Iraq's healthcare and pharmaceuticals market is ripe for investment. Healthcare infrastructure is ageing, or absent, beyond the capital; there is a shortage of trained healthcare personnel; a drug supply chain that is hampered by imports and counterfeit drugs; and a burden of communicable diseases in much of the country. But the security and political risks of operating in this country hang heavily over the market, deterring investors.
While Iraq's oil is an attractive reason to work with the country, the risks currently outweigh the rewards. There are benefits to be had thanks to oil, though. As the government's chief source of revenue, much of this money could be used to improve healthcare provision, expand universal healthcare coverage, and strengthen basic vaccination and other healthcare programmes. But until this foundation is in place, multinationals may prefer to invest elsewhere.
Headline Expenditure Projections
- Pharmaceuticals: IQD1,326bn (US$1.14bn) in 2012 to IQD1,473bn (US$1.27bn) in 2013; +11.1% in local currency and +11.4% in US dollar terms. Forecast lowered slightly from Q413 on account of macroeconomic trends.
- Healthcare: IQD13,816bn (US$11.86bn) in 2012 to IQD16,045bn (US$13.81bn) in 2013; +16.1% in local currency and +16.4% in US dollar terms. Forecast also lowered from Q413 because of macroeconomic conditions.
Risk/Reward Rating: Iraq remains at the bottom half of our Middle East and African region pharmaceutical Risk/Reward Ratings (RRR) score for Q114. It fares better on the Rewards side of the equation than in terms of risks. This quarter, it posted a score of 40.0 out of 100, just below the regional average, placing it 15th out of a total of 30 markets.
Key Trends And Developments
Since the outbreak of conflict in Syria, the Kurdistan region of Iraq has faced an influx of refugees. The World Health Organization (WHO) estimates that around 200,000 have entered the country. Because of poor conditions in refugee camps, the WHO and Ministry of Health representatives in three Kurdistan governorates established an early warning and response mechanism to deal with potential healthcare emergencies and outbreaks of infectious diseases. The WHO reports that Hepatitis A and acute jaundice syndrome are just some of the diseases in these camps.
In December 2013 the government announced plans to invest US$136.7mn in improving public services in poor and isolated parts of Iraq. A series of projects lasting between eight and 20 months have begun, with the construction of health centres one of the government's priorities.
The government claimed in October 2013 that it had sent 4,500 patients abroad for medical treatment between January and September 2013. Turkey and India are the two main destinations for Iraqi patients.
BMI Economic View: Private consumption and oil exports will be the two key factors boosting economic growth in Iraq in the short term. We forecast that Iraq will post real GDP growth of 10.6% in 2013 and 9.2% in 2014, but these figures are subject to change depending upon the level of political stability in the country.
BMI Political View: With parliamentary elections scheduled for April 2014, and growing outbursts of violence, political stability seems unlikely in Iraq in the short term. A new electoral law has divided politicians, and a risk exists that voting will be delayed until it is accepted by parliament.