’s healthcare infrastructure against ongoing external pressures.

Mohammadi highlighted that Iran faces significant challenges in transferring currency and goods due to sanctions. These difficulties have reduced the FDA’s reliance on preferential currency. The FDA is focused on managing currency conditions while ensuring necessary funds for imports.

Efforts are underway to reduce dependence on preferential currency. Mohammadi noted that current dependency has decreased and expressed hope for its complete elimination with collaborative efforts. He emphasized that this reduction requires support from the Organization of Planning and Budget, which must provide the necessary liquidity to avoid increasing out-of-pocket expenses for citizens.


Iran’s FDA Shifts to Subsidized Currency to Ensure Affordable Healthcare Amid Sanctions

The FDA plans to transition from preferential currency to subsidized currency. The goal is not to eliminate supportive currency but to maintain consumer price control. Mohammadi assured that by providing subsidized currency, the FDA aims to keep out-of-pocket expenses stable, as achieved since 2022 with preferential currency. The primary objective of this policy shift is to control consumer prices. The FDA’s strategy includes maintaining the affordability of medicines and healthcare products for the public. By managing currency allocation efficiently, the FDA strives to ensure that the cost burden on consumers remains unchanged.

For successful policy implementation, the FDA needs continued support from the Organization of Planning and Budget. Adequate liquidity is crucial to prevent financial pressure on the population. Mohammadi stressed that the policy change should not result in increased costs for citizens.

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The FDA’s new currency policy aims to navigate the complexities of international sanctions while maintaining consumer price stability. By transitioning from preferential to subsidized currency, the FDA seeks to ensure the affordability of healthcare products. This policy demonstrates a strong commitment to public welfare and mitigating economic challenges, ensuring that essential medicines and medical supplies remain accessible and affordable for the Iranian population. Despite the adverse effects of sanctions, the FDA is dedicated to implementing financial strategies that protect consumers from increased costs and support the overall health and well-being of the nation.


Resource: Mehr News, May 18, 2024

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