Editor's Note: Global Dose is a new editorial feature that will examine the state of pharma beyond the borders of the United States, exploring the pluses and minus of different economies, governments, climates, workforces, and regulatory requirements. Each month, this feature section will focus on the ins and outs of the pharma industry in a different country or region.
Manufacturing and distributing safe, effective and affordable pharmaceuticals is a challenge within itself — add political upheaval and widespread corruption to the scenario and the situation becomes extremely complex.
What many in the U.S. know of Iraq is mired in extreme political conflict, centered around efforts to defeat the Islamic State in Iraq and Syria (ISIS). Former Iraqi President Saddam Hussein, who was executed in 2006, lives in infamy as one of the most brutal dictators in history. In recent news, the U.S. carried out airstrikes against multiple Iranian-backed militia sites in Iraq in retaliation for a rocket attack near capital city, Baghdad.
Yet, in the late 80’s, Iraq, which is only about twice the size of the state of Idaho, boasted the largest pharma market in the Middle East — larger than Egypt and Saudi Arabia, which both more than double Iraq in geographical size. At the time, the Iraqi government was investing heavily in health care, aided by a flourishing oil sector. But decades of corruption, inappropriate policies and economic sanctions, now compounded by the coronavirus pandemic, have taken a toll on the country’s wider economy.
Iraq’s health care system is a mixed initiative of the public and private sectors, and many believe that the strong private sector has the capacity to supplement the struggling public sector. To that end, there exists an opportunity especially for foreign pharma partners to invest their expertise into the market, resulting in a growing competitive market that will edge out corrupt practice, bettering the health care sector for the Iraqi people.
Iraq was established as an independent state in 1932, on land that was home to ancient Mesopotamia civilizations. Up until the 1950’s, Iraq, with a portion of its land mass part of the historical Fertile Crescent, had an economy dependent on agriculture and farmlands. The discovery of oil nearly a century ago began shifting the country’s economy heavily towards petroleum exports.
Iraq’s GDP was $225.50 billion in 2019, according to World Bank figures, placing the country just within the top 50 global economies. The GDP is driven by industry — mainly the oil sector, which provides roughly 85 percent of government revenue. Less than 4.5 percent of the country’s GDP is spent on the health care sector, giving Iraq one of the lowest percentages of pharma spending as a proportion of GDP among countries of the same economic class (for comparison, the U.S. spending percentage is around 18).1
Open Access Rheumatology: Research and Reviews 2019:11Despite this, the pharma sector in the Middle East as a whole has observed remarkable growth over the last few years. Iraq’s pharma market today is worth around $3.5-4 billion. Business Monitor International estimates that the Iraqi pharma market grows about 10-15 percent per year.2 Ali Mosawi, founder and chairman of Al Hayat Scientific Office — one of Iraq’s oldest pharmaceutical agents and trusted partner to many of the world’s leading pharma companies — is inspired by current happenings.
“There is a vibrancy in the country and our market which I have not seen for some time, driven by the enthusiasm of the young population. Before the current pandemic, the cities were again becoming exciting centers of intellectual and academic study, with medical and scientific academies overwhelmed with applicants and corrupt practices being put under ever greater scrutiny,” he says.
Iraq’s Ministry of Health (MOH) is broadly responsible for ensuring the availability of safe and effective drugs. Drugs are approved by the special committee for the National Board of Drug Selection (NBDS) operating under the MOH.
1. The State Company for drug Industries and Medical Appliances (SDI)
2. Al-Safa Pharmaceutical Industries
3. Pioneer Pharmaceutical Industries
4. Iraqi Pharmaceutical Industry
5. Arab Company for Antibiotic Industries (AKAI)
Source: Presentation by Dr.Mustafa Al-Hiti, President, Iraqi Pharmaceutical Syndicate - July 2019
The speed of drug approvals in Iraq is improving, with timelines estimated at around two years and as quick as six months for drugs going through the accelerated review pathway. Iraq is increasingly supportive of approvals from regions with stringent regulatory authorities (such as the EU’s EMA or the U.S. FDA) for fast track approval.
Pharma companies in Iraq must be registered with the MOH Department of Pharmacy. Once registered, every product needs to be tested and licensed. It is possible for international companies to bypass the prerequisite of company registration if they do business through a local partner who imports the product from them. Al Hayat, for example, is AstraZeneca’s exclusive agent in Iraq, providing market access, facilitating participation in pharmaceutical tenders, and ensuring the reliable and compliant distribution of AstraZeneca drugs.
Iraq’s NBDS derives an Essential Medicine list which indicates the medicines that hospitals and pharmacies should stock at all times. Getting products on the list is beneficial for pharma companies, but, according to Mosawi, the process isn’t easy.
“You must explain why there is an essential need for that drug in the country, as well as the cost efficiency of adopting it. Once you have approval, you go through a registration process. You will get an import license during the registration process so that the drug can be made available to the private sector.”
Counterfeit drug problems
Most assessments rank Iraq as the “highest risk” when it comes to political and business climates. Much of this is attributed to ongoing political unrest. Anti-government protests reached a peak last year, as demonstrators took to the streets in mass to protest corruption, unemployment and what they saw as government failure to use oil revenues on public services, such as health care.
Corruption is also a contributing factor to increased risk. For years, scattered, anecdotal accounts have been trickling out of Iraq about the severity of the health care situation — stories about patients lashing out, sometimes violently, at doctors for misdiagnosis or prescribing medicine that had caused complications, only to find out later that counterfeit medicine was to blame.
In 2014, Iraq’s counterfeit drugs industry had an estimated worth of $1 billion a year — a fifth of all pharmaceutical sales in the country.3 A more recent Reuters report claimed that 40 percent of medicine in the market is smuggled from countries including Turkey, Iran, Jordan, Lebanon, India and China, according to public statements from health officials.4
Mosawi contends that the situation is difficult but not impossible. “Yes, there are unscrupulous actors who seek to take advantage of the Iraqi market and this remains a constant challenge for us.” Al Hayat, however, has found success by working with international partners who insist on strict compliance standards.
“We now view our regulatory responsibilities through the same lens as the international ones of partners like AstraZeneca, MSD, Servier and Pfizer, who are beholden to the Foreign Corrupt Practices Act and European directives on anti-money laundering and corruption,” says Mosawi.
Each batch of medicine distributed by Al Hayat is marked by a secure double hologram system, reassuring pharmacists that the drugs are 100 percent genuine. In addition, Al Hayat stores its medical products in state-of-the art warehouses at which strict quality control procedures as defined by the World Health Organization are enforced.
As the world battles the health and economic implications of the coronavirus pandemic, progress on preexisting challenges within Iraq’s pharma sector may understandably be slowed. But gradual pushes by the government are helping to rebuild an ailing system.
In 2019, the MOH enacted reforms to allow private businesses to own hospitals. On the regulatory side, the MOH has driven forward the need for stricter compliance requirements in the sector, supported by growing expertise coming from the country’s medical schools.
“This, with the requirements of global companies entering the market, has created pincer pressure which has driven the expectation ever higher,” says Mosawi. “The sector is making great strides in the right direction. As international partners continue to grow in the market, their standards of safety and compliance can only further promote this growth.”