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Sanctions Are No Medicine for the Iran-U.S. Standoff

Most Iranians would obviously be strongly opposed to war and the tortoise-paced path to diplomacy with the U.S. is of less concern than living day-to-day in a stagnant economic climate, where food prices become more and more expensive and basic medical needs are not satisfied.
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News of an insulin quota made a mother with diabetes anxious. The insulin shots now available came with thicker and more painful needles.

After a week of desperately searching pharmacy after pharmacy, a concerned uncle could only buy a critical injection for his niece's heart condition by purchasing it through a friend with a medical connection.

A cancer patient became even more distressed after not being able to continue chemotherapy treatment.

These are just some of the medical shortage stories that are endangering lives and creating a crisis situation in Iran. Medicines treating diabetes, cancer, heart disease, hemophilia, multiple sclerosis, and other life-threatening diseases are especially becoming harder to find.

Why is this happening? U.S. and E.U. sanctions on Iran.

Due to Iran's nuclear development program, in 2012 a new round of multilateral sanctions more directly targeted Iran's economy. Now, foreign banks are prohibited from financially dealing with Iran's main banks, including Central Bank of Iran and Bank Tejarat. Since the majority of Iran's medical industry is dependent on foreign imports, Iran is unable to produce self-sustaining amounts of medicine and medical equipment.

Shirin, a pharmacist working in Tehran said, "Iran cannot produce drugs. They just buy ingredients from China and India, and assemble it in Iran, just like cars."

Iran even has to import raw materials needed to produce medicines, and the Iranian produced drugs are usually lower quality than foreign brand equivalents. Iran also imports actual medicines from China and India, but the patented hierarchy of pharmaceuticals makes the Western brands superior.

Recently, the Iranian government also banned all subsidies to medical companies. This means that companies cannot purchase medicine with government dollars, and this scarcity of hard currency will further contribute to vital medicines being unavailable. Iran's currency issue, dependency on foreign imports, and financial transactions being blacklisted are the main reasons medical shortages are happening.

A recent study published by the International Campaign for Human Rights in Iran reported that the value of Iranian currency or the rial is in a constant state of decline and inflation has risen to about 50 percent. Due to inflation most medicines are now more than double the price.

"There are lots of drugs that are unavailable and more expensive than before. The situation is really a disaster," said Shirin.

In one case, a patient undergoing surgery could not attain a local anesthesia known as lidocaine. Some Iranians try to find medicines on the black market, or they bargain with pharmacies and pay more under the table. The number of Iranians who are not receiving proper medical treatment or have died as a result of not attaining medicine is so far unknown.

After more than 10 years of harsh economic sanctions imposed on Iraq, U.S. sanctions policy is certainly not a new tactic for dealing with authoritative regimes. Many academics, foreign policy experts, and activists are warning the international community about the harmful impact of sanctions on civilians and how this should not be repeated in Iran. Recently, the Iraq and Iran sanction cases were the topic of a panel at City University of New York.

Former UN Assistant Secretary-General Denis J. Halliday discussed how in Iraq a combination of economic sanctions and warfare caused more than half a million child deaths, deterioration of health care services, disease and malnutrition, water contamination and food shortages.

Dr. Joy Gordon's panel discussion focused on the ethical impact of economic sanctions, and she labeled the U.S.'s sanction regulations through the Office of Foreign Assets Control (OFAC) as both ambiguous and policed. OFAC allows humanitarian exemptions on medicine and food, but Gordon said that most foreign banks refuse to financially deal with Iran based on financial risk, reputation and misinformation on the issue.

As a former economist for Iran's Social Security Organization, Hadi Kahalzadeh provided insider information on Iran's medical industry. He had access to Iran's national pharmaceutical market reports in 2012, which stated that Iran spent $2.8 billion of the $3.5 billion whole value of the medical market on importing medicine and raw materials from abroad. Fifty-five percent of all drugs produced in Iran come from raw materials, and the other 45 percent come from imported medicines produced in the foreign market. Overall, this means that about 80 percent of Iran's medical industry was dependent on the foreign market.

"Right now, 80 different kinds of critical medicines are not available in Iran," said Kahalzadeh. The list of 80 drugs mostly treat cancer and other severe illnesses.

The medical shortage issue has much to do with the devaluation of Iran's hard currency or the rial. Kahalzadeh said the dollar is now about 3.5 times higher than the rial, when in the past the exchange rate was fairly equal between the dollar and rail. Kahalzadeh is currently a visiting scholar at Valdosta State University in Georgia, where he is researching the humanitarian impact of economic sanctions on Iranians.

Also at the panel, a founding member of the anti-sanctions political group Havaar discussed their petition campaign that targets international banks into financially dealing with Iranian pharmaceutical importers. The New York based organization takes critical stance against both the U.S. and Iranian governments

"Sanctions and the constant threat of military intervention by the U.S. and Israel target the very people who have already been struggling to live under a corrupt government that has mismanaged the economy and thwarted basic democratic rights. The resulting state of emergency in Iran has only strengthened the dynamics of black and informal economy, as well as, helped government officials that seek to crush popular movements under the pretense of defending national security," he said.

Although the economic sanction situation and Israel's military threats against Iran seem to be in a grim standoff with no diplomatic deal in sight, the recent pressure on President Obama for a policy game changer and the outcome of the national elections in Iran this June 14 could shift both U.S. and Iran policy in the future. With negotiations starting up again after Iran's elections, foreign policy experts see sanctions relief in exchange for further nuclear transparency from Iran as a possibility.

According to Jamal Abdi of the National American National Iranian American Council (NIAC), "The most straightforward would be for the White House to issue an Executive Order stating that humanitarian transactions are not subject to sanctions, including humanitarian transactions with sanctioned Iranian banks. This would open up necessary channels for medicine to be sold to Iran."

Abdi also said that the U.S. Treasury Department should provide private reassurances to pharmaceutical companies that there will be no financial repercussions for violating sanctions. This would put an end to the "chilling effect," where foreign banks choose to not trade with Iran even if humanitarian exemptions are permitted. NIAC continues to promote sanctions policy that will improve humanitarian aid channels and prohibit further isolation of Iran in the international community.

Recently, the New York Times reported that a group of bipartisan U.S. senators introduced tougher sanctions on Iran. The group proposes cutting Iran's access to an estimated $100 billion in foreign exchange reserves that would further contribute to Iran's economic seclusion and decline of the rial. This is just the latest development in the constant U.S. policy back and forth, and the most contested option is going to war with Iran.

Most Iranians would obviously be strongly opposed to war, and the tortoise-paced path to diplomacy with the U.S. is of less concern than living day-to-day in a stagnant economic climate, where food prices become more and more expensive and basic medical needs are not satisfied.

The mother with diabetes can only receive the insulin amount allotted by her insurance company, and the concerned uncle who found the injection for his niece recently took her to Shiraz for heart surgery. She is lucky to have received the medical care she needed. Other Iranians like the cancer patient who could not finish chemotherapy treatment are not as fortunate.

To Note: Due to security reasons with traveling back to Iran, some last names have been dropped or names have not been given.

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