Moving medicine in Iraq: The political economy of the pharmaceutical trade

Poor infrastructure and even poorer governance is a critical part of the story of healthcare in Iraq, but so too is the complex issue of the movement and supply of medicines.

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4 minute READ

Dr Omar Sirri

Affiliated Researcher, the Institute of Islamic Studies, University of Toronto

Last November, the head of the Iraqi Medical Association, Jassim al-Azzawi, stated that his team was making progress on digitized pharmaceutical prescriptions. This assertion may sound strangely mundane considering the many challenges facing Iraq’s healthcare system. But handwritten medical prescriptions have for years been a point of contention in the country.

Some doctors use handwritten coding systems when prescribing medications, scripts illegible to everyone but the pharmacists with whom the prescribing doctor has a partnership. Prescription in hand, patients are directed to the doctor’s chosen pharmacy – and the only pharmacist able to interpret the scribbled code.

Moving medicine into and throughout Iraq binds together a motley collection of ruling elites, businesspeople and armed groups, from across the political spectrum.

Labelled ‘dealer doctors’ by some in the industry, these doctors negotiate incentives for carrying particular drugs hawked by pharmaceutical representatives, such as cash payments per unit sold. The price of a drug across different pharmacies can often vary, sometimes wildly, presenting a profitable opportunity for doctors and pharmacists to increase consumer costs.

But there is more to this story than variable pricing schemes. Moving medicine into and throughout Iraq binds together a motley collection of ruling elites, businesspeople and armed groups, from across the political spectrum. According to one official, the broader transnational pharmaceutical trade can be worth as much as $3 billion per year – of which very little goes to government coffers.

Pharmaceuticals are a vital part of the story of conflict in Iraq.

While much of the focus on smuggling and conflict in Iraq has centred around weapons, oil and gas, and illegal drugs, the pharmaceutical trade can be just as lucrative, and consequential – at the expense of public health. The business of health is a key link in a conflict chain not simply comprised of men with guns and motives. Pharmaceuticals are a vital part of the story of conflict in Iraq precisely because of how lucrative their import and sale is, the profits of which help fund conflict’s political protagonists and their agendas.

Importing treatment

Most pharmaceutical products in Iraq are imported from neighbouring countries, namely Iran, Jordan and Turkey. Others are brought in from further west and east, from the US and France, India and Bangladesh. Points of origin not only correspond with the kinds of corporate entities making and selling certain drugs; where a drug is manufactured can also affect the way certain products enter Iraq and its medicinal marketplace.

Government-controlled border points host smuggling practices that are sanctioned by state officials at both the local and national level.

The legal import and sale of medicine produced by multinational pharmaceutical companies are not immune to informal practices. For example, representatives of some firms bring products into Iraq via official customs and border points, such as the Um Qasr port south of Basra. But to avoid import taxes, they often have to make informal payments to customs officials linked to ruling parties.

As the owner of one pharmaceutical company put it: ‘An agent once told me which bay to enter through at the port in order to avoid the customs fees’. This experience is common and shows how government-controlled border points host smuggling practices sanctioned by state officials at both the local and national level.

In the north, the Kurdistan Regional Government (KRG) recently found that the price of a drug, supplied by one company, fluctuated by 1,500 per cent. The KRG official who shared these findings claimed there are links between government regulation and the pricing of medicines, insisting that the lack of formal taxation by public authorities is part of the problem. But central too are variations in informal taxation – bribes – collected along a trade route, and specifically at the different border points where goods enter Iraqi Kurdistan.

Smuggling replicas

This taxation virtually disappears when pharmaceuticals are smuggled into Iraq, for example through informal border crossings that are not under government control but established and operated by groups linked to ruling political parties. Such informal entry points mostly sit along Iraq’s land borders with Iran and Turkey and, according to interlocutors, the share of pharmaceutical imports that pass through them rivals the imports that pass through official border crossings.  

Generic drugs – medicine that purportedly does not differ in chemical composition from well-known brands – often enter Iraq via informal border crossings. But pharmaceutical representatives we spoke with insisted many of these smuggled drugs are counterfeits and knock-offs. Altered chemical composition makes these medicines less effective, while their ‘fakeness’ makes them more affordable than the original.

Brand-name drugs – even tried, tested, and approved generics – can be too expensive in a country where wealth inequality is only growing.

Brand-name drugs – even tried, tested, and approved generics – can be too expensive in a country where wealth inequality is only growing. People on low incomes, or no income at all, are forced to use the cheapest alternative, despite knowing such medicines are also of inferior quality. Such social determinants of health become only more pronounced within this political economy of Iraq’s pharmaceutical trade, and the routes through which medicines pass across ostensibly sovereign Iraqi territory.

The ubiquity of low-quality and counterfeit pharmaceuticals appears to be of growing concern among Iraqi authorities. In 2020, up to 50 tonnes of drugs seized at the Um Qasr port were found to be unfit for human consumption. That such seizures can occur at an official border crossing suggests that blanket criticism of Iraqi customs and border officials is misguided. Rather, how and when government capabilities are enforced at the border depends on how much money is at stake, and whose pockets it will line.

Political conclusions

A wide range of different actors stand to profit from the trade of pharmaceuticals in and across Iraq, such as importing companies, border guards, customs agents, national distributors, transporters, dealer doctors, and pharmacists. But of more consequence are the actions of ruling political parties and armed groups, those who facilitate the necessary paperwork and protection that helps ensure the movement of medicine.

Compartmentalized reform efforts, from digitizing prescriptions to targeting smugglers, will always fall short.

Last summer, Iraq’s National Security Service seized an illegal shipment of medicines intended for COVID-19 patients at Basra International Airport. Importers had reportedly not obtained the required health ministry approvals. But such approvals are often bypassed by more politically connected importers. This incident suggests government enforcement capability is often limited to cases where political protection for traders is absent or inadequate.

This complex web of actors and the blurred formal and informal lines of trade complicate policy interventions seeking to end the smuggling of pharmaceuticals. Any solution cannot be exclusively found at border crossings. Compartmentalized reform efforts, from digitizing prescriptions to targeting smugglers, will always fall short. Instead, policymakers must do more to link the entire conflict supply chain. The corruption that underpins this trade is politically sanctioned by many of the same parties that enjoy good relations with Western policymakers who claim to seek reform in Iraq.

Content

The supply and movement of medicine is an issue of great consequence for everyday life across Iraq. Yet it tends to be overshadowed by other tragedies of miscare – like the two deadly hospital fires in 2021. Poor infrastructure and even poorer governance is indeed a critical part of the story of healthcare in Iraq. But so too are everyday medicinal matters central to the country’s pharmaceutical trade and political economy.

It is important to note that this story is not exclusive to Iraq, not bounded by its porous borders. That profitable pharmaceuticals are almost entirely imported from neighbouring countries is a prompt to consider how moving medicine and other seemingly mundane goods around Iraq is implicated in a regional conflict supply chain – such as across Syria and Lebanon – that is not constrained by pesky lines on a map.

This article was produced with support from the Cross-Border Conflict Evidence, Policy and Trends (XCEPT) project, funded by UK Aid from the UK government. The views expressed do not necessarily reflect the UK government’s official policies.