A bitter pill: the hidden cost of Trump’s sanctions
When the US increased pressure on Iran this month, it was the effect on oil exports that made headlines. But the move also threatens the supply of drugs to those most in need
Leila Koochaki’s health has become collateral damage as the US extends its economic offensive against Iran. The 47-year-old had to contact 15 pharmacies across Tehran before she finally secured the antifatigue medication she takes to cope with multiple sclerosis. “I found a small drugstore that could give me a little, just two strips of 10 tablets each,” Koochaki says. “I begged them to keep it for me until I got
there.”
On paper, US sanctions permit Iranian purchases of humanitarian goods such as medicines. To avoid accidentally triggering penalties, however, foreign drug companies and international banks are taking extra precautions even when dealing with permitted business. The new legal complications, along with panic buying and hoarding, mean some drugs are increasingly difficult to find.
Making things worse, a collapse in the rial has pushed up prices of imported medicines and active ingredients used in locally made drugs. The scarcities are forcing patients to make potentially life-altering decisions. “I might start taking halves or skipping doses so I don’t run out,” Koochaki says of the modafinil tablets that keep her going.
When the US increased pressure on Iran earlier this month, it was sanctions on critical oil exports that dominated headlines. But the penalties went much further. The US treasury sanctioned more than 700 individuals, entities, aircraft and vessels, including Iran’s central bank and many of its commercial lenders. Some of those banks lost access to the Swift international payment system – rendering them even more toxic to overseas counterparts.
I might start taking halves or skipping doses so I don’t run out
Doug Jacobson, a sanctions lawyer at Jacobson Burton Kelley in Washington, says it’s becoming difficult to find foreign banks willing to do even permitted business with Iran. US officials say they’re “not going to sanction humanitarian payments, but banks have to make a risk-based, cost-benefit decision on whether it’s worth it for them and many are taking the position that it’s not worth it”, he says.
European drug companies contacted for this story said they continued to deal with Iran. A spokesperson for French drugmaker Sanofi, the only global pharmaceuticals firm with a production plant in the Islamic republic, said sanctions changes didn’t affect its ability to sell medicines there. Swiss firm Roche said in a statement it’s “continuously assessing” the effect of penalties and remains committed to serving Iranians. But Iran won’t be able to import drugs at pre-sanctions levels if it can’t pay for them.
Until recently four private banks facilitated nearly all of Iran’s humanitarian trade: Parsian Bank, Middle East Bank, Saman Bank and Bank Pasargad. All four are now targeted with primary US sanctions that bar American firms and citizens from doing business with them. Parsian also faces secondary penalties which pressure foreign companies to comply by threatening to sever access to the US financial system.
In a recent tweet, Iranian foreign minister Mohammad Javad Zarif attached two letters he said were sent by European drug suppliers to Iranian importers terminating trade due to sanctions. Attempts to confirm the contents of the letters weren’t successful. Iran’s medical council also appealed to United Nations secretary general Antonio Guterres to take action. US sanctions had “seriously affected our ability to access drugs, healthcare services, treatments and necessary medical care”, the council said.
Brian Hook, the US State Department’s special representative for Iran policy, told reporters after the latest measures were announced that the US has never targeted medicine or medical devices. The “regime’s attempts to mischaracterise these humanitarian exemptions are a pathetic effort to distract from its own corruption and mismanagement”.
Under Donald Trump, the US has sought to curb Iran’s influence in the Middle East, withdrawing in May from the 2015 nuclear deal. European and other signatories back the accord as the best way to prevent Iran producing a nuclear weapon, and are seeking to maintain channels for trade and investment. The main
medication Koochaki takes now is an Iranian version of multiple sclerosis treatment Avonex, and a health ministry helpline assists her in finding supplies. For some illnesses, however, patients rely on foreign medication as local alternatives don’t exist or aren’t as effective.
Iranian officials are overlooking the impediments they themselves have been putting on these importations for years
“The efficacy of Iranian medicines is inadequate,” says Maziar Mostafavi, a family physician and former emergency ward doctor. That’s partly because difficulties obtaining active ingredients over the years led some manufacturers to lower dosages, especially with antibiotics, he says. “Failures in treatment have increased.”
Medicines used to treat critical or rare illnesses are most likely to be affected as the sanctions and currency crisis hit profits at local pharmaceutical companies, says Seyed Abdolreza Hejazi Farahmand, chief executive of two Tehran-based companies that produce plasma-derived hemophilia treatments. Five Tehran pharmacies surveyed said the imported anticoagulant warfarin, used in post-operative treatments for heart conditions, is now virtually impossible to find and there’s no reliable locally made alternative.
Iran’s health ministry has vowed to help domestic drugmakers produce medicines equal to those sold by multinationals, and officials have cracked down on hoarding, which has exacerbated the situation. The Etemaad newspaper in August reported medicines worth $300,000 (£235,000) had been found stashed in warehouses. In another case, the daughter of a former minister acquired fake trading licenses and stockpiled pills to drive up prices, Mehr news agency said.
“Iranian officials are overlooking the many impediments they themselves have been putting on these importations for years whether it’s through legal obstacles or corruption,” says Farhad Alavi, a managing partner at the Akrivis Law Group in Washington. In Iran, though, blame is increasingly falling on the US. Iranians are using social media hashtags such as #SanctionsTargetMe to draw attention to what they say is a growing crisis.
“What are people supposed to do?” asks cancer sufferer Mehdi Shadmani on Twitter. “Who has tens of millions of rials to pay each month and from where? They have to sit and watch their children, fathers and mothers just waste away?”