Iranian medicine prices soar as currency plunge strains health sector

Iran’s pharmaceutical industry is grappling with sharp price increases born out of the weakness of Iran's currency, causing some drug costs to more than quadriple.

The increases are likely to gain pace as the government reduces foreign currency allocations for essential goods.

Newly released data from Zahravi Pharmaceutical Company illustrates the extent of the price surge.

The price of 20 milligrams of basic antibiotic Gentamicin rose from 460,000 rials to 2,366,700 rials—a 415% increase. Vitamin B12 prices climbiedby 156% from 526,000 rials to 1,355,980 rials.

Health Minister Mohammadreza Zafarghandi recently linked rising medication prices to currency fluctuations.

“Medication prices are influenced by exchange rate fluctuations and will undergo changes,” Zafarghandi said, while emphasizing the government’s commitment to supporting consumers.

“The government intends to pay the difference caused by exchange rate changes to insurance companies. This amount will be provided to them so that the price changes for medications are not paid out of people's pockets,” he added.

Despite these assurances, the impact on the healthcare system remains a growing concern. The rial has nearly a third of its value since September, making it increasingly expensive for pharmaceutical companies to import raw materials.

The 2025 budget outlined by President Masoud Pezeshkian’s administration includes a 20% reduction in foreign currency allocations for essential goods and a 35% increase in the subsidized exchange rate, further straining the sector.

Pharmaceutical manufacturers are already facing higher production costs, and the latest price increases are expected to ripple across the industry.

Economic observers caution that government policies may place additional burdens on patients. The head of the Tehran Chamber of Commerce previously warned that securing foreign currency and local rials for production remains a challenge, particularly in sectors reliant on imports like pharmaceuticals.

Zahravi Pharmaceutical Company’s price hikes may be the first in a wave of similar adjustments across the industry, as other manufacturers are expected to follow suit. While government intervention aims to cushion the blow, the overall trajectory suggests an increasingly precarious healthcare system.

With further cuts in subsidies and rising exchange rates on the horizon, patients and providers alike face a difficult year ahead.