Saeed Hojjari, CEO of DPPC, stated during the panel discussion titled “The Pharmaceutical System in the Post-War Era” that the sustainability of pharmaceutical production depends primarily on timely and reliable access to foreign currency, while also highlighting liquidity shortages and administrative complexities as major challenges facing the industry.
The following is a summary of his remarks:
🔹 “Two issues must be clearly distinguished: the exchange rate itself and access to foreign currency. Last year, despite foreign currency allocations being approved, the industry’s substantial liquidity requirements and lengthy financing cycles meant that the necessary funds were often unavailable when needed. This significantly affected production planning. Purchase orders were registered and placed in the allocation queue, but the subsequent stages—including approval by the relevant authorities, submission to the Central Bank, and final transfer to commercial banks—were highly time-consuming. These delays disrupted production schedules and reduced operational efficiency. Therefore, reliable and timely access to foreign currency is even more critical than the exchange rate itself. Manufacturers need confidence that the allocated currency will be available precisely when required.”
🔹 “Following the implementation of the Darouyar Plan in 2022, the official exchange rate increased from IRR 4,200 to IRR 285,000 per U.S. dollar. Some pharmaceutical companies are still dealing with the financial consequences of that policy. For example, companies that had purchased raw materials using the previous exchange rate found that, by the time their shipments reached customs, the Darouyar Plan had taken effect, requiring them to pay the exchange-rate differential to the banks. As a result, their costs increased nearly sevenfold, while neither their liquidity nor access to bank financing expanded proportionately.”
🔹 “The Food and Drug Administration has recently informed pharmaceutical companies that banking facilities will be made available. However, given the liberalization of exchange rates and current market conditions, companies require substantial working capital, while banks’ restrictive lending policies have made access to financing increasingly difficult.”
🔹 “Although the industry has faced challenges in foreign currency allocation, companies have managed to maintain operations by relying on their capabilities, production capacity, and diversified product portfolios. Nevertheless, the sudden removal of subsidized foreign currency would create serious liquidity constraints for many manufacturers, forcing them to narrow their product portfolios and concentrate on fewer products. Production capacity exists, but financial limitations prevent companies from utilizing it fully.”
🔹 “In recent years, even under the preferential exchange-rate system, production costs have consistently risen faster than government-approved medicine prices. The widening gap between actual production costs and regulated prices has placed considerable financial pressure on pharmaceutical manufacturers.”
🔹 “During times of conflict, administrative procedures must be streamlined. In addition to the Food and Drug Administration, other relevant organizations—including the Ministry of Industry, Mine and Trade and the Customs Administration—should recognize the extraordinary circumstances, strengthen coordination, and accelerate their procedures.”
🔹 “Effective coordination among policymaking institutions is indispensable. Every component of the pharmaceutical supply chain—from raw material manufacturers to pharmacies—is not only an economic enterprise but also a key contributor to safeguarding public health. Therefore, a more integrated governmental approach and stronger inter-agency coordination are essential to ensuring that medicines, as a strategic commodity, receive the priority they require.”
