Industries · Pharma & Healthcare
Pharmaceutical & Healthcare Industry
The pharmaceutical and healthcare industry is one of the most vital economic and social sectors, directly tied to the health security of the population.
Industry Overview
Why Abtin Financial Advisors Group?
The pharmaceutical and healthcare industry is one of the most vital economic and social sectors and is directly tied to public health security. Sanctions and financial restrictions have disrupted imports of raw materials (APIs) and medical equipment. In such conditions, smart financial management, investment in R&D and the use of AI in the supply chain are especially important.
View All IndustriesVision
To become a global reference in corporate governance, assurance and risk management advisory
Mission
To create long-term value for clients, shareholders and society through effective corporate governance systems
Challenges
Challenges of the Pharmaceutical and Healthcare Industry
Shortages of some vital medicines due to import disruptions
Rising drug prices and pressure on patients and the healthcare system
Dependence on foreign raw materials
Weak innovation and development of biotech drugs
Solutions
Solutions
Multi-source supply: long-term contracts with Asian suppliers.
Creating pharmaceutical R&D and VC funds to develop raw materials domestically.
Using humanitarian financial channels to import vital medicines.
AI for forecasting shortages, drug design and production optimization.
Opportunities
Opportunities
Developing the biotech industry and domestic production of raw materials.
Exporting generic drugs to countries in the region.
Digitalizing the healthcare system and developing HealthTech.
AI-driven telemedicine and patient data analytics to improve care.
Case Study
Case Study
An Iranian pharmaceutical company launched its own raw material production line with the help of a domestic VC fund. Using AI in quality control cut production errors by up to 30 percent.
30%Fewer production errors by applying AI in quality control
Financial Challenges
Financial Challenges in the Pharmaceutical Industry
Because of their complex production cycle and operations, capital-intensive manufacturing and long collection periods, pharmaceutical companies constantly face liquidity and high working capital challenges. These challenges intensify under the central bank’s contractionary policies and can lead to:
- Reduced access to credit lines and bank facilities
- Higher credit risk and overdue debts
- Bankruptcy, forced mergers or closure of some companies
- Disruption in the supply of raw materials and the drug supply chain
As a result, companies lose the ability to meet their short-term obligations, and investors and credit providers are exposed to risk.
Liquidity Crisis
The Liquidity Crisis and the Path to Financial Recovery in the Pharmaceutical Industry
01
The state of liquidity and working capital in Iran’s pharmaceutical industry
In recent years, the central bank’s contractionary policies aimed at controlling inflation and limiting liquidity have deeply affected manufacturing industries, especially the pharmaceutical industry, which is more sensitive because of its complex raw material supply and operations. Economists and industry players see the sector’s liquidity crisis as a direct result of limited access to bank funding and liquidity. Pharmaceutical companies have even struggled to pay wages and sustain day-to-day operations.
The liquidity crisis in the pharmaceutical industry has several mutually reinforcing causes:
- A shortage of credit and working capital among pharmaceutical companies and raw material importers;
- An inability to secure the foreign currency needed to import drugs and raw materials, and insufficient currency allocation;
- The central bank’s contractionary policies, which have limited companies’ access to credit lines;
- A long cash cycle from production to sale and collection, which has increased pressure on working capital.
02
Central bank support policies and implementation challenges
The central bank has taken several measures to support the pharmaceutical industry:
- Granting bank facilities for raw materials and working capital of considerable value (for example, 50 trillion tomans in facilities to address the liquidity problems of pharmaceutical plants);
- Allowing foreign currency debts of up to 200 million euros to be paid using instruments such as GAM securities;
- Extending currency supply guidelines in exchange for accepting GAM securities for drug importers.
Despite these measures, much of the liquidity companies need has not been provided or currency and credit allocation has been heavily delayed, and working capital, liquidity and credit risk problems persist.
03
Consequences of the liquidity crisis and credit risk in the pharmaceutical industry
The liquidity crisis and contractionary policy have created several fundamental challenges with serious consequences for companies:
Higher financing costs and limited access to loansCompanies are forced to accept higher costs or less liquidity.
Supply chain disruptionDelays in importing raw materials and equipment reduce production and increase storage costs.
Pressure on patients and pharmaciesEven drug distribution and collection of receivables across the pharmacy chain have slowed.
Higher credit risk and overdue debtsCompanies struggle to repay debts and meet bank obligations, which can lead to bankruptcy, mergers or closure.
04
Abtin’s role in financial recovery and liquidity management
With an analytical, systematic and strategic approach, Abtin can help pharmaceutical companies emerge from the liquidity crisis and build stable credit conditions:
Building a diversified portfolio of funding sources
Abtin conducts a comprehensive analysis of internal and external funding sources, including:
- In-house budgets
- Traditional bank facilities
- Commitment-based instruments such as GAM securities and participation bonds
- Institutional and private investment financing
This approach lets companies reduce the risk of relying on a single funding source and use sources with a lower cost of capital.
05
Expected achievements and outcomes
By implementing Abtin’s solutions, pharmaceutical companies can achieve:
- Stable liquidity and working capital
- Rebuilt bank credit and stronger creditworthiness
- Lower financing costs and greater financial flexibility
- Better risk forecasting and rapid response to financial crises
Conclusion
Conclusion
The liquidity crisis in Iran’s pharmaceutical industry is not only the result of a shortage of funds and foreign currency, but also of the central bank’s contractionary policies and the complexity of companies’ operating cycles.
Through a comprehensive analysis of funding sources, working capital optimization, cost of capital control and the design of financial forecasting and monitoring tools, Abtin can help companies overcome the crisis, rebuild their credit and return to sustainable growth.
Abtin’s Role
The Role of Abtin Financial Advisors Group
Designing financial instruments to fund R&D and drug production.
Implementing AI-based financial management in the drug supply chain.
Internal audit to bring transparency to imports and resource use.
Training pharmaceutical finance teams in liquidity management and currency risk hedging.
Developing dedicated AI tools to forecast drug shortages and analyze treatment costs.
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