The Iraqi Pharmaceutical Industry: Strengths, Weaknesses, Opportunities, and Threats

The Iraqi Pharmaceutical Industry: Strengths, Weaknesses, Opportunities, and Threats

The pharmaceutical sector in Iraq has a long history dating back to 1920 when the first pharmaceutical manufacturer, Qatrat Alayn, was established. However, it was not until 1961, following the establishment of the Industrial Development Law, that the private sector witnessed an increase in pharmaceutical factories, with only four out of the ten existing factories being licensed by the Ministry of Health.

The Soviet Union and Iraq signed an economic cooperation agreement in
1959, leading to the building of The State Company for Drugs Industry and Medical Appliances (SDI), commonly known as Samarra. The project cost was 618 million USD, though operations did not begin until 1970. The 1990s saw the government and private sector working together to manufacture pharmaceutical products, which led to an increase in the number of pharmaceutical factories in the country. As of 2005, there were 17 pharmaceutical manufacturers in Iraq employing 4,034 people.

In 2021, Iraq had a total of 23 national pharmaceutical manufacturers. Seven large pharmaceutical manufacturers, of which one is owned and one is partially owned by the government. The remaining five are in the private sector. Two of the five private sector manufacturers are located in the Kurdistan region. The medium-sized pharmaceutical enterprises are only three in total, and one of which is located in the Kurdistan region. The remaining 13 companies are considered small pharmaceutical manufacturers.

National drug manufacturers only produce finished products, while all active ingredients
are imported from outside Iraq. There are no facilities in Iraq equipped with the advanced technologies required for the production of biological medicine (biopharmaceuticals) or World Health Organization (WHO) prequalified products, which are pharmaceutical products that have been assessed by the WHO and were found to be acceptable for the treatment of certain diseases and later procurement by UN agencies.

Administrative Deputy: The Administrative Deputy is responsible for overseeing the administrative affairs of the Ministry, including human resources, financial management, and general administration.

Technical Deputy: The Technical Deputy oversees the technical aspects of the Ministry, including the development of health policies, the provision of health services, and the regulation of healthcare products and facilities.

The State Company for Drugs and Medical Appliances: Also known as KIMADIA, is a state-owned company responsible for the procurement and distribution of medicines, medical supplies, and equipment for the public healthcare system. It is in charge of importing, purchasing, storing, and distributing essential medicines, vaccines, and medical equipment on the essential medicines list (EML), as well as managing the country’s medical warehouses and transportation. The National pharmaceutical manufacturers contributed 47.8% of the total volume of KIMADIA’s public sector medicine contracts in 2019. In the Kurdistan region, medicine procurement is done via KIMADIA, which delivers medicine to public health care and directly to the local health directorates.

Medicine procurement for the private sector is different from that of the public sector. National drug manufacturers, registered drug wholesalers, and scientific bureaus supply medicines directly to the private sector, mainly private tertiary care facilities and community pharmacies. In the public sector, medicine is provided free of charge, whereas, in the private sector, drug pricing is determined by the registration department at the Directorate of Technical Affairs (DTA). The inspection directorate at the Ministry of Health and Iraqi Pharmacists Syndicate maintains a monitoring of drug prices.

The number of pharmacists has increased substantially in Iraq, which has led to
the subsequent increase in the number of pharmacies. The distribution in the graphs suggests the uneven spread of pharmacists, with some governorates having significantly more pharmacists than others. This could be due to a variety of factors like population density and the economic development of the governorate.

The total number of pharmacists and pharmacies is not indicative of how well the residents of these governorates are served. Duhok and Maysan are still on the lower end of the spectrum. They are joined by Sulaimaniyah with less than 2 pharmacists tending to every 10,000 citizens. Karbala, Najaf, and Babil, which are in the middle Euphrates region, have at least 6 pharmacists per 10,000 inhabitants. That is around the same number of pharmacists allocated to 10 thousand people in the capital city of Baghdad.

Iraq’s population has been on a steady increase over the years, with the latest figures for 2020 indicating that the total number of births inside and outside the country was 1,022,227. The country has a relatively young population, with the median age of the population being 20.8 years. Additionally, the life expectancy at birth for both genders is 71.5 years. However, the country still faces a significant health burden, with ischemic heart disease, cerebrovascular diseases, hypertension, diabetes mellitus, malignant tumors, and renal failure being among the top 10 causes of death in Iraq. There will be an increased demand for medication with the growing population. To sustain the country’s medical security, the drug manufacturing sector must be supported.

Currently, there are 23 national drug manufacturers, and many of them have Good Manufacturing Practice certificates (GMP) and ISO certificates. These are certificates acquired by many to verify the quality of their products, allowing them the capacity to export their products to other countries. National manufacturers are also making strides in production, modernizing their machinery to produce better-end products and improving their packaging. For example, SDI started packaging their syrups in proper cartons with educational leaflets instead of selling them bare with only a sticker attached. National manufacturers are also venturing into manufacturing new drugs like hormonal and anticancer medication.

The public’s interest in the industry is reflected in the significant number of pharmacy students graduating each year. According to the 2019 statistics by the Ministry of Higher Education and Scientific Research, there are 44 public and private institutions tending to 7,929 pharmacy students. The country boasts a large number of pharmacists and a growing number of pharmacy students, approximately 35,000, who could contribute to the drug industry with the right support and training from private and public manufacturers.

Iraq’s natural resources present an untapped potential for the pharmaceutical industry. The country has access to a wide range of natural resources, including minerals and plant-based materials that can be used in the production of pharmaceuticals. They have been used extensively in home remedies and folk medicine, most of which remain to be studied. Active ingredients from these plants could be extracted and used in drug manufacturing and development, subsequently helping in the growth of the local industry and providing opportunities for innovation and research.

Iraq’s pharmaceutical industry currently lags behind neighboring countries. Some of the main causes of such a lag are due to insufficient human capacity skills, lack of research and development efforts, and hesitant investments in the sector. Despite the 35,000 pharmacists registered in the Iraqi pharmacy syndicate, experts in drug manufacturing are a rarity as there are not many pharmacists venturing to practice industrial pharmacy. During the 1980s, newly graduated pharmacists were scheduled to have training in public sector drug manufacturers for the duration of 4 months. They would interact with Russian and Arab professionals working in the factory, gaining knowledge and insight into the drug manufacturing process. However, that system of practice ceased after 2003, mainly for security reasons as territories suffered many misfortunate events. The last of which was the ISIS invasion, which destroyed 2 drug factories in Ninewa.

The government’s lack of support further hampered the industry’s growth. Prior to the sanctions imposed during the 1990s, public drug manufacturers were the only suppliers of drugs for the Ministry of Health, and whatever drug Iraq could not manufacture was imported via KIMADIA. This caused the demise of private pharmaceutical companies until the need for them was clear during the 1990s, mainly to overcome the shortage of medicine due to the imposed sanctions. However, many of the regulations introduced on private manufacturers during that period are still active to this day.

The government oversees all activities and orders done by the manufacturers. The average order of active ingredients required to manufacture a drug takes as much as 4-6 months from the initial date of request to the date of arrival at the factory. The regulatory environment in Iraq is not well-developed, and there are gaps in the system that allow for the proliferation of counterfeit and substandard medicines. This undermines public trust in the industry and can have serious health consequences.

The Iraqi government has been working towards supporting national drug manufacturers. The current Prime Minister and Minister of Health have been actively working on easing custom tariffs and revising regulations related to the purchasing and procurement process for machinery and active pharmaceutical ingredients. Manufacturers working within the Kurdistan Region of Iraq have modernized regulations or, at times, lack restricting regulations, allowing them room to function better than their counterparts working in central Iraq.

The increasing population is an added burden to the Iraqi healthcare system, which is expanding slowly to meet the needs of the populace. This growth needs to be accompanied by an equivalent growth in the drug manufacturing sector.

During the peak of SDI, drugs produced were exported to neighboring countries and Western Europe. There is great potential for Iraqi-manufactured drugs to be exported to countries in the MENA region, ultimately leading to increased revenue and growth. However, proper importation of drugs cannot happen unless the needs within the country are met, and KIMADIA limits its need for imported drugs.

SDI was established as an international cooperative alliance between Iraq
and the Soviet Union in 1965. This cooperation is considered a success story of a collaborative effort to establish an institution that was considered the best, largest, and most advanced in the region at the time. Future collaborations with international companies to access new markets, technologies, and expertise could have similar success stories, eventually leading to new product development, improved efficiency, and increased growth and revenue for the industry.

The dependence on imported drugs and lack of finance for drug development research leaves Iraqi manufacturers unable to compete with foreign companies in the global market. The drug manufacturing business requires many resources, frequent updates to technologies used, and great effort in marketing and distribution capabilities. All of these are lacking at the time for national drug manufacturers. The lack of self-sufficiency in pharmaceuticals in Iraq makes room for international companies to compete for their share in the Iraqi market. Unless national manufacturers receive imperative support from the government to achieve self-sufficiency, importing Iraqi medicine will remain a far-fetched challenge. 

Drug manufacturers in Iraq have struggled with corruption as corrupt officials usually demand bribes or kickbacks in exchange for allowing active ingredients to enter the country or allowing manufacturers to use proper materials or equipment, further compromising the quality of the medications. Other threats related to Iraq's situation as a country include economic instability and copyright infringement. These threats have discouraged many from entering the drug manufacturing industry. Establishments like pharmaceutical factories are considered very risky in terms of capital investment, and the lack of economic stability and simple assurances like copyright protection are major deterrents for investments in the field.

National manufacturers struggle to attract pharmacists to join them in the drug manufacturing business, as they may not offer sufficient salaries. Freshly graduated pharmacists are usually employed by the public sector and often work in community pharmacies, earning significantly more than they would if hired at a pharmaceutical factory. This has resulted in a severe shortage of skilled workers knowledgeable in drug manufacturing and industrial pharmacy.