The Medical Device Market: Iran

Government investment in Iran has resulted in an improved health sector, with modernised services and facilities being built annually. Ownership of hospitals is evenly split between the public and private/charity sectors but can be fragmented due to lack of co-ordination between agencies. A series of Development Plans, spanning consecutive five-year periods from 1990, have aimed to rejuvenate Iran's health sector by raising hospital bed and personnel numbers, building primary healthcare facilities, improving family planning and immunisation rates, focusing on care of the elderly and prevention of non-communicable diseases, reforming the state medical insurance scheme and social welfare systems in addition to attracting foreign investment. However, there is no firm evidence of the success of these measures.

Scarcity of foreign currency means that prospective Iranian buyers are very thorough in evaluating and selecting products before purchase. Most companies find the appointment of a local distributor to undertake negotiations the most convenient method of doing business. Foreign firms, especially US-based companies, find it difficult to operate in Iran due to tense international relations and find themselves distributing their products via these agents, or even via neighbouring countries such as the UAE. Local agents represent companies from as far afield as Denmark, Germany, Japan, New Zealand, Switzerland, the UK and the US. Alternatively, companies can operate from the Kish Island Free Trade Zone, where 100% foreign ownership is permitted. Major government contracts are made through tenders issued by the relevant ministry. Little information on the regulatory environment is available.

Despite having a population larger than the UK, the Iranian market for medical devices is relatively small, especially in per capita terms. The market is expected to rise steadily over the next few years, due to both continued investment in the healthcare system and low levels of domestic production resulting in reliance on imported goods.

Continued healthcare investment may prove to be an opportunity for the Iranian medical device market. However, foreign investment and international aid could now be in jeopardy with the restarting of the controversial nuclear development programme. The creation of a coherent regulatory framework and the clarification of procedures could attract investors. Expansion of domestic production capabilities would also boost the market and lessen Iran's reliance on overseas imports.