Sunday, 27 January 2013

The grotesque side of international politics

A peep out at international politics always throws at you distasteful human behaviour that defies ethics, rational thought and peaceful co-existence. It is a norm that one population suffers in order for another to flourish. In history, influential human beings and their directions have resulted in extreme distress for populations en masse, recent examples being that of George Bush and Osama Bin Laden; Prabhakaran and Rajapakse.

What is causing distress in Iran?

The UN sanctions on Iran, supported by the US and its EU allies, to discourage Iran’s nuclear energy programs have led to the alienation of the nation’s commercial freedom. The international banks have been asked to sever all contact with the Iranian banks which has prevented cross-national and continental trade activities. Amidst all the chaos surrounding oil exports and curbs on banking, one silent victim has been the pharmaceutical industry.

Although the unilateral sanctions put in place by the United States and the European Union has exemptions for medicines and medical equipment, companies interested in selling such merchandise to Iran require a special license from the Treasury Department’s Office of Foreign Asset Control. However the reluctance of the banking organisations (American and European) to engage in transactions fearing backlash from the governments have discouraged the exporters to Iran.
 The healthcare problem

Iran has a well developed generic markets industry which produced most of the necessary drugs. However the innovative drugs which are used to treat advanced diseases are not available at this time in the market owing to the international trade alienation. The size of the Iranian market is USD 3.2 billion, of which USD 1.78 billion is generics, USD 1.13 billion is innovative drugs and USD 360 million is OTC. The market share by volume is relatively small for the innovative drugs but the higher prices have pushed up sales.  Iran has a healthcare system where 90% of the population has access to healthcare provided by the government and the employers. However the weakening economy due to the drop in international oil exports is beginning to show up on the dropping healthcare expenditure.

The suffering is chiefly borne by haemophiliacs, cancer patients (particularly leukaemia), heart diseases, lung problems, and multiple sclerosis. There are currently 37000 patients of multiple sclerosis in Iran and every year 40000 patients die of cancer. International health authorities suggest that a cancer tsunami is expected by 2015, due to its high incidence in the country.

Examples from the past

When trade sanctions happened to Iraq in the 90s, a study conducted by the Columbia school of public health, found that 225,000 children aged under five died in 8 years. This number is higher that the children killed in Hiroshima. However the US government thought that the choice was hard but the price was worth it to stabilise the Middle East.

What the Iranian leaders say?

The Iranian leaders, are holding on to the hardline position of Iran’s Revolutionary Guard and Supreme Leader Ayatollah Ali Khamenei, who has called for the development of a “resistance economy” in order to resist the pressure by the West. However there are dissenting voices both within Iran and in the Diaspora that wants the Iranian leadership to compromise with the West. The US can promote these voices if it offers to lift some of the economic sanctions in return of curbing the nuclear advancement. However the US has so far been un-yielding.

What lies ahead?

Iran may look at support from other willing nations for trade in pharmaceuticals. India is exploring the opportunity of drug exports to Iran despite pressure from the US in return of oil. Business will be carried out in rupee terms and not in dollar terms.

Few points to ponder here..

-      Would Iran violate the TRIPS norms and engage in compulsory licensing?
-      Would trade with India become a reality?