Prices of medicines, medical equipment and healthcare services in Iran have surged by around 70% following the government’s removal of the subsidized exchange rate for drug imports, domestic media reported on Monday.
The Daroyar reform plan, launched to offset price hikes through insurance coverage, has failed to meet its target, leaving patients to shoulder the cost, news outlet Rouydad24 said.
Rising foreign exchange rates, reduced liquidity among importers, and broader inflation have deepened shortages in hospitals and pharmacies.
Analysts say the crisis is worsened by budget shortfalls in social insurance funds and the influence of monopolistic drug networks, which are accused of hoarding and speculative pricing.
Lawmakers have warned that continued price spikes could spark public anger and further strain Iran’s already fragile healthcare system.
Foreign currency squeeze
Last month, a leading pharmaceutical industry figure, Mojtaba Sarkandi, told the reformist daily Etemad that Iran faces inevitable production disruptions and severe drug shortages by March, as renewed UN sanctions under the snapback mechanism tighten access to foreign currency and strain supply chains.
“The industry operates on two realities,” Sarkandi said. “While up to 99% of medicines are locally produced, most key ingredients still come from abroad, mainly China and India.”
According to Etemad, Tehran allocated about $3.4 billion in foreign currency for medicine and medical equipment this year, but a 10–20% shortfall has already emerged. Shipping and insurance costs have climbed by as much as 50% since September, and import timelines have doubled to six months.
While sanctions have limited Tehran’s ability to finance imports, industry executives also blame policy missteps, from delayed currency allocation to state-imposed price caps, for deepening the turmoil.
“Sanctions may explain 40% of the crisis,” one executive told Etemad. “The rest stems from domestic policy failures, arbitrary pricing and poor transparency.”
Kaveh Madani, Director of the United Nations University Institute for Water, Environment and Health, told Fox News Digital that the crisis was the culmination of decades of environmental mismanagement and overexploitation of resources.
“The water bankruptcy situation was not created overnight,” he said. “The house was already on fire, and people like myself had warned the government for years that this situation would emerge.”
Iran is now facing one of its most severe shortages in decades, with major reservoirs and dams nearing depletion.
Of the five dams supplying Tehran, one has run dry and another is operating at below 8% capacity, according to recent reports. The energy ministry has already announced evening water cuts to refill reservoirs and urged households to reduce consumption by 20% to avoid mandatory rationing.
“The symptoms were already present, and now the flames are undeniable,” Madani said. “We are discussing Day Zero, when the taps would run dry in Tehran and other cities once immune to shortages.”
He described the situation as the product of “decades of mismanagement, worsened by prolonged drought and climate change,” warning that the ecological collapse was now threatening national security.
“When people are out of water and electricity, you face domestic and national security problems that even Iran’s enemies, not even President Trump or Prime Minister Netanyahu, could have wished for this to happen,” he said.
Ripple effect
Madani warned that the crisis could have a ripple effect on Iran’s energy and nuclear infrastructure, which depends on stable power and water supplies.
“If water and electricity shortages persist, any nuclear program would also be impacted,” he said. “Lack of rain means less hydropower generation, leading to both water and power outages.”
He added that the government’s continued defiance of Western powers and its resistance to reform had compounded the environmental strain.
“If they want to stick to their ideology and fight with the West, they must use their natural resources and burn them,” Madani said. “So if there is no water, there is less resilience and less capacity to resist.”
The crisis, he said, is being aggravated by renewed international sanctions and economic isolation.
“There were already sanctions in place, imposed by the United States, and there were also Security Council sanctions that, as you know, have been reintroduced,” he said.
“Iran is in resistance mode, and remaining in this mode means increased pressure on Iran's ecosystem, natural resources, and water, but it also means heightened concerns about food insecurity issues and dependence on food imports.”
Madani concluded that Iran’s water crisis has become a national emergency with global implications.
“This water bankruptcy weakens Iran on the world stage,” he said. “If there is no water, there is less resilience and less capacity to resist.”
