This research paper analyses the determining factors in the development of Iran's pharmaceutical market, which was favoured by economic reforms and the economic boom caused by globalisation since the 1990s. In addition to a detailed analysis of the structure of the Iranian pharmaceutical market and of the industrial and commercial policies applied to this sector, this research includes an empirical application that aims to identify the determinants of the evolution of the market between the years 2000 and 2017. For this, a multivariate model is used, complemented by the method of the Impulse Response Function. The results indicate that, in Iran, foreign currency from oil revenues continues to be an essential determinant in the development of the domestic industry and the importation of high-cost products during our study period. On the other hand, we corroborated that, although social expenditures tried to sustain the market during the period of application of the sanctions imposed on Iran, the market shows signs of vulnerability to shock and the fall of imports due to difficulties in trade. Finally conclude that the non-oil exports which have been increasing during the period of study are the new sources of foreign exchanges for imports of medicines.
Table of Contents
1. INTRODUCTION
2. AN OVERVIEW OF PHARMACEUTICAL POLICIES IN DEVELOPING COUNTRIES
3. PHARMACEUTICAL INDUSTRY AND MARKET IN IRAN: EVOLUTION AND STRUCTURE
3.1. Evolution of the pharmaceutical market: industrial policies and changes in domestic production
3.2. Trade policies: effect on the import of medicines
3.3. Industrial organisation of the Iranian pharmaceutical sector: structure and concentration
4. DETERMINANTS IN THE IRANIAN PHARMACEUTICAL MARKET: A QUANTITATIVE TEST
4.1. Background and hypothesis
4.2. Method and definition of variables
4.3. Results
5. CONCLUSIONS
6. REFERENCES
Research Objectives and Key Topics
This thesis examines the key factors influencing the development of Iran's pharmaceutical market between 2000 and 2017, specifically analyzing how macroeconomic variables, such as oil revenues and government subsidies, interact with domestic production and imports amidst economic volatility and international sanctions.
- The impact of oil revenue volatility on pharmaceutical industry growth.
- Evaluation of industrial and trade policies in shaping market structure.
- Analysis of the relationship between pharmaceutical subsidies, domestic production, and imports.
- The role of non-oil exports as a diversification strategy for medical imports.
- Quantifying market concentration using Herfindahl-Hirschman index benchmarks.
- Assessment of the economic shock caused by international sanctions on the pharmaceutical supply chain.
Excerpt from the Thesis
3.3. Industrial organisation of the Iranian pharmaceutical sector: structure and concentration
According to article 43 of the Constitution of the Islamic Republic of Iran, the government provides the basic needs of the population, such as healthcare, which includes basic pharmaceutical needs.
Perhaps the most important article on the delimitation between the public and private sector is article 44: The economic system of R.I. Iran is based on three sectors: public, private and cooperative, with central planning. The public sector includes all major industries, parent industries, foreign trade, large mines, banking, insurance, energy supply, dams and extensive networks for water, radio and television, mail, telegraph and telephone, aviation, maritime transport, railroads and the like, which are publicly owned and owned by the government. The private sector includes agriculture, livestock, industry, commerce and services activities, which complement the economic and cooperative activities of the State.
As seen previously, the liberalising reforms began in the 90s (and in 2006 it enters the constitution) and to implement or regulate them; different five-year development plans were introduced. The Organization for the Privatisation of Iran (IPO) assumes among other objectives the acceleration of economic growth, the expansion of private property for greater social justice, the improvement of business performance, technology and employment, the elimination of monopolies and reducing the size of the State. According to the IPO, throughout the five-year programs, up to 80% of industries (except parent industries) should be subject through the stock market to the private and non-state sectors.
These changes in economic regulation have also affected the pharmaceutical industry. Although industrial reforms, in general, have not moved towards the desired point, some researchers believe that the structure of the pharmaceutical market has been transformed into an open oligopoly.
Summary of Chapters
1. INTRODUCTION: Outlines the significance of the pharmaceutical sector in middle-income economies like Iran, highlighting the reliance on petrodollars and the need for sector diversification.
2. AN OVERVIEW OF PHARMACEUTICAL POLICIES IN DEVELOPING COUNTRIES: Explores theoretical frameworks of industrial and trade policies, emphasizing the common limitations in R&D and access to technology in developing nations.
3. PHARMACEUTICAL INDUSTRY AND MARKET IN IRAN: EVOLUTION AND STRUCTURE: Describes the historical development of the Iranian pharmaceutical base, detailing specific industrial reforms, trade policies, and the complex ownership structure of the sector.
4. DETERMINANTS IN THE IRANIAN PHARMACEUTICAL MARKET: A QUANTITATIVE TEST: Presents an empirical model using OLS regression and Impulse Response Functions to determine the macroeconomic factors influencing drug production and import volumes.
5. CONCLUSIONS: Summarizes the study's findings, affirming oil revenue as a primary driver of the market and discussing the resilience of the pharmaceutical system under external economic shocks.
6. REFERENCES: Provides a comprehensive list of all academic, institutional, and statistical sources utilized in the research.
Keywords
Iran, Pharmaceutical market, Pharmaceutical industry, Oil revenues, Economic sanctions, Trade policies, Generic drugs, Industrial organization, Market concentration, Healthcare expenditure, Economic diversification, Subsidy policy, Macroeconomic determinants, Importation, Domestic production.
Frequently Asked Questions
What is the primary focus of this research?
The research analyzes the determinants of the evolution of the pharmaceutical market in Iran from 2000 to 2017, examining how macroeconomic factors, policy changes, and sanctions impacted industry development.
Which central topics are discussed in the work?
Key topics include the role of oil and gas revenues, the implementation of industrial and trade reforms, the impact of international sanctions, and the structural transition toward an open oligopoly.
What is the core research objective?
The main objective is to identify the macroeconomic factors that determined the growth and fluctuation in domestic drug production and medical imports during the study period.
What scientific methods were employed?
The study utilizes an empirical quantitative approach using Ordinary Least Squares (OLS) regression and Cholesky's Impulse Response Function (IRF) based on a Vector Autoregression (VAR) model.
What is covered in the main body of the text?
The main body examines historical policies since the 1990s, the evolution of market structure, the impact of various Five-Year Development Plans, and a detailed quantitative analysis of production and import drivers.
Which keywords best characterize this work?
Relevant keywords include Iran, Pharmaceutical market, Oil revenues, Economic sanctions, Industrial organization, and Market concentration.
How do oil revenues specifically affect the Iranian pharmaceutical market?
The study finds that oil revenues act as the primary determinant for the sector's evolution, serving as the main driver for industrial growth and funding for medicine imports.
What role do sanctions play in the pharmaceutical supply chain?
Sanctions are identified as an exogenous shock that caused currency devaluation and banking obstacles, creating difficulties in importing critical medicines, although the sector demonstrated a degree of resilience.
- Citar trabajo
- Mohsen Vahedi (Autor), 2020, Determinants of the evolution of the pharmaceutical market in Iran for the period 2000-2017, Múnich, GRIN Verlag, https://www.grin.com/document/920602
