Market Entry Report Sample

REPORT
Market Entry Iran Healthcare Market2016
Mordor Intelligence
+1 617-765-2493 | No. 30 Padma Nilaya, RT Nagar, Bengaluru, India 560 032 | info@mordorintelligence.com
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TABLE OF CONTENTS
1. INTRODUCTION.............................................................................................................................................................. 1
1.1 SCOPE OF THE REPORT ........................................................................................................................................ 1
1.2 REGIONAL ANALYSIS............................................................................................................................................. 1
1.2.1 PESTLE ANALYSIS .......................................................................................................................................... 1
1.2.2 ANALYSIS OF EASE OF DOING BUSINESS .................................................................................................. 3
2 MARKET DYNAMICS ...................................................................................................................................................... 5
2.1 DRIVERS ................................................................................................................................................................... 5
2.1.1 GAPS IN DELIVERY OF SPECIALIZED MEDICINE AND EQUIPMENT ....................................................... 5
2.1.2 INCREASING FOCUS ON UNIVERSAL HEALTHCARE ................................................................................ 6
2.2 RESTRAINTS ........................................................................................................................................................... 7
2.2.1 IRANS CURRENCY WOES .............................................................................................................................. 7
2.2.2 DRUG REIMBURSEMENT ISSUES ................................................................................................................. 8
2.3 OPPORTUNITIES ..................................................................................................................................................... 9
2.3.1 GROWING MEDICAL TOURISM MARKET ..................................................................................................... 9
3 MARKET DEMAND ANALYSIS ....................................................................................................................................10
3.1 SOCIO-ECONOMIC SEGMENTATION ..................................................................................................................10
3.2 DEMOGRAPHIC STRENGTHS & WEAKNESSES ...............................................................................................11
3.3 SPENDING PATTERNS.........................................................................................................................................11
3.4 TARGET MARKET IDENTIFICATION ..................................................................................................................12
4 MARKET SIZE OF IRAN HEALTHCARE INDUSTRY BY TYPE (USD MILLIONS) ...................................................13
4.1 HEALTHCARE SERVICES .....................................................................................................................................13
4.1.1 DOMESTIC PATIENTS OVERVIEW ..............................................................................................................14
4.1.2 MEDICAL TOURISM OVERVIEW ..................................................................................................................15
Market Entry: Healthcare Market in Iran
2016 Mordor Intelligence

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4.2 PHARMACEUTICALS ............................................................................................................................................16

4.3 MEDICAL DEVICES ................................................................................................................................................18
5 MARKET ENTRY ...........................................................................................................................................................19
5.1 MARKET ENTRY: THE STRATEGY .....................................................................................................................19
5.1.1 TYPES OF ENTRY MODES, BY MARKET ENTRY OBJECTIVES ..............................................................19
5.1.2 COMPETITION ANALYSIS ............................................................................................................................19
5.1.2.1 MARKET SHARE ANALYSIS .................................................................................................................20
5.1.2.2 STRATEGIES ADOPTED, RECENT EVENTS .......................................................................................21
5.1.3 PRICING STRATEGY .....................................................................................................................................22
5.1.4 SUPPLY CHAIN ANALYSIS...........................................................................................................................23
5.1.4.1 TRADE (IMPORT-EXPORT ANALYSIS)................................................................................................23
5.1.4.2 DISTRIBUTION NETWORK & RETAIL ANALYSIS ..............................................................................23
5.2 MARKET ENTRY: THE ADMINISTRATION .........................................................................................................24
5.2.1 HOW TO REGISTER A COMPANY (FLOWCHART) ....................................................................................24
5.2.2 REGISTRATION PROCESSED ......................................................................................................................25
5.2.2.1 MINISTRIES INVOLVED ........................................................................................................................27
5.2.2.2 CRITERIA AND CONDITIONS................................................................................................................27
5.2.3 LIST OF FORMS & DOCUMENTS .................................................................................................................29
5.2.4 PRODUCT CONTROL GUIDELINES SPECIFIED BY THE GOVERNMENT ...............................................29
6 SOURCES .......................................................................................................................................................................30
7 DISCLAIMER ..................................................................................................................................................................31

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1. INTRODUCTION
1.1 SCOPE OF THE REPORT
The market entry series offers an overview of how to enter a particular market, customized for a particular
geographical region. The report details political, economic, legal, and other risks that you need to be cognizant
of while entering a particular market. Here, we break down the complex process of entering a market into
steps, delineating the time and monetary outlay for each step, competition analysis (key market players,
market share analysis in the market and its sub segments), and other critical elements, which are critical when
you decide to enter a market or are in the process of market entry.
1.2 REGIONAL ANALYSIS

1.2.1 PESTLE ANALYSIS
Political
The political scenario in Iran hints at a high level of
incumbent risk to almost all major industries.
Economic
1. Irans
economy,
as
well
as
employment distribution is heavily
1. High levels of red rape
dependent
2. Risk of snap back or reinstatement of sanctions,
extractions. Low oil prices, owing to
given the complex roadmap in the nuclear sector
the slowdown of Chinese imports and
specified by other global states, exposing
global demand is likely to affect the oil
investors
industry in Iran
3. Residual sanctions may negatively impact project

finance and delay
4. Irans perfectionist approach may dampen
investor sentiment
on
oil
and
mineral
2. The inflow of Iranian oil in the already

oversupplied
global
market
is
expected to further affect oil prices

adversely
5. High bureaucratic interference, opaque ownership
3. The low oil prices can affect the
structures and powerful Iranian lobbies, which
profitability of Iranian firms, thereby
can affect the competition in the market
limiting employment opportunities in

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6. Regional geopolitical environment unstable;
the nation. This in turn, will affect the
growing tensions between KSA and Iran in the
spending power allocated on health at
Persian Gulf
both the state and household level
7. ISISs base camp in the region

Social
The societal fabric of Iran is sound and there is little
Technological
1. Iran has well-rounded, self-sufficient
chance of societal conflict in the nation. However, cultural
infrastructure,
especially
limitations and the conservative outlook of the people and
pharmaceuticals
and
the government toward the influence of foreign
However, many key industries like
investment in Iran may hamper prospects for healthcare.
biopharmaceuticals, medical devices,
for
healthcare.
etc. have not been able to develop,

owing to limitations in access to
technology and information, as both
direct and indirect results of sanctions
imposed.
Environmental
Legal
Iran suffers from severe social and economic damages, An unfamiliar regulatory and legal regime that
owing to seismic activities within its territory. Many cities lacks transparency, complicated regulations,
including Tehran, Manjil, Tabas, Tabriz, Rudbar Lar, Qazvin, and the challenge of finding good business
Hamedan Zanjan, Kermanshah, and Fars have sustained partners are some of the risks faced. The labor
extensive damages due to high magnitude earthquakes. law in Iran is employee-friendly and this makes
The role of the Ministry of Housing and Urban it particularly difficult to lay off staff.
Development and its associated Housing Foundation is Employing personnel on consecutive siximportant, as these are the two chief organizations for the month contracts is illegal, so is dismissing
approval and execution of special plans, housing ventures staff without proof of serious offence. Labor
and building codes, including earthquake mandatory disputes are settled by a special labor council,
codes.
which generally rules in favor of the employee.

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1.2.2 ANALYSIS OF EASE OF DOING BUSINESS

Categories
2016 Rank
2015 Rank
118
119
Remarks
The
Business
Environment
Since the last review (2015), the country has streamlined the
name reservation and company registration processes. In the
Starting a
Business
87
82
DB review of 2013, the prerequisite of a criminal record

clearance was identified as a factor severely undermining the
ease of starting a business. As of 2011, a web portal was set
up to expedite searching for a unique company in the country.
"The building quality control index is the sum of the
scores on the quality of building regulations, quality
control
Dealing with
Construction
69
98
Permits
before
construction,
construction,
quality
liability
insurance
and
quality
control
control
after
regimes,
and
during
construction,
professional
certifications indices". In Iran's case, increase in quality of

deliverables across underlying factors is responsible for a
positive change in ranking.
Getting
Electricity
"The Islamic Republic of Iran made getting electricity easier by

88
94
eliminating the need for customers to obtain an excavation

permit for electricity connection works."
Information was collected using interviews with local property
Registering
Property
91
89
lawyers, property registries, and notaries. Number of

procedures: 7, Number of days: 12, Cost: 6.10% of the property
value

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Categories
Getting
Credit
2016 Rank
2015 Rank
Establishment of a new private credit bureau improved access

97
90
to information. However, other comparative factors pulled the

score down.
Protecting
Minority
Remarks
Despite a lowered rank, improvements have been made: a

150
149
Investors
prerequisite for immediate disclosure of related party

transactions increased investor protection
On average, firms made 20 tax payments per annum, spending
Paying
Taxes
123
122
344 work hours filing, preparing and paying taxes. Total of

taxes amounted to 44.10% of profit. Corporate income tax and
property transfer tax are the two largest segments.
Trading
across
167
166
Borders
A downward slip in the ranking is because of comparative

ratings
While the ranking has not changed, processes have been
Enforcing
Contracts
62
62
expedited by way of introduction of electronic filing of some

documents, text message notification and an electronic case
management system
Resolving insolvency takes, on an average, 4.5 years, and costs
Resolving
Insolvency
140
137
15% of the debtors estate. The most likely outcome was that
the company was sold as piecemeal sale. The average
recovery rate is 18 cents per dollar.

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2 MARKET DYNAMICS
2.1 DRIVERS
2.1.1 GAPS IN DELIVERY OF SPECIALIZED MEDICINE AND EQUIPMENT
Iran has a successful public health delivery system. The country provides primary care to all its citizens
through access to Primary Healthcare Networks. The next challenge that the Iranian Government is tackling
is the higher inclusion of its population. This attempt is supplemented by a focus on expanding healthcare
facilities and access to such facilities. The number of public hospitals, hospital beds, doctors, medical
laboratories and clinics are all being increased, along with the GDP outlay for healthcare (to 6.7%). However,
Iran lags behind in the next wave of innovation in medicine and healthcare, being exempted from access to
software, technology, research and other global medical advances. In fact, the country is ranked the 7th least
attractive market for medical devices in the MENA region. Hence, the market is ripe for developments in the
sector of biomedicine, medical devices, pharmaceuticals, and others. The lifting of sanctions is expected to
boost the demand for foreign medical equipment, and FDI is expected to play a major role in the development
of the Iranian healthcare sector.
Iran: Medical Devices Import

700
683
672
680
660
640
620
600
600
586
582
580
560
540
520
2010
2011
2012
2013
2014
Medical Device Imports (USD million)
Source: Mordor Intelligence Analysis

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2.1.2 INCREASING FOCUS ON UNIVERSAL HEALTHCARE

Iran has fared extremely well on the healthcare front, despite rigid sanctions. Healthcare and medical services
in Iran date back to the times of Hakims, the AviSinas and Razis, an era where Iran was considered to be a
pioneer in medicine in the world. The high standard of healthcare is still evident in country. According to the
Article 29 of the constitution, medical coverage and treatment is a public right, which has led to a strong focus
on public access to universal healthcare. The current healthcare setup of the government covers nearly 80%
of the Iranian population.
The Ministry of Health and Medical Education provides Iranians basic healthcare facilities, subsidized
prescription drugs and conducts routine vaccination programs. The new health plan, passed in 2014, covered
around 90% of the patients medical bills in public hospitals. Many other provisions have been made for
healthcare facilities in rural areas.
Setups like primary healthcare networks and skilled technicians, training and serving the people of their
hometowns, has ensured that most of the population receives basic medical facilities. With the lifting of
nuclear sanctions, Iran plans to expand its healthcare services and ensure proper quality healthcare services
to all. This will require new hospitals with high quality infrastructure, an increase in the number of beds, the
availability of skilled labor, and smart technologies.
Healthcare spending as a % of GDP

7.2
7.12
7.1
6.98
6.89
6.9
6.8
6.7
6.6
6.49
6.5
6.4
6.3
6.2
6.1
2011
2012
2013
2014
% of GDP
Source: Global Economy website, Mordor Intelligence Analysis

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2.2 RESTRAINTS
2.2.1 IRANS CURRENCY WOES
Iranian healthcare devices market is highly import-dependent, with most imports coming in from the European
Union. This has resulted in an increase in foreign trade in the country. While the proportion of investment has
increased considerably, with nearly 31% in general healthcare and 35.4% in pharmaceuticals, the depreciation
of the Iranian Rial has been causing problems to the Iranian system, resulting in reduced import value. Iran
also received a lower appraisal score on the business front, which made it fall to as low as number 22 in the
rankings in the Middle East and Africa market. This situation, along with financial restrictions, has been
causing problems to the Iranian healthcare system.
Iranian Riyal-USD Exchange Rate

35000
30000
30000
25000
25000
27000
20000
15000
11000
13000
10000
5000
0
2011
2012
2013
2014
2015
USD/IRR

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2.2.2 DRUG REIMBURSEMENT ISSUES

Iran has a systematic protocol for the assessment, appraisal and approval of drug reimbursements. The two
most important organizations involved in the process are the Food and Drug Administration and the Supreme
Council of Health Insurance, which takes care of the process. Reimbursed drugs in Iran account for 53.5% of
all the drugs available and account for nearly 77% of drug expenditures. The system has its own benefits.
However, it also has its own share of issues. It has been observed that the system faces issues ranging from
stakeholder claims, prolonged decision making bodies, limited access to the decision making information and
severe rigidity in the assessment process. Iranian policymakers are advised to consider ways to rectify these
issues by following different case studies and policies being followed by other international countries, to make
it a smooth flowing system.
Share of Reimbursed Drugs
Reimbursed Drugs
53.50%

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2.3 OPPORTUNITIES
2.3.1 GROWING MEDICAL TOURISM MARKET
The WHO estimates the global medical tourism market at more than USD 100 billion. Although, a relatively
new concept, medical tourism in Iran is booming, and Iran is one of the most attractive medical tourism
destinations across the globe, owing to several factors. Irans geographical location makes it an approachable
destination to most Middle Eastern nations. Up to 15 of Irans neighbors have an inferior market for medical
devices. Moreover, Iran imports 90% of its medical devices from Europe and other countries. Combined with
exchange rate fluctuations, this offers people in the country access to well more than 200 million by way of
regional target audience, who can now access the countrys well-developed medical infrastructure accessible.
Most medical tourists belong to neighboring nations such as Azerbaijan, Iraq and the Persian Gulf countries.
Earlier, barriers like the availability of a skilled workforce, coupled with challenges in acquiring VISA access to
the country undermined the countrys medical tourism prospects. With a lift in the sanctions, Irans medical
tourism market is ripe for entry.
Table: Various wellness related health services provided to medical tourists in Iran
Surgical Treatments
Cosmetic Surgery
Orthopedic
Heat
Dialysis
Plastic surgery
Rheumatism
Skin health services
Rehabilitation
Weight loss
Neurology
Skin diseases
Pain management
Psoriasis
Limited Treatments
Lasik surgery
Diet therapy
Eye diseases
Source: Ministry of Health and Education, Mordor Intelligence Analysis

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3 MARKET DEMAND ANALYSIS

3.1 SOCIO-ECONOMIC SEGMENTATION
Iran is home to three major socio-economic classes: the upper class, middle class and lower class. According
to this categorization, the ruling or upper class owns and controls major part of the means of production,
along with controlling the labor power of others. The middle class makes up people who have regular jobs and
income, and can allot at least one-third of their disposable income to optional spending on food, shelter and
other essentials. The lower class consists of people employed as wage workers for the ruling class, and other
poor, unemployed, self-employed and alienated youth.
73% of the population in Iran resides in urban areas. Tehran is Irans largest city, and has a population close
to 8.4 million. Other major include Isfahan, Ahvaz, Qom, Mashhad, Karaj among others. Irans refugee
population is one of the largest in the world, with refugees mostly coming from Iraq and Afghanistan.
Around 90% to 95% of the population in Iran practices Islam. Christians, Bah's, Zoroastrians and a few others
make up the remaining religious groups.

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3.2 DEMOGRAPHIC STRENGTHS & WEAKNESSES

Parameter
Population
Values
81.8 million
0-14 years: 23.69%
Age structure
15-24 years: 17.58%

25-54 years: 46.87%
55-64 years: 6.58%
65 years and over: 5.28%
Sex ratio at birth
1.05 male(s)/female
Infant mortality rate total
38.04 deaths/1000 live births
Average life expectancy
71.15 years
Fertility rate
1.83 births/woman
Ethnic groups
Persian, Azeri, Kurd, Lur, Baloch, Arab, Turkmen and Turkic tribes
3.3 SPENDING PATTERNS

The traditional store-based purchase channels of chemists, pharmacies and drugstores have remained the
leading points of sale, owing to their reputation, and convenience of purchase. Although internet retailing is
finding its way into consumer health, Iranian consumers prefer to access and buy products through offline
platforms. However, the accessibility of online products is expected to make mobile applications popular
during the forecast period.
Iran is a resource rich upper middle income country. Results published by an Oxford study indicate that health
care has positive income elasticity in the country. Additionally, most estimates support the hypothesis that
health care is a necessity for people in urban and rural areas, as income elasticity corresponding to medical
services is fairly inelastic. It has also been observed that as income increases, the demand for health services
also increases.

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Primary, secondary and tertiary health services are provided by the public sector in the country. The focus and
emphasis of the government on primary health care over time has made the public sector the main provider
of primary health care services across Iran.
3.4 TARGET MARKET IDENTIFICATION

Iran produces 90% of its medicines and has set a target of self-sufficiency, which is a good achievement
considering the limitations. However, the problem of quality of the medicines available raises several
questions. Most local markets focus on producing generic medicine, hence there is massive undersupply of
specialized medicine. Moreover, the demand for specialized western medicine in immense in Iran, which
presents a tremendous opportunity for pharmaceutical companies all over the world.
In contrast to the case of medical devices, almost 9/10th of the

medical equipment is imported; in case of specialized
equipment, the situation is worse.
With Iran embarking on the Healthcare Modernization plan, there will be a considerable number of
opportunities in the Iranian healthcare sector in the future. This is backed by statistics, which have proven
that Iran prioritizes the health care industry and constant improvements and modernization plans are always
under consideration.
According to official statistics, more than 90% Iranians are covered by at least one type of health insurance.

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4 MARKET SIZE OF IRAN HEALTHCARE INDUSTRY BY TYPE (USD MILLIONS)

4.1 HEALTHCARE SERVICES
Table: Iran Healthcare Services Market in 2016 (in USD millions)
2016
2017
2018
2019
2020
2021
Note: Above data for representational purposes only

Domestic Patients Market Size: Left Axis
Medical Tourism Market Size: Right Axis
In the Iranian healthcare sector, the healthcare services market was estimated to be worth USD XX,XXX million
in 2016. The market is expected to record an estimated CAGR of X.X% between 2016-2021. This segment is
further subdivided into domestic patients and medical tourists, which grow at CAGRs X.X% and X.X%
respectively.

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4.1.1 DOMESTIC PATIENTS OVERVIEW

The Ministry of Health and Medical Education provides Iranians basic healthcare facilities, subsidized
prescription drugs and conducts routine vaccination programs. The new health plan passed in 2014 covered
up to 90% of the patients medical bills in public hospitals and many provisions have been made for healthcare
facilities in rural areas. According to the Iran Ministry of Healthcare and Medical Education, the infant mortality
rate, which was 92 in 1,000 live births, has come down to 15 in 1000 live births in 2012.
The government has divided the country into 13 hubs, three in Tehran and the rest in other provinces. Each
hub will have one PET scan and some type 2 & type 3 standard satellite centers.
There is a growing demand for imaging equipment. The

government estimates an investment of USD 280 million for
diagnostic imaging. There has also been a perpetual growth
of end-stage renal disease patients.
The country has 474 permanent hemodialysis centers, of which, more than 85% are public, and nearly 6% are
private; the remaining 9% are charitable organizations. Most dental services fall under the private sector.
Cardiovascular disorders account for nearly 45% of all deaths. Cancer cases are also increasing. Most cancerrelated deaths, were attributed to lung cancer.
Table: Number of In Patient services offered at Ministry of Health & Medical Education Hospitals
Year
Number of Patients
2014
7,127,641
2013
6,514,772
2012
6,267,202
Source: Iran Ministry of Health & Medical Education

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4.1.2 MEDICAL TOURISM OVERVIEW

Owing to the long sanctions imposed (which have been recently lifted) on Iran by the international community,
Iranians could not travel to other countries for medical treatment (owing to the Iranian governments
discouragement, who did not want citizens to provide business to any other countries, as a retribution to the
sanctions). This has led to the development of local healthcare industry, whose objective is to provide best
possible health services to their citizens. During this process, Iran could potentially develop one of the best
healthcare infrastructures in the Middle East. This, combined with the lower healthcare costs in Iran than other
countries like UAE, has led to an increased influx of medical tourists into the country. Most medical tourists
to Iran are from surrounding Middle East and CIS countries. This count has increased with time.
According to studies conducted by Iran tourism organization

(ICHHTO)- Iraq, Afghanistan, Persian Gulf states, Central
Asian nations and Iranians residing abroad, form the major
customer base.
ICHHTO provides travel agencies functional in the health tourism industry with special facilities, such as a
pavilion for them in overseas fairs, etc. ICHHTO has also specified certain provinces for health tourism with
the co-operation of the Ministry of Health:
Xxxxxx province for treating tuberculosis and lung disorders
Xxxxxxx for ophthalmology, skin care, heart surgery and orthopedics
Xxxxx for liver, kidney and marrow transplants
Xxxx for treating infertility
Xxxxx for its sun and desert potential
Xxxxx, Xxxxx and Xxxx as centers of herbal medicine

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4.2 PHARMACEUTICALS
Table: Iran Pharmaceuticals Services Market in 2016 (in USD millions)
2016
2017
2018
2019
2020
2021

The Iran pharmaceuticals market was worth USD X,XXX million in 2015, and is expected to reach USD X,XXX
million by the end of 2016. The pharmaceuticals market is expected to record a CAGR of X.X% over 20162021.
Irans pharmaceutical market consists of X,XXX registered drugs of which, X,XXX are prescription drugs and
XXXX OTC drugs. Iran has nearly XX pharmaceutical manufacturing companies, XXX pharma ingredientmanufacturing companies, XX distribution companies and more than XX,XXX pharmacies.
Iran has become the largest manufacturer of generic pharmaceuticals in the Middle East and North Africa.
Iran meets more than 85% of its domestic pharmaceutical requirements.
Irans pharmaceutical industry is quite old. Much of the improvement in implementing the Good Manufacturing
Practice (GMP) is yet to be achieved.

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The biotechnology product manufacturing industry in the

country is still at a nascent stage. Bio-similars, insulin,
vaccines, recombinant products and cancer drugs are
generally imported on large scale.
The current government is undertaking many initiatives to enable private players to develop biotechnology
products. The production of bio-pharmaceuticals for addressing life-threatening diseases has become a prime
focus area for the government. The high prices of the imported bio-pharmaceutical products and a lack of
local bio-similars manufacturing facilities, is turning out to be a challenge for the Iranian pharmaceutical
industry. Healthcare expenditure has increased rapidly over the past years, primarily because of the
expenditure on bio-pharmaceuticals.

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4.3 MEDICAL DEVICES

Table: Iran Medical Devices Market in 2016 (in USD millions)
6.00
5.61
5.25
4.91
4.60
4.30
2016
2017
2018
2019
2020
2021

The medical device market in Iran has been heavily reliant on imports and this trend is expected to remain the
same in near future. Even though the lifting of sanctions on Iran is a positive sign, its effect on the medical
device market is expected to be nominal. The main reason is that the Iranian medical devices market was
never really affected by sanctions, as the sanctions exempted life-saving drugs and medical devices, which in
turn permitted unrestricted import of these devices. However, the lifting of sanctions can have positive effects
resulting in increased FDI, which lead to the proliferation of medical device manufacturing in Iran. Despite this,
the huge growth in this industry cannot be expected as the Rial has been continuously depreciating against
the USD in the past few years, because of which even though the medical devices market increases has
increased in terms of the Rial, the effect might not be so visible in terms of USD. This can lead to the portrayal
of lower growth rate, if the market is depicted in USD Terms. However, the overall market is expected to record
consistent growth in the near future.
The Iranian medical devices market was estimated at USD XXX million in 2016, and is expected to reach a
market value of USD X,XXX million by 2021, projecting a CAGR of X.X% during the forecast period.

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5 MARKET ENTRY
5.1 MARKET ENTRY: THE STRATEGY
We delineate parameters that will ensure the best decisions taken when contemplating a market entry strategy
ideal for your interests. Indicators like ideal market entry modes by risk appetite, competition analysis across
(sub) segments, strategies adopted by your competitors, news/events, pricing strategy, overview of the supply
chain to help you inquire in the right places.
5.1.1 TYPES OF ENTRY MODES, BY MARKET ENTRY OBJECTIVES
Market entry in a new geography is decided primarily by the outcome expectations of the entity.
MARKET ENTRY STRATEGY EVALUATION
Learning in lead
markets
To leverage
technical
advantages
(patents, etc.)
by achieving
scale
To further expand
existing global
market footprint
Competition
based attack or
defence
New market
exploration due to
lucrative shortmid term gains
Export
Incentives
DESTINATION MARKET DUE

DILIGENCE
ENTRY MODE AND STRATEGY SELECTION

THROUGH CUSTOM MADE FRAMEWORKS
Local Operations
National
subsidiary
Co-selection of process
Market health and momentum
analysis
Verification of value proposition
and competitive advantage
Evaluation of sales pipeline
(importers, distributors, trading
houses, and their varying levels of
efficiency and accountability)
Evaluation of sales and marketing
personnel
Control
In order of decreasing market involvement
DETERMINING YOUR MARKET ENTRY

OBJECTIVES
Cooperation
Joint Ventures
Licensing
DATA INTEGRATION,
REPORT PREPARATION
Intelligent
Databases
Direct Exporting
Distributor
Franchising
Indirect Exporting
Trading Cos,
Piggyback
Risk
Analytical
Model
Bottom up
& Top
down
Estimation
The framework includes two primary decision

variables:
Government and industry regulations, and
Importing and distribution support infrastructure

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5.1.2 COMPETITION ANALYSIS

5.1.2.1 MARKET SHARE ANALYSIS
Pharmaceuticals
The following companies are market leaders in the pharmaceuticals market, which is fairly consolidated. The
top 5 companies make up more than 75% of the countrys pharmaceutical market.
Others
10%
Company C
20%
Company A
54%
Company B
16%

Medical Devices
These companies are market leaders in the medical device market, which primarily consists of imported
goods. Consequently, the market is fragmented. The top 5 companies represent less than 30% of the countrys
medical devices market.
Company A
9%
Company B
11%
Company C
16%
Others
64%

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5.1.2.2 STRATEGIES ADOPTED, RECENT EVENTS

Strategies Adopted
Operating through local distributors and partners: The most cost and time friendly way to enter the
pharmaceuticals market is to enter into a reliable partnership with local distributors.
Sticking to generic medicines: Generic versions of drugs are preferred for their low cost and their general
acceptability by the Iran pharmaceutical industry. Covering remote regions of Iran will be helpful toward
reaching an unserved market for pharmaceutical companies.
Recent Events
According to sources at the Ministry of Health and Medical Education, Iran, more than 60 companies
from all over the globe, have submitted their application to invest in Irans healthcare projects, and
also invest in the construction of hospitals in Iran. Companies like Samsung and Korean Daewoo are
on the verge of landing projects to construct excellent hospitals in Iran

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5.1.3 PRICING STRATEGY

The pricing strategy adopted by major players depends on the psychology of the target consumers. Because
the consumers are afflicted by a wide cross section of diseases, coming from both urban and rural residences,
with varying lifestyles (implying varying levels of inclusivity in parameters like sanitation & hygiene, and thus,
preventive healthcare measures), the cost of medical services varies across the demography.
Pharmaceuticals remain the most important and frequently used elements in healthcare delivery in Iran:
Pharmaceuticals are among the most essential and expensive elements in health care. The timely provision
of medicines new to the market, which are reasonably priced and financially covered by insurance
establishments and purchasing institutions, is one of the major concerns for health system policymakers.
Government controls pricing of pharmaceuticals to maintain affordability: Price is one of the most critical
bases for the inclusion of a particular drug in a list of drugs covered by insurance organizations in emerging
countries like Iran. As certain raw material and medical equipment is produced overseas, a rise in the exchange
rate has a considerable impact on the cost of drugs production. The government has however maintained
overall control in the area of pricing and quality assurance. The pharmaceutical industry is constrained by the
price control strategy enforced by the MOH&ME to keep the cost of pharmaceutical low and affordable.
Affordable remains the most effective outreach approach: An effective healthcare products pricing strategy
should accommodate for convenience, lower prices across categories, and quality healthcare access through
efficient tie-ups with private healthcare providers at secondary & tertiary care stages. In addition, they can
start prospective partnership with insurance companies to roll out affordable micro insurance options, which
are more accessible to the segment of the population (largely rural) which currently remains un-served.

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5.1.4 SUPPLY CHAIN ANALYSIS

Pharmaceutical supply chain
Hospitals
Domestic drug manufacturing
Drug
Imported drugs
Wholesalers
Patients
Drug stores

5.1.4.1 TRADE (IMPORT-EXPORT ANALYSIS)
Port Bandar Abbas and Chabahar port are the prominent trade points for pharmaceutical products and
medical equipment. Apart from the domestic manufacturing firms, there are many international companies
that either manufacture their products in the country domestically or export their products, which are then
distributed through various channels. There is an import dependency for specialized medical devices and
countries in the European Union (EU) are major import partners. The EU accounted for around 64% of total
imports (2014 figures) to Iran, followed by the Netherlands and China. Local distributors for medical devices
manufactured by foreign companies include Ameco Medical Equipment, Andishmand Pardaz, Pakhsh Raz,
Amoon Teb , Iran Behkar, Exirsazan Hayat and Teb Tasvir.
5.1.4.2 DISTRIBUTION NETWORK & RETAIL ANALYSIS
The retail distribution of most over-the-counter products in Iran is permitted only through
chemists/pharmacies, owing to the strict regulations set by the Ministry of Health and Hygiene. The
pharmaceutical supply chain begins with the sourcing of active and inactive ingredients for permitted
products. Dosages are calculated and packed into different configurations. Products move along to
companys warehouses, wholesale distributors, retail pharmacies, medicinal establishments (hospital
pharmacy), and finally to end-users.

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The distribution of medical devices largely occurs through wholesale distributors or agents. Some local
companies use direct-selling models. A typical pharmaceutical distribution network consists of market
warehouse/distribution centers, wholesalers, retails/hospitals and patients (end-users).
5.2 MARKET ENTRY: THE ADMINISTRATION

5.2.1 HOW TO REGISTER A COMPANY (FLOWCHART)
The procedures, time and cost involved in launching a commercial or industrial firm containing anywhere
between 10 and 50 employees, and start-up capital of 10 times the economy's per-capita gross national
income.
Action
Obtain a Criminal Record
Clearance
Reserve a unique company
name
Register at the Companies
Registration Office, pay the fee
Place a notice of the company
formation in the Official Gazette
and the selected newspaper of
general circulation
Monetary Outline
Timeline (no. of days)
IRR 50,000 per criminal record
5 days
IRR 375,000 for registration and

IRR 40,000 for name search and
3 days
reservation
IRR 140,000 for official Gazette,

IRR 240,000 for general
1 day
circulation newspaper
Notify the State Tax Affairs

Organization of the
commencement of business
No charge
1 day
No charge
2 days
activities
Register for VAT

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Action
Monetary Outline
Timeline (no. of days)
IRR 100,000
1 day
0.2% of the par value of the
1 day
Retrieve the officially sealed

books of account within 30 days
of registration
Pay the share certificate stamp
duty within 60 days of company
registration
subscribed share capital
Enroll workers in the social

security program at the Iranian
Labor Department and Obtain a
No charge
1 day
workplace number.
5.2.2 REGISTRATION PROCESSED

The procedures, time and cost involved in launching a commercial or industrial firm with between 10 and 50
employees and start-up capital of 10 times the economy's per-capita gross national income.
Obtain a criminal record clearance

o A criminal record clearance must be obtained from all company directors to register a new
company.
Reserve a unique company name, Register at the Companies Registration Office and Pay the
registration fees
o To register with the Companies Registration Office, the company must submit the following
documents:
o Articles of association, signed by all shareholders
o Declaration stating that all shares have been subscribed
o Minutes of the general assembly of founders and board of directors
o Minutes of the shareholders meeting, reflecting the election of the first directors and
inspector(s)
o Written statement accepting the position of directorship and inspectorship

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o National ID Card (Carte Melli) and birth certificates (certified copies) of the shareholders and
inspectors
o Name of a mass circulation newspaper in which all company announcements will be
published
Place a notice of the company formation in the Official Gazette and the selected newspaper of
general circulation
o It is possible to directly publish the notice of the company formation through the Official
Gazette and the selected newspaper or general circulation or submit it to the post office,
which then forwards the notice to the Gazette.
Notify the State Tax Affairs Organization of the commencement of business activities
o The new company must notify the State Tax Affairs Organization in writing about the
commencement of its business operations within 4 months. A failure to do so will result in a
fine and a deprivation of any applicable tax facilities and exemptions.
Register for VAT

o The registration for VAT is needed for a company performing general industrial or commercial
activities such as the case-study measured by Doing Business.
Retrieve the officially sealed books of account

o This should be retrieved within 30 day of registration
Pay the share certificate stamp duty

o The stamp duty must be paid within 60 days of company registration. It is paid at Bank Melli
Iran.
Enroll workers in the social security program at the Iranian Labor Department and Obtain a
workplace number

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5.2.2.1 MINISTRIES INVOLVED

Companies Registration Office
State Tax Organization
PHONE NUMBER: +98-21-6671 E-mail:
Ministry of Cooperatives, Labor

and Social Welfare
2598
info@statetaxorganization.ir
PHONE NUMBER: +98 21 64492425
E-mail: gocr@ssaa.ir
Phone: +98218573696
E-mail: infopack@irimlsa.ir
Ministry of Health and Medical

Education- Food & Drug
Administration
Ministry of Foreign Affairs

PHONE NUMBER: +
PHONE NUMBER: +9821-
982166739191
66405598
E-mail: Info@mfa.gov.ir
E-mail: dinarvand@fda.gov.ir
5.2.2.2 CRITERIA AND CONDITIONS

Iran developed a specific Medical Devices Regulation. The regulations objective is to ensure the safe use of
medical devices, supplement the food and drug regulation to complete the regulatory controls in this area and
to define the roles and responsibilities of those undertaking activities related to Medical Devices.
Medical Devices Regulation
The primary regulatory authority for Medical Devices in Iran is the Central Office for Medical Equipment
(COME). The COME is a specialized department of the Ministry of Health (MOH) and the decision-making center
for Medical Devices in Iran. Regulatory requirements for Medical Devices are outlined in the Medical Care and
Medical Education Act. The Institute of Standards & Industrial Research of Iran (ISIRI) is the sole organization
in the country that can lawfully develop and designate official standards for products.
Required documentation
The Required documentation for registration is similar to that required for FDA approval or EU CE Marking and
follows the format of the GHTF STED. According to Article 28, the following documentation should be
submitted as part of an application:

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CE or FDA certificates supported by relevant ISO standards,
Quality Management System (QMS),
Test reports and certificates from the Iranian Standards Institution for those Devices subjected to
mandatory local standards,
Submission summary dossier,
Technical details of the medical Devices,
Letter of Authorization, which is to be legalized by the chamber of commerce and Iranian embassy
Labelling on the product should carry the name of the manufacturer, the serial or batch number, the
date of manufacture and the shelf-life for disposables, specifications and warnings. Compliance with
the COMEs labelling requirements is also mandatory.
Registration number
After the approval of the application, a registration number is given, which is valid for five years. Medical
Devices are registered at MOH where a registration number and a marketing authorization are issued. The
applicant cannot manufacture or import these products unless the registration number and marketing
authorization are issued.

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5.2.3 LIST OF FORMS & DOCUMENTS

Once the legal commission accepts the registration, the following documents are required:
Step I: Approval letter of Legal Commission, Original Legalized LOA, Legalized Certified Protection
Professional, Good Manufacturing Practice Certificate, legalized registration status of the product in
countries in which the product is sold.1
Step II: Copy of Ministry of Health letter for registration fee payment, Drug Master File, Receipt of
registration fee payment
Once these processes are completed, the bilingual packing will be submitted & the price for Iran will be sent
to the Pricing Committee. Then, the IRC request form will be sent to the MOH & finally the IRC will be issued.
5.2.4 PRODUCT CONTROL GUIDELINES SPECIFIED BY THE GOVERNMENT
A certificate of Pharmaceutical Product according to the WHOs specifications
A certificate/letter containing list of the countries where product (in any dosage form) is registered
and its registration number
A certificate/letter containing list and of the countries where product (any dosage form) is sold/used,
and information about the date of introduction in these markets.
A certificate/letter has a factory/manufacturing unit and the address of factory containing list of the
countries in the company
A Letter of agency for the product(s) to an Iranian company
Complete form for price of product
Complete Drug Importing Application
Samples of product including CoA and all analytical records
In the first step, if the company owns GMP certificate from US/FDA, EMA, JAPANS PMDA, PMDA, SWISSMEDIC-TGA
UK/MHRH, it will not be inspected. If not, it will be inspected by MOH inspectors as well.
1

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6 SOURCES
Ministry of Healthcare, Iran
Paid Databases
US National Library of Medicine, National Institutes of Health
Iran Medical Tourism Board
International Medical Travel Journal
WHO
UNICEF
Pars Times
Novin Investment Bank Group
Wilson Centre

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Market Entry Iran Healthcare Market2016

Market Entry: Healthcare Market in Iran

2016 Mordor Intelligence

4.2 PHARMACEUTICALS ............................................................................................................................................16

Market Entry: Healthcare Market in Iran

2016 Mordor Intelligence

1.2 REGIONAL ANALYSIS

employment distribution is heavily

1. High levels of red rape

2. Risk of snap back or reinstatement of sanctions,

extractions. Low oil prices, owing to

given the complex roadmap in the nuclear sector

the slowdown of Chinese imports and

specified by other global states, exposing

global demand is likely to affect the oil

3. Residual sanctions may negatively impact project

2. The inflow of Iranian oil in the already

expected to further affect oil prices

5. High bureaucratic interference, opaque ownership

3. The low oil prices can affect the

structures and powerful Iranian lobbies, which

profitability of Iranian firms, thereby

can affect the competition in the market

limiting employment opportunities in

Market Entry: Healthcare Market in Iran

2016 Mordor Intelligence

6. Regional geopolitical environment unstable;

the nation. This in turn, will affect the

growing tensions between KSA and Iran in the

spending power allocated on health at

both the state and household level

7. ISISs base camp in the region

chance of societal conflict in the nation. However, cultural

limitations and the conservative outlook of the people and

the government toward the influence of foreign

However, many key industries like

investment in Iran may hamper prospects for healthcare.

biopharmaceuticals, medical devices,

etc. have not been able to develop,

Market Entry: Healthcare Market in Iran

which generally rules in favor of the employee.

2016 Mordor Intelligence

1.2.2 ANALYSIS OF EASE OF DOING BUSINESS

DB review of 2013, the prerequisite of a criminal record

certifications indices". In Iran's case, increase in quality of

"The Islamic Republic of Iran made getting electricity easier by

eliminating the need for customers to obtain an excavation

lawyers, property registries, and notaries. Number of

Market Entry: Healthcare Market in Iran

2016 Mordor Intelligence

Establishment of a new private credit bureau improved access

to information. However, other comparative factors pulled the

Despite a lowered rank, improvements have been made: a

prerequisite for immediate disclosure of related party

344 work hours filing, preparing and paying taxes. Total of

A downward slip in the ranking is because of comparative

expedited by way of introduction of electronic filing of some

Market Entry: Healthcare Market in Iran

2016 Mordor Intelligence

Iran: Medical Devices Import

Medical Device Imports (USD million)

Source: Mordor Intelligence Analysis

Market Entry: Healthcare Market in Iran