DAVOS/LONDON (Reuters) - Danish drugmaker Novo Nordisk, the world’s top insulin supplier, expects to be ahead of the pack now nuclear sanctions are lifted in Iran, thanks to a continuous presence and a pre-emptive investment plan.
The country is an attractive target for Big Pharma seeking to sell new medicines to its large and growing population, but going in at ground level and securing good relations with authorities will be key, industry executives say.
Medicines were an exception in the nuclear sanctions imposed on Iran, thanks to exemptions for essential drugs and other humanitarian goods. Yet shipping drugs into the country was far from trouble-free, due to tight curbs on financial transactions and restrictions on technology reaching the Islamic republic.
“With the sanctions being lifted, we can operate more freely,” Jakob Riis, Novo’s head of marketing told Reuters at the World Economic Forum in Davos, Switzerland.
The Danish company has maintained a staff of around 130 in Iran through the sanctions era and it now plans to more than double that, adding 160 additional staff, following a decision in September to invest 70 million euros ($76 million) on a factory in the country.
“Novo has been there throughout. Now there are a lot of companies lining up to get into Iran and I think we are going to benefit from having been there for a while,” Riis said.
Iran is a potentially lucrative market of around 80 million consumers, ripe to be tapped by drugmakers and many other industries.
Other drugmakers are actively pursuing the opportunity.
“It’s a significant country,” said Christophe Weber, CEO of Takeda, Japan’s biggest drugmaker. “We have a team assessing the situation.” The CEO of another of the world’s top drugmakers told Reuters his company would look to invest in local manufacturing in Iran as a way to open up the market and satisfy Tehran’s likely desire for technology transfer.
Also ahead of the curve, Indian generics maker Cipla set up a manufacturing plant in Iran in 2014.
Iran’s well-educated labor force would likely lure global pharmaceutical firms interested in setting up research facilities or manufacturing plants, said Richard Bergstrom, director general of the European Federation of Pharmaceutical Industries and Associations.
“Iran is a very interesting market from a commercial perspective,” he said. “I know of a few companies that will now look at investment opportunities there.”
Yet a World Health Organization (WHO) consultant who visited Iran under sanctions said it drew well on its domestic resources and became almost self-sufficient in generic drugs - something it should remember when the Big Pharma sales forces come knocking.
“Iran has a very well developed pharmaceutical industry which is largely self-sufficient,” said Hans Hogerzeil, a professor of Global Health at Groningen University and the WHO’s former head of essential medicines.
“It’s very much a generic industry and they have a very strong generic prescription policy,” he said. “So when you look at availability of medicines they actually managed quite well despite the sanctions.”
Editing by Anna Willard