Moving medicine in Iraq: Networks fuelling everyday conflict

A system involving doctors, pharmacists, political parties, armed groups, and businesspeople fuels corruption and conflict in a medicine supply chain which kills people every year.

Feature Updated 30 November 2022 8 minute READ

Contents

Dr Renad Mansour

Senior Research Fellow, Middle East and North Africa Programme; Project Director, Iraq Initiative

In the Iraqi capital city of Baghdad, Sara* is struggling to care for her young child Ahmed,* who has haemophilia. Most of the time she is unable to find the medicine that she needs for him. 

The failure of the city’s pharmacies to deliver has revealed to Sara the toxicity of Iraq’s post-2003 patchwork public and private healthcare system. Over the years, she says she has learned a key reason why the medicine frequently does not arrive.

The medicine Ahmed needs is meant for the public but is sold privately.

Pharmacies often only contact her at very short notice to indicate the drug is available for collection immediately. If she misses the collection slot, the drug is gone. But her son’s condition cannot stick to such a schedule. This has turned Sara’s life into a struggle for good luck to be in the right place at the right time.

The kinds of medicines Ahmed needs are intended for the public but have often been sold for private profit as part of a system which has generated billions for Iraq’s elite and armed groups at the expense of her boy and many others just like him. The privatization has led to the proliferation of fake and expired medicine, which offer greater profit margins for this elite.

Illustration depicting a mother and a child with the medicine they need.
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Illustration: Lynn Atme

Even when Sara finds the medicine, she says it is often unfit for consumption. On one occasion, doctors and pharmacists switched her son’s medication from a household-name brand to a cheaper one. But there were concerns this new medicine was worsening health conditions by causing patients to develop dangerous antibodies. Sara eventually found out that the drug made by a well-known manufacturer was being sold privately but that she was given a counterfeit drug instead.

Sara’s story is one of many. Of the medicine that does make it to the public, it has been estimated only 30 per cent does what it claims adequately while the rest is likely counterfeit or expired. And more expires before they even reach the pharmacy, meaning most medicines available can at best be ineffective and, at worst, unsafe.

In a country which has struggled to stabilize after decades of wars – the most recent being the capture of one-third of Iraqi territory by Islamic State (ISIS) – it is understandable that medicines may not be seen as a priority issue. But these stories show medicine lies at the heart of Iraq’s failure to overcome conflict.

The system of corruption since 2003 has quietly killed many Iraqis. To them, violence and conflict is not just men with guns, but the networks of elite whose greed profits from the country’s wealth at the expense of providing essential services. According to a former health minister, this network makes between $5 and $7 billion annually.

Iraqi citizens’ lack of access to the drugs they need – from antibiotics to treatments for long-term life-threating conditions such as Ahmed’s – not only puts people’s lives at risk but also damages trust in the medical authorities. During the COVID-19 pandemic, this fatal consequence of the political system costs lives.

To understand why and how the health of ordinary citizens is traded for profit, it is important to trace back where the medicines come from. This is the story of how medicine imported from outside Iraq’s borders moves along a 300 mile-long road from Basra to Baghdad. The supply chain connects doctors, pharmacists, political parties, armed groups, and business people. It starts beyond Iraq’s borders and kills hundreds of people every year.

Before medicine can enter Iraq

The conflict supply chain begins outside Iraq with the same kinds of multinational pharmaceutical companies which produce COVID-19 vaccines and everyday painkillers.

They want to sell their medicines on the Iraqi market but the regulatory environment is complicated. Bribery and corruption are prohibited, but both are everyday parts of Iraq’s pharmaceutical trade.

— Illustration: Lynn Atme

Before any trade can occur, a foreign company needs to be registered. This long and bureaucratic process of gaining approval and the right to import medicine has frequently offered the first potential opportunity for politically-sanctioned corruption.

To avoid regulatory breaches, some international companies hire Iraqi representatives known as ‘wakalat’, whose activities are not subject to this anti-bribery legislation.

Next, a multinational requires pre-approvals from Iraq’s Ministry of Health in Baghdad and its local representatives at the border. This involves registration with the Kimadia General Company for the Marketing of Medicines and Medical Supplies at the Ministry of Health.

This state-owned enterprise, like all others in Iraq, is partly staffed by civil servants linked to powerful political parties. For instance, reports have linked some officials in the ministry of health to the Sadrist movement, and they have helped to procure favourable contracts and payment terms for their party’s bosses.

Once registered, another approval is needed for medical materials and medicines that the company wants to import officially via Iraq’s sea, land, and air border crossings. To speed up the process or avoid blockages in deliveries or processes, Iraqi representatives are often encouraged to pay bribes to officials linked to Kimadia.

At the port in Basra

Once a company is registered and approved to import, it delivers medicines to the authorities at the port.

This is the next opportunity for potential bribery. According to some estimates, a company importing a 40-foot container might be requested to pay up to $50,000.

— Illustration: Lynn Atme

If a company does not pay, they may risk delays or product seizures which might, for example, cite improper or insufficient paperwork.

The money from bribes has often gone to political parties and armed groups from across the political spectrum of Iraq’s ruling elite. They compete for and cooperate over the formal and informal trade of medicine coming into the port.

According to officials in the ministry of finance, Iraq loses up to $10 billion – roughly five per cent of its GDP – each year because fees for imports across all sectors have ended up going to political parties rather than government institutions.

In the so-called ‘formal’ aspect of this trade, elite groups exert influence over those in government institutions who facilitate the paperwork. Many civil servants at the border are perceived as answering primarily to their political party, not the government institution in which they sit.

In the case of pharmaceuticals, people in the ministry of health have been the main facilitator, but also involved are individuals within the ministries for transport, interior, finance, planning, the intelligence agencies and – since 2016 – the Government Border Authority. Some senior civil servants in each institution are believed to have procured contracts and licenses on behalf of their party.

In the ‘informal’ part of the trade, a number of political parties have conducted the business themselves, relying on their political connections to ensure non-interference. In these cases, there may be no registered company involved in the trade at all, or the type of medicine being imported could be unlicensed by the Iraqi ministry of health. Some of these groups have used arms to push through the medicine.

The route to Baghdad

The next step is to transport the container of medicines on trucks to its final destination, Iraq’s capital city Baghdad, where relevant political party members then have further opportunities to profit from links to state institutions.

Another institution in the supply chain is the Trade Bank of Iraq (TBI) which assigns letters of credit to the companies in all sectors, including the pharmaceutical sector.

— Illustration: Lynn Atme

According to reports, the state bank has come under pressure from politically-sanctioned corruption, which is seen as having driven some officials to approve and send money to companies linked to the elite.

As the 40-foot truck approaches Baghdad, it meets an internal checkpoint and may be required to pay a fee to someone with links to one of the armed groups working it. These groups might include an array of Iraqi security forces from the ministries of defence and interior, as well as groups under the National Security Council such as the PMF.

Although these groups are government-recognized and thus ‘formal’, any such fee is not recorded in government accounts and is therefore ‘informal’. Although rare, negotiations over profit-sharing at times have erupted into direct violence and clashes between some members of the groups.

In the unloading area of a checkpoint, shipments are split into smaller trucks for transporting the medicine to a local wholesaler to distribute. Smaller trucks coming into the city are sometimes asked to pay between $500 and $1000 per small container.

The ‘formal’ part of this trade is largely controlled by those with links to ruling parties, which can result in some officials in the ministry of health approving and licensing their chosen local distributors. Much of the ‘informal’ part of the pharmaceutical trade in Baghdad is under the influence of armed groups which use their political and economic connectivity in the city and military power to distribute the medicines across networks of pharmacies. Those which refuse to pay fees or which take product from other wholesalers risk the threat of violent intimidation.

Going to the doctor in Baghdad

At the end of this pharmaceutical conflict supply chain are Iraqi citizens.

Citizens have no choice but to take what the doctor prescribes. Certain doctors, referred to by some in the industry as ‘dealer doctors’, write prescriptions for personal gain.

— Illustration: Lynn Atme

These prescriptions include personalized codes illegible to all but a selected pharmacist who may also profit from the relationship.

Patients can only take such prescriptions to one pharmacist, who can decipher the code. These dealer doctors and pharmacists have frequently done this knowing the smuggled drugs are most likely expired – they have merely been re-labelled with a newer date – or fake.

Even fake drugs are desirable to desperate Iraqi patients because trustworthy drugs remain too expensive, so poor Iraqis are forced to turn to the lowest cost option for healthcare despite knowing it is poor quality. Payments are said to usually be based on the number of units a dealer doctor guarantees to prescribe and sell through their partner pharmacy. Such doctors and pharmacists are not part of the political parties, but they are part of the chain and may be knowingly issuing harmful fake or expired drugs. The incentives some have received are believed to have ranged from cash to leisure travel outside the country for doctors and their families.

Tackling the whole chain is essential

Illustration depicting a map of Iraq and networks.
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Illustration: Lynn Atme

The medicine trade binds together relevant individuals linked to ruling elites across the spectrum such as the taxers (political parties and armed groups), facilitators (formal government institutions), wholesalers (pharmaceutical companies), transporters (trucking and shipping companies), and distributors (doctors and pharmacists).

Illustration showing a closeup of a network of connected dots.
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Illustration: Lynn Atme

Those actors are part of a conflict supply chain that is harming people. In both the ‘formal’ and ‘informal’ sections of this supply chain, profits are not recorded in government systems and the movement of pharmaceuticals from port to pharmacy offers opportunities for political and armed networks to extract profit and reinforce patronage relationships right down to the grassroots, undermining formal governance systems and risking tension between competing armed factions.

When presented with this supply chain, some international policymakers and humanitarian officials focus on specific parts of it. To them, the violence in this chain comes from the armed groups at borders and checkpoints. But for many Iraqis, the violence is more than these groups or the checkpoint. It is the entire supply chain.

Illustration depicting a network of different actors involved in medicine smuggling.
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Illustration: Lynn Atme

The doctors and pharmacists who are issuing fake or expired drugs, putting patients such as Sara’s son Ahmed at risk, or those members of the political elite who extract private revenue from programmes intended for healthcare are all part of this chain. And their actions contribute to the deaths and ill health of many more Iraqis every year than checkpoint clashes between armed groups.

The challenge for policymakers is to examine the trade of medicine as part of an interconnected conflict supply chain which extends across Iraq’s borders, not just as multiple isolated parts which has led to a failure of reform policies.

Illustration depicting hands and a digitized prescrition within the network.
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Illustration: Lynn Atme

Digitizing prescriptions

One reform programme has been to digitize and insist more doctors type rather than handwrite their pharmaceutical prescriptions.

This has not ended the chain because it focuses only on the dealer doctors and pharmacists. While some frontline service providers may be implicated and are beneficiaries of the business of care, they are hardly the most vital actors keeping status quo practices in place.

Illustration depicting hands and a digitized prescription with dots in the network highlighted.
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Illustration: Lynn Atme

Previous governments have sought to digitize the Iraqi Border Ports Authority’s work so that all documentation can better be recorded and be in the record of the Iraqi government which is unaware of a large majority of the paper trade.

Illustration showing hands and a digitized prescrition.
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Illustration: Lynn Atme

But the digitization has not adequately forced or incentivized taxers to claim their revenue generation. The amount of information that goes into the digital records is the same as the paper records, meaning that the government is still blind to most of this trade.

Illustration depicting a magnifying glass inspecting medicines with dots in the network highlighted.
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Illustration: Lynn Atme

Seizing the medicines

Simply seizing shipments has not worked adequately.

At the border, 2,714 captures were reported from May to June 2021, while 50 tons of drugs unfit for consumption were seized in the middle port of Umm Qasr in 2020.

But some political parties and armed groups are believed to have simply used their coercive influence over individuals within state institutions to ensure their product has not been touched.

Illustration depicting a magnifying glass inspecting medicines.
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Illustration: Lynn Atme

Even if a random check does find their products, these parties have been able to take the loss and continue the trade. 

At the pharmacy, seizures represent a similar challenge. The checks are random and have not fundamentally affected the supply chain.

Illustration depicting border forces overseeing medicine imports.
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Illustration: Lynn Atme

Oversight at the border

The Border Ports Authority, formed by a law passed in 2016, was tasked with curbing smuggling operations at the ports.

Before the authority, officials at the ports could give customs permits for 5,000 containers within six hours. The idea of the Border Ports Authority was to reform this practice.

The institution also seeks to match all the identification papers of the imported consignment before it is released to the beneficiary.

Illustration depicting border forces overseeing medicine imports with dots in the network connected.
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Illustration: Lynn Atme

But despite the establishment and work of the Border Ports Authority, seizures remain sporadic and largely down to luck.

If the individual agent happens to find fake or expired goods, it must be reported and the parties have no choice but to accept the seizure. But in many cases officials are believed to have allowed products through without randomly stopping and checking.

Any policy to reform the trade of medicine in Iraq must address the chain in its entirety, across borders and beginning with any international company which connects with a local representative prepared to make backroom deals and pay bribes to facilitate the trade. 

This is because even the chain of a small route from Basra to Baghdad extends beyond borders – not all the medicine stays in Baghdad, often some is sent to Syria and Lebanon. Political parties and armed groups stretching across the region are important in this trade as they deposit profits in bank accounts in Beirut and elsewhere in the region, and some dealer doctors and pharmacists have made deals with companies from countries such as Turkey and Jordan.

The story of moving medicine is not just the road that links Basra to Baghdad, it is a supply chain which is central to the conflict and violence within Iraq and has harmed many more of its citizens than the direct violence which often catches the attention of policymakers. For many Iraqis, their country is not ‘post-conflict’, despite being labelled as such.

This article was produced by Chatham House for the Cross-Border Conflict Evidence, Policy and Trends (XCEPT) research programme, funded by UK aid from the UK government. The views expressed do not necessarily reflect the UK government’s official policies.

*The names and some circumstances of the people described in this feature have been changed in order to protect their identities.