The pharmaceutical market in Iraq is among the fastest growing markets in the Middle East. Many international and regional pharmaceutical companies see it as a viable area for growth. However, this potential comes with its own set of difficulties. Such as: logistics, regulations, registration, financial management, compliance, as well as human resource management; not to mention the security issues.
Growth Potential In Iraq Pharmaceutical Market
The pharmaceutical market in Iraq is projected to be valued between $3 and $4 billion, with an upward trend expected in the future years. These forecasts are a result of the increasing demand for pharmaceutical products due to the rapidly increasing population (About 40 Million as of 2021). As we start seeing more and more availability of well educated clinical practitioners; the market has comparatively high to moderate purchasing power. This expansion is relative to the availability of professional resources (about 3000 pharmacists graduate each year); and, a reasonably high MOH budget allocated to pharmaceuticals and medical equipment for the public sector.
Challenges
Local and multinational pharmaceutical businesses, on the other hand, confront a number of obstacles that will influence the shape of their presence in Iraq. Exceptional precautions must be taken in order to operate in a safe, compliant, and efficient way that is consistent with the company’s international standards and reputation.
Corruption, smuggling, political unrest, security concerns, and poor healthcare infrastructure are some of the issues to be considered. They can also play a major role in shaping the business model of the company. For instance, international companies tend not to establish an operational direct legal entity. Alternatively, they run the business through a well-controlled distribution channel; Or, hire a third-party representative. Some international companies due to the mentioned issues decided to halt all operations and exit the market.
Iraq Pharmaceutical Market Structure
The pharmaceutical market in Iraq consists of the private sector, which is driven by the contribution of international companies and their representative local distributors. As for the public sector, it is led by the state company for marketing drugs and medical appliances (KIMADIA). Experts say that “with increasing capacity, the private market will be able to dominate the majority of the country’s pharmaceutical needs; and even supply the shrinking public sector.”
Market Volume
According to a World Bank report, Iraq’s GDP in 2019 was $200 billion, making it one of the top global economies that is 85 percent dependent on oil exports. The health sector accounts for 4.5 percent of the country’s total GDP. The MOH has registered 8,600 trade drugs, and Iraq has 28 national pharmaceutical companies. Iraq’s pharmaceutical market is currently worth around $3-4 billion; according to Business Monitor International, the Iraqi pharmaceutical market is growing at a rate of about 10 to 15 percent per year.
Iraq Pharmaceutical Market Development
According to reports, the health sector grew by about 30% in 2019, and this trend is likely to continue in the coming years. Supported by the MOH’s ambitious plans to develop the health sector by establishing the following:
- A more reliable regulatory framework
- Facilitating international investments
- Implementing more effective governing practices
An increasing number of global corporate entities were encouraged to enter the market. Economists anticipating a rapid growth in the coming years since this market is still young and underutilized. Besides, growing consumer awareness of high quality branded products has resulted in increased demand for international products.
International companies and based on their experiences in the Iraqi market tend to place their staff on the ground through their local partners. This practice by experience is far more efficient than those companies that directly run their operations in Iraq remotely. Those companies who work with local partners were able to seize opportunities to expand effectively in the market with compliance.
In Conclusion
Despite adverse operating conditions, pharmaceutical and healthcare expenditure in Iraq will continue to rise due to strong and underlying demand for medical treatments. International companies from all around the world are willing to invest in Iraq. In turn, It shows that investors are willing to see past the notion of Iraq as a risky environment to do business. Profitable advancements in the pharmaceutical business, as well as security enhancements, are strengthening investors confidence.
If you have any more questions about the Pharmaceutical market, how to establish your business, or how to manage your human resources in Iraq, please give us a call and our experts will be happy to assist you. We are providing our HR smart solutions to international and local pharmaceutical companies across Iraq
