As reports emerge of a renewed shortage of medications for chronic illnesses, Mohammad-Reza Zafarghandi, the Iranian regime’s Minister of Health, announced that drug prices are rising due to currency fluctuations, stating that exchange rate instability directly impacts medication costs.
On Sunday, January 5, the health minister also promised that to prevent further price hikes, the government would compensate insurance companies for the currency fluctuations so that the public would not have to bear the extra costs.
This pledge comes as Mehdi Pirsalahi, head of the Food and Drug Administration, revealed that the government owes 360 trillion rials (approximately $444.5 million) in pharmaceutical debts.
He also noted that the government has 200 trillion rials (approximately $247 million) in outstanding debts for medical equipment, adding that the long-standing nature of these debts is exacerbating liquidity issues.
On November 29, 2024, Iran’s health minister announced the removal of preferential exchange rates for pharmaceuticals and medical equipment, stating that medications would now be imported using the NIMA exchange rate.
The NIMA exchange rate, set within the “Integrated Foreign Exchange System” by Iran’s Central Bank, currently stands at 510,000 rials per U.S. dollar, whereas the open market rate has surged to 810,000 rials per U.S. dollar.
However, the health minister backtracked on his stance just a day later, stating that these government subsidies would continue into the following year.
The 42,000-rial preferential exchange rate for pharmaceuticals was eliminated last year, and the exact rate for next year remains undetermined.
Iran’s 2025 Budget Reduces Essential Goods Imports; Drug Shortages Worsen
On October 22, 2024, as the general outline of the 2025 budget bill was released, it became clear that President Masoud Pezeshkian’s government plans to reduce the allocation of foreign currency for essential goods imports to 12 billion euros, 20 percent less than the current level.
Additionally, the exchange rate for these imports will rise from 285,000 rials per euro to 385,000 rials, a 100,000-rial increase.
In the summer of 2022, Ebrahim Raisi’s government abruptly removed the preferential exchange rate for pharmaceuticals—which had previously been set at 42,000 rials per U.S. dollar—under a plan known as “DaroYar” (Medicine Supporter).
According to a May 2024 report from the Parliament’s Health and Treatment Commission, the cost of purchasing medicine for patients has increased by over 110 percent in practice.
Meanwhile, the number of scarce and unavailable medications has increased significantly compared to the period before the plan was implemented.
In recent days, multiple reports have highlighted severe medication shortages across the country.
Meanwhile, Mehdi Pirsalahi, head of Iran’s Food and Drug Administration, identified the severe liquidity crisis facing pharmaceutical suppliers as the primary cause of drug shortages.
He cited “oppressive price controls” as the second major factor in drug shortages, explaining that some medicines—mainly hospital-grade drugs—have been discontinued due to their lack of profitability.
