Medicine shortages and rising costs threaten Iran's healthcare system
Maryam Sinaiee
Iran International
Iran’s healthcare system is facing mounting challenges, with medicine shortages and soaring costs reaching alarming levels.
Iran International
Iran’s healthcare system is facing mounting challenges, with medicine shortages and soaring costs reaching alarming levels.
In February, Iran’s Pharmaceutical Association sent a letter to Ali Ahmadian, Secretary of the Supreme National Security Council, highlighting the government’s failure to pay its debts to pharmacies—estimated in the hundreds of millions of dollars, according to media reports.
The financial strain has severely disrupted pharmacies’ cash flow, hindering medicine procurement and availability. The letter warned that the crisis poses a serious threat to public health.
The head of Iran’s Medical Council (IRIMC), the non-governmental body responsible for medical licensing and regulation, also recently wrote to President Masoud Pezeshkian, raising concerns over delayed government payments to pharmacies.
The issue stems from government agencies such as the State Welfare Organization failing to pay their share of the cost of medicines dispensed to patients.
To keep essential medicines affordable, the Iranian government tightly regulates pharmaceutical prices and provides subsidies.
In 2022, President Ebrahim Raisi’s administration increased the official foreign currency exchange rate for medicine and medical equipment imports from 42,000 to 285,000 rials per dollar—nearly a seven-fold rise. Current free market exchange rate is more than 900,000 rials per dollar.
Authorities defended the move as an effort to curb the smuggling of subsidized medicine to neighboring countries. Another price increase of at least 20% is expected in the next Iranian calendar year, starting March 20, when new government exchange rates take effect.
In January, Iran’s Central Bank reported that it had allocated $3.4 billion for medicine, medical equipment, and pharmaceutical ingredients since late March 2024. Of this amount, $2.4 billion was provided to importers at the preferential rate of 285,000 rials per dollar.
Since March, the rial has depreciated sharply, plummeting from approximately 600,000 to over 900,000 per dollar in the open market.
Pharmaceutical companies report that currency shortages and the depreciation of the rial have significantly increased the cost of both imported medicines and domestically produced drugs that rely on imported ingredients.
The shortage of foreign currency allocated for medicine imports has fueled a thriving black market, where vital medications—especially those for cancer and rare diseases—are sold at exorbitant prices.
Despite these rising costs, strict government price controls have rendered the production of certain medicines unprofitable, leading some companies to discontinue manufacturing essential drugs.
Annual inflation has risen by around 40 percent, each year in the past five years, and the rial has lost 95% of its value since 2018 when Donald Trump withdrew from the 2015 nuclear deal and re-imposed draconian sanctions on the country.
The economic strain has taken a heavy toll on Iranian households. The massive depreciation of the rial and high inflation have drastically increased the cost of living, including expenses for food, housing, and healthcare and driven over 30 percent of the population below the poverty line.
According to Iran’s Statistical Center, healthcare accounts for approximately 10% of urban household expenditures.
Health Minister Mohammad-Reza Zafarghandi recently acknowledged that high medical costs are pushing many families into poverty, with lower-income groups often forgoing necessary treatments due to financial constraints.
Further compounding the crisis, Iran’s healthcare system has been hit by a mass exodus of doctors and nurses in recent years. Many medical professionals have emigrated to countries like Oman in search of better wages and improved living conditions, exacerbating the strain on Iran’s healthcare sector.
The conservative Tehran-based website Tabnak quoted Hossein Allah-Karam, leader of the vigilante group Ansar Hezballah, as saying that US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu cannot follow through on their threats against Iran.
Tabnak described Allah-Karam as a political science professor at the University of Tehran and quoted him as asserting that Trump has failed to back his threats against Hamas. He concluded, “His other threat about bombing Iran if we do not sign a paper for him also cannot materialize.”
The hardline figure further claimed, “Trump’s performance has forced the United States and Israel to kneel before Gaza.”
He added, "We have achieved this with the capabilities we already have, so why should we challenge ourselves by opting to upgrade our capabilities?" This was perhaps a veiled reference to producing nuclear weapons and more potent ballistic missiles.
Allah-Karam’s remarks align with recent statements from Supreme Leader Ali Khamenei and some IRGC commanders suggesting Iran is prepared for conflict with Israel.
In a recent speech, Khamenei called for upgrading Iran's ballistic missiles. Meanwhile, IRGC deputy commander Ali Fadavi said on Monday that a third direct attack on Israel will happen in due course. "Operation True Promise 3 will occur at the right time," Fadavi said.
Fadavi made these remarks in response to statements by Israeli and US officials regarding Iran’s perceived weakness, as well as Trump’s threat that Israel would bomb Iran if Tehran refused to negotiate with the United States over its controversial nuclear program.
He stated, “Not a single day has passed without the world's evildoers—the Great Satan, America, and its allies—waging war against us.”
Reformist political commentator Ahmad Zeidabadi warned on Telegram that "Netanyahu has already made preparations for attacking Iran in the coming months." He appeared to be referring to Trump's backing of the plan, possibly alluding to the shipment of US-made bunker buster bombs to Israel and stationing of US B-52 bombers somewhere in the region.
Zeidabadi added that "all official statements and both direct and indirect remarks from Israeli and US officials suggest that such an attack is imminent." He cautioned that "while it might be a limited strike, its consequences could be extremely destructive and uncontrollable."
On Monday, Canadian-based military analyst Houshang Hassanyari and German-based political analyst Ali Sadrzadeh, both Iranian-born, stated on Iran International TV that the Islamic Republic appears to be preparing for war against Israel. Both analysts agreed that Iranian officials and military commanders' claims about the country's military capabilities are based on illusion rather than reality.
Hassanyari warned that "the Islamic Republic is under a dangerous illusion. Khamenei believes his forces can defend Iran and deliver heavy blows to Israeli and US forces. Even if he is not actively planning a war against Israel, his rhetoric is pushing Iran toward one."
He added that Iran lacks strong military capabilities and is destined for a major defeat in any war. If a conflict with Israel breaks out, the United States will undoubtedly intervene to support Israel.
Sadrzadeh, however, expressed skepticism about the likelihood of war. "I do not believe Iran is preparing for a war with Israel, as its commanders and top officials must have at least a basic understanding of their forces' limitations. US officials say Iran has no effective air defense, and as far as I know, Tehran no longer has allies or strategic depth in the Middle East."
He also noted that the situation has changed since the Iran-Iraq war of the 1980s. Given the protests in Iran in recent years, it is inconceivable that Iranians would rally behind Khamenei’s idea of war against Israel.
The rial has depreciated by approximately 50% against the US dollar since September, a sharp decline that is expected to further drive up Iran’s already high inflation by increasing the cost of both domestic production and imports.
Iran’s hardliner-dominated parliament (Majles) appears determined to impeach Economy Minister Abdolnasser Hemmati and push Pezeshkian to dismiss Central Bank Governor Alireza Farzin. Energy Minister Aliabadi is also on the impeachment list, facing scrutiny over his ministry’s failure to secure adequate fuel for power plants during the winter months.
Amid Supreme Leader Ali Khamenei’s repeated calls for unity within the government and his criticism of discord between the president and parliament, lawmakers held a closed-door meeting on Tuesday to brief Pezeshkian on the rial’s depreciation—despite the president already being well aware of the deeper causes of Iran’s chronic economic crisis.
“The Majles has vowed to hasten Hemmati’s impeachment if he and Pezeshkian fail to convince parliament that they are taking effective action to address the crisis and improve people’s livelihoods,” Iranian media quoted parliamentary officials as saying on Monday.
Media outlets in Tehran, including Khabar Online, reported that while the primary reasons for the motions against Aliabadi and Farzin are power shortages and rising exchange rates, respectively, some in parliament may also be pushing for their removal due to their ties to former President Ebrahim Raisi’s administration.
Pezeshkian has faced repeated criticism from the media for reinstating officials from the previous government. Given this, it is easy to conclude that he might not oppose their dismissal, as it could help project the appearance of the much-sought "change" in his administration.
However, Hemmati presents a different challenge. His outspoken approach, as demonstrated in the past, has the potential to create problems for both parliament and the president. During Raisi’s three-year tenure, he frequently criticized the government's economic performance, making him a persistent and vocal opponent.
Analysts and commentators in Iran have long argued that chronic inflation and declining economic indicators stem from US sanctions imposed since 2018 and the state-controlled nature of the economy. While officials occasionally attribute economic hardships to sanctions, they more often emphasize Iran’s ability to circumvent them through innovative measures. Less frequently discussed, however, is the country’s unique and intertwined political-economic system, which fosters monopolies and enables corruption among insiders.
Regarding Aliabadi’s case, Pezeshkian has acknowledged that he himself bears responsibility for the fuel and power shortages, admitting to mistakes in assessing the issue.
Hemmati, meanwhile, has partly attributed the rial’s decline to "regional developments." However, according to Khabar Online, most Iranian media outlets place the blame on Pezeshkian and his appointment of ultraconservatives to key positions as the main drivers of the country’s financial and energy crises.
The Rouydad24 website has noted that Trump's return to power has intensified Iran’s economic crisis. It reported that his renewed threats of "maximum pressure" on Tehran have contributed to rising exchange rates and soaring gold prices in the Iranian market.
Fathollah Tavassoli, a member of the Majles economic committee, insisted that "those pushing for Hemmati’s impeachment are independent MPs" and that the move is not driven by political or factional motives. However, another lawmaker, Mohammad Mehdi Shahryari, countered that "hardliners are pressuring independent MPs to support the impeachment motion."
So far, 89 lawmakers out of 290 have signed the motion—far exceeding the 10 signatures required for the Majles presidium to proceed with impeachment.