Pharmaceuticals are among the small number of products that Western companies can still sell to Iran under the sanctions program designed to deter its nuclear ambitions. The process, however, is complicated, lengthy and still not without risks. Novartis' ($NVS) Alcon unit acknowledged last year that federal authorities were investigating its sales there. But with the prospect of sanctions easing, drugmakers are sizing up the opportunities, and Merck KGaA and others intend to seize them.
Germany-based Merck ($MRK) told the Financial Times it is talking with Iranian companies about producing its diabetes drug Glucophage and its high-blood-pressure treatment Concor, looking for someone who can meet its quality standards. France-based Sanofi ($SNY), which licenses some cancer meds in Iran and maintains a staff of 170 there, plans to expand there in 2014. "It's a good, solid business," a spokesperson told the publication.
A final deal is not yet in place and not assured. Plenty of resistance remains in Congress to easing sanctions without a full nuclear capitulation from Iran. The provisional deal struck last month would keep the primary restrictions on Iran's oil industry and banking abilities in place, but between $6 billion and $7 billion in assets would be released. Pharmaceuticals, which have been hard for it to come by, is one category that Iran could spend the money on.
But as some drugmakers know, selling to Iran can be complicated, slow and still has risks. According to the Financial Times, Pfizer ($PFE) is still awaiting full payment on about $854,000 worth of drugs sold to Iran in 2011 which got caught up in the complex payment requirements. Novartis filed a special Iran Notice with the SEC last year indicating that its Alcon eye-care unit, which is based in Texas, is being investigated. The feds are looking at whether it violated sanctions against sales to Iran and other pariah nations. The company said a "grand-jury subpoena" asked for documents dating back to 2005.