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Novo Nordisk to build manufacturing plant for FlexPen in Iran

Published on 22/09/15 at 10:38am

Novo Nordisk has announced that Novo Nordisk Iran and the Food and Drug Administration of the Islamic Republic of Iran have signed a Memorandum of Understanding committing Novo Nordisk to build a local manufacturing plant for FlexPen prefilled devices in Iran. 

The project is expected to last five years and represents a Novo Nordisk investment of approximately €70 million. Novo said the production would comply entirely with Good Manufacturing Practices (GMP), which will ensure the quality and reliability of the products. 

Ole Moelskov Bech, corporate vice president of Novo Nordisk Business Area Near East, says: "We are happy to commit to this manufacturing facility in Iran. It signals our long-term commitment to Iran, a country where close to five million people have diabetes, according to the International Diabetes Federation. This investment will ensure availability of our modern insulins and will bring us a step closer to the people who rely on our products"

With construction of the new facility, Novo Nordisk will create 160 jobs, adding to the around 130 people the company already employs in Iran.

Y.S. Shashidhar is partner and managing director, South Asia, Middle East and North Africa, at Frost & Sullivan, a company that advises corporations on their global growth strategies.

He believes that with an increasing prevalence of diabetes in Iran, the benefits of cheaper production in the nation, Novo’s strategy makes perfect sense: “With around 9% of the population suffering from diabetes, Iran represents a huge market for insulin,” he comments. “In fact, over the last few years the number of diabetic patients has been increasing at a CAGR of around 15-16%.

Presently, around 65-70% of the insulin requirements are imported into Iran, so it makes absolute sense for manufacturers to explore setting local manufacturing facilities to cater to this huge market. Foreign entities should in fact explore tie ups with local manufacturing facilities and groups in order to gain access to the local distribution network. The government is also providing tax exemptions for setting up pharma units that can cater to the local demand as well as focus on export markets, as Iran is pushing to be a major player in the regional market.

Insulin currently represents only 2.7% of the total pharma expenditure in Iran. The price advantage of domestic production vis-a-vis imports of insulin is almost 2.5 times, and this is also another reason for foreign companies to explore setting up local manufacturing facilities.

The proposed Novo Nordisk plant - which is likely to commence production around 2020 - will target the local population first, to then target exports to cater to the regional demand.” 

Yasmita Kumar

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