Beyond oil and drugs: how the war in the Middle East is affecting the pharmaceutical market

Military actions in the Middle East have led to tremendous economic disruptions worldwide. The Strait of Hormuz has been closed for three weeks—a route that carried not only oil, gas and fertilisers but also pharmaceutical products from the Gulf states. The first country to raise the alarm in anticipation of shortages was the United Kingdom. Russia receives a limited range of pharmaceutical products from Iran, so there will be no catastrophe, but the situation is far from favourable.

A week ago, Reuters reported that the conflict in the Gulf was already disrupting flows of vital medicines, jeopardising supply routes for cancer drugs and other temperature‑sensitive pharmaceuticals. Cargo that used to pass through the Persian Gulf is now being rerouted around Africa via the Cape of Good Hope. This adds at least 15 days to delivery times. Prices are also rising: shipping lines have increased freight rates by at least 30%, by $1,500–2,000, even for containers already at sea, thereby placing consignees in an impossible position.

Major regional air hubs—Dubai, Abu Dhabi and Doha—have temporarily suspended operations or reduced activity. These cities are key centres for air freight between Europe, Asia and Africa, particularly for the transport of medicines requiring strict temperature control.

The UK has so far managed to avoid drug shortages linked to the war in the Middle East, but the sharp rise in transport costs is squeezing the margins of generic manufacturers and could soon lead to price increases, supply shortages, or both, warned the trade group Medicines UK. The group represents manufacturers and suppliers of generic and biosimilar drugs, which account for 85% of prescriptions dispensed by the UK’s National Health Service (NHS).

The group’s chief executive, Mark Samuels, stated that the UK was “one step away” from drug shortages if the situation in the Middle East persists, and that existing stocks provide only temporary protection.

Generic drug manufacturers have been hit hard by rising transport costs and delivery disruptions. These products account for the majority of medicines supplied to the UK’s National Health Service. If transport costs remain at current levels, manufacturers may be unable to absorb them.

“If the conflict persists for a long time, manufacturers will no longer be able to cope with the costs, and that will lead either to price increases for the National Health Service or to supply shortages,” Samuels told Reuters.

According to him, off‑patent drugs are particularly vulnerable because, unlike patented products, their margins leave no room to absorb higher transport costs.

Around 55% of generics in the UK cost less than £1 ($1.34) per month’s supply. Transport costs represent a substantial portion of the price, increasing the risk that some products may become unprofitable and jeopardise supply.

While lost volumes of generics can be replaced with drugs from other countries, the situation with plasma is more challenging.

“Europe is heavily dependent on plasma supplies from Iran, both for blood plasma and for plasma used to produce anti‑D immunoglobulin,” noted Nikolay Bespalov, Director for Development at the analytical company RNC Pharma. Iran is among the top 10 largest suppliers of blood plasma in the world and is regarded as a high‑quality producer; this is a very significant loss for Europe, the expert reminded.

Russia receives only three drugs from Iran: SinnoVex (interferon beta‑1a, used for multiple sclerosis), Arioseven (eptacog alfa, a blood clotting factor used for haemophilia), and Melitide (liraglutide for type 2 diabetes mellitus).

“For all of them there are at least several alternatives, including those of Russian origin that are manufactured in full cycle in our country,” Nikolay Bespalov emphasised.

According to the company’s data, SinnoVex accounted for approximately 28·5% of the total physical volume in 2025. The Russian company Biocad supplies 71·4%, manufactured in full cycle including the pharmaceutical substance. For eptacog alfa in 2025, the Iranian Arioseven accounted for about 20%, while the main volume—80%—was provided by SGBiotech, which is also fully produced in Russia. The share of Melitide is around 40%, but Promomed would cover the difference if this volume were lost.

“Nevertheless, in all three cases we are talking about fairly substantial volumes, and their loss bodes nothing good for the market; in any case, it carries risks of interruptions in drug supply,” Bespalov concluded.