About That Medicine Shortage in Iran…

Co-authored by Saeed Ghasseminejad

Iran wants the West to believe that a sanctions-induced medicine shortage is causing the death of thousands of Iranian citizens, and they're using Western reporters to help spread the word. Never mind the fact that this purported medicine shortage in Iran is actually a crisis by design, intentionally foisted upon the Iranian people by a regime intent upon diverting funds to it illicit nuclear program. Western journalists are only too eager to report the Iranian spin.

In November 2012, the British newspaper The Guardian published a story penned by Saeed Kamali Dehghan with the headline: “Haemophiliac Iranian boy 'dies after sanctions disrupt medicine supplies.'” The article rehashed a letter sent by the Iran Hemophilia Society to the World Health Organization (WHO), which had made the front page of many Iranian media outlets the previous summer. Soon after, major news networks such as the BBC picked up the story and amplified it. By January 2013, Dehghan felt confident enough to escalate the story of one unlucky patient into a purported humanitarian crisis affecting an entire nation.

What Dehghan neglected to mention was that the hemophiliac in question did not die for lack of medicine, but rather for lack of speedy access to a hospital. Yet his account was accepted as truth, even as senior Iranian officials began to affirm that funds earmarked for medicine were being misspent.

For example, former Iranian minister of health, Marzieh Vahid Dastjerdi noted that government mismanagement of medicinal imports was a reason for the problem. She alleged that U.S. $2.4B in funds earmarked for the import of medicine had never been made available to her ministry; it went instead toward the subsidized import of luxury cars. Western journalists ignored these allegations, even as she was summarily sacked for her candor, choosing to write copy that tended to lend credence to Tehran's demands for sanctions relief.

Dastjerdi was not the only official calling foul. Other senior Iranian officials conceded that the health crisis was self-imposed. In an interview with the Revolutionary Guard-controlled news agency Fars News, Iran's new minister of health, Seyed Hassan Ghazizadeh Hashemi recently stated, “the medicine problem is caused by ourselves, it is not related to sanctions at all.” He also alluded to the misapplication by the Ahmadinejad regime of $20 billion in budgeted healthcare funds toward an ambitious housing project.

Nonetheless, the reports of a sanctions-struck Iran continue to tug at the heartstrings of the Western public. This has been amplified by the rise of new Iranian President Hassan Rouhani, who is widely touted as a moderate intent on striking a deal with the West that would solve the nuclear standoff and earn sanctions relief for his efforts.

But Rouhani is not Iran's head of state; that title belongs to the Supreme Leader, Ayatollah Ali Khamenei. He is, in many ways, as much to blame for the medicine shortages as anyone. In many ways, he is Iran's Supreme Pharmacist.

Through his network of tax-free investment holdings, Mr. Khamenei directly controls 23 percent of the publicly traded pharmaceuticals on the Tehran Stock Exchange; the equivalent, at current market prices, of $290 million. Altogether, the supreme leader controls two thirds of the Iranian pharmaceutical industry.

Iran's government controls 14 other companies, too. In fact, of the 27 pharmaceutical companies publicly traded on Tehran's Stock Exchange, only 7 are controlled by the private sector. And Khamenei is not the only one getting rich. Ayatollah Mohammad-Reza Mahdavi Kani, head of the Assembly of Experts and secretary general of the Combatant Clergy Association, controls a pharmaceutical company worth $21 million.

Iran's ruling elite is getting wealthy from the medicine trade. If there is a pharmaceutical shortage, it has been created by the government's monopoly on production, negligent mishandling of foreign currency and misallocation of general healthcare funds. And while it is too soon to draw conclusions, the data indicates that the Iranian government may actually be leveraging the stress caused by sanctions to rake in whopping profits from the medicine shortage, since scarcity drives up prices.

Contrary to some reports from the West, the medicine shortage is not proof of the cruelty of sanctions. It is conclusive evidence of the callous and rapacious nature of Iran's rulers. Iran's leaders made the choice to prioritize nuclear progress over the wellbeing of its people.

They should not be rewarded for their malice.

Emanuele Ottolenghi is a Senior Fellow at the Foundation for Defense of Democracies. Saeed Ghasseminejad is a Ph.D. Candidate at Baruch College, NYC.