According to a Novo briefing that Danwatch has accessed through a freedom of information request into the correspondence between Novo and the Danish Embassy in Tehran, Novo expects 9,2 million Iranians to have diabetes in 2040.
A very promising number for the world’s largest producer of insulin.
Jørn Fredsgaard, senior analyst at Danish Export Credit Institution (EKF) offering loans and guarantees to Danish export companies, explains why Novo was and still could be keen to do business in Iran.
“Iran is a giant market for Novo. Iranians have a sweet tooth, the country has a rather high BNP and a large middle class demanding western quality products”, Jørn Fredsgaard says.
The golden egg
And right from the start, ambitions were high.
One of the first steps was to set up an Iranian subsidiary fully owned by Novo Nordisk.
The new branch on Novos global company tree was named NN Pars, short for Novo Nordisk Iran, offices were established in the buzzing capital, Tehran and a lot of new employees were hired.
“Novo started out with just five people but expanded quickly. They hired all the brightest heads. All of their employees were doctors or PhDs ready to work for Novo for 600-800 dollars a month”, a source familiar with Novos initial operations in Iran says.
Right from the beginning Novos aim was to start up production in Iran.
The successful multinational pharmaceutical did not want to be just an exporter.
The aim was to supply advanced types of modern insulin.
With millions of diabetics and an increasingly unhealthy lifestyle Iran was a well chosen target for Novos usual strategy when conquering a new market.
Finding new friends
In 2012, Novo launched a serious charm offensive. A number of welfare initiatives were launched in line with the two-pronged approach that Novo usually uses to enter a new market offering the cure as well as the remedy as Lars Thøger Christensen, a branding expert at Copenhagen Business School explains it.
The message to the Iranian public and politicians shows clearly in a Novo presentation that Danwatch and Zamaneh have accessed through a freedom of information request at the Danish Embassy in Tehran.
In the presentation Novo offers to assist Iran in teaching a healthier lifestyle to curb the explosion of new diabetes cases among the younger generations while at the same time providing access to Novos high quality medicines to the millions of already sick Iranians.
“Our response to defeat diabetes in Iran”.. is to “raise awareness of diabetes, support people with diabetes by improving access to information and support and unite stakeholders for action” the presentation reads.
One of the popular initiatives is the Novo-colored diabetes busses launched in Tehran in august this year and later on in five other areas teaching ordinary Iranians to deal with the danger of diabetes or the illness itself.
“Novos commitment to people living with chronic diseases goes beyond providing lifesaving medicines,” as Novo head of communication Charlotte Zarp-Andersson explains in an email.
A diabetes call center for patient education was also launched as well as free of charge educational programmes for nurses and doctors and a sponsorship for the yearly International Diabetes Day event.
All in close cooperation with the Iranian Ministry of Health, the Municipality of Tehran, the Iranian Diabetes Society, the International Diabetes Federation and later also with the University of Tehran.
As professor Lars Thøgersen from Copenhagen Business School explains, the strategy of Novo is a carefully crafted and well rehearsed recipe designed to support the image of a responsible business partner in the fight against a common enemy.
“Novo always engages in these kinds of activities, raising awareness about obesity, diabetes and so on. It is part of a long term strategy making the company appear more sympathetic when engaging in awareness, education and research”, Thøgersen, a specialist in corporate branding, says.
“As a modern company Novo knows that it is important to show responsibility. It is part of the company DNA”, he says, underlining that this approach to image building and sales efforts go hand in hand.
“Of course, Novo will be promoting its products to patients, health care professionals and politicians at the same time. It is part of the package”, he says.
A perfect fit
Novo found friends in many places.
Among them hundreds of thousands of Iranian patients eager to access high quality products like Novos modern insulin pens offering safe, precise and long lasting blood sugar stabilizers, as well as rapidly working insulin to inject with easy to use pens just minutes before a meal.
Among professionals, Novo came to present a gateway to the West, to doctors and researchers longing to meet western colleagues after decades of isolation due to sanctions, sources familiar with Novos business in Iran say.
Jørg Fredsgaard from Danish Export Credits explains the attraction of Novo like this:
“Iranians have been cut off from European and American products for many years and they have a penchant for quality which may not be what they usually get from China. Iran has a large middle class who are educated in the West and demand Western products, so in this respect, Novo was a perfect fit.”
Getting close to the Ayatollah
And Novo certainly made a lot of new customers and friends along the way introducing its products to hundreds of thousands of Iranian patients and professionals.
To put Novo firmly on the national horizon, large scale conferences were held, bringing top representatives from the internationally isolated country in contact with the outside world.
Among the prestigious initiatives was the 2015 International Diabetes Leadership Forum in Tehran gathering international organisations, patient organisations, healthcare professionals, people with diabetes, NGO’s, media and very importantly also Iranian policy-makers and government officials.
The aim was “to discuss solutions to the burden of diabetes in Iran and worldwide” as Novo puts it in an email to Danwatch and Zamaneh.
Novo also entered into a strategic partnership with the Endocrinology and Metabolism Research Institute at Tehran University, headed by professor Bagher Larijani, one of five very influential brothers belonging to the absolute top echelon of public and political life in Iran.
According to a source familiar with the cooperation Novo donated one million dollars to the Endocrinology and Metabolism Research Institute at Tehran University. The exact figure is not publically available and Novo refers to contract confidentiality.
Associated with the Larijanis
The alliance however brought Novo in close contact with some of Iran’s most powerful people. Bagher Larijanis himself used to be a deputy minister in the Ministry of Health, one brother is a speaker of parliament and another a former vice minister of foreign affairs,now adviser to the Supreme Leader Ali Khamenei.
A third brother, Sadeq Amoli Larijani, who was then head of the judiciary and directly responsible for human rights violations, among them “arbitrary arrests of political prisoners, human rights defenders and minorities” which “increased markedly” since he took office, according to a EU decision sanctioning him.
As Head of the Judiciary Larijani “personally signed off numerous death penalty sentences, contravening international standards, including stoning, .. and public executions such as those where prisoners have been hung from bridges.” the EU decision reads.
“He has also permitted corporal punishment sentences such as amputations and the dripping of acid into the eyes of the convicted. Since Sadeq Larijani took office, arbitrary arrests of political prisoners, human rights defenders and minorities have increased markedly.”
In late 2018, Sadeq Larijani took over as head of Iran’s Expediency Council the top ruling body directly under the control of Ayatollah Ali Khamenei and has been mentioned as a possible successor to the 81-year old Ayatollah.
In spite of US and EU sanctions against Sadeq Larijani, Novo entered into a partnership associating itself with the Larijani family.
Economist Mahdi Ghodsi from Vienna Institute for International Economic Studies is an expert on Iran. He explains the importance of the alliance.
“Having business relations with someone like Bagher Larijani, whose family was at that time chairing the parliament and the judiciary in Iran should be quite beneficial and might reduce investment costs for Novo”, he says.
Neither CEO of Novo Nordisk, Lars Fruergaard Jørgensen, or vice CEO of NN Pars, Ali Mostofi, has been willing to answer questions about Novos business partners in Iran.
In a written statement, head of communication Charlotte Zarp-Andersson doesn’t answer questions about Novo Nordisk’s connection to the Larijanis. She does however defend the cooperation with Bagher Larijani’s institute, stressing the legality of the partnership.
“Before entering any agreement with external partners including donations, we conduct a thorough due diligence on the organisations. In addition, throughout the partnership we continuously monitor and follow up to ensure that all rules and legislation are followed”, she says, referring to “non-disclosure obligations” as the reason for not disclosing the amount donated to the institute.
The big leap
When Iran signed the nuclear deal with the European Union and the US in may 2015 Novo was ready for the big leap.
Novo Nordisk had found a new cooperation partner ready to make the plan of establishing its own production in Iran come true.
The idea of setting up a factory was presented to the Iranian government already in 2012 and they liked it, a source with knowledge of the negotiations says.
And then three years later lobbying had paved the way for Novo to be the first international pharmaceutical company to set up its own production in Iran.
“It is a political priority of the government that production should be local. Since the Iranian Revolution, it’s been the policy and international sanctions against Iran have made it an even higher priority”, another source involved in the deal explains.
So smiles were big when then CEO Lars Sørensen and the Iranian Food and Drug Administration signed a Memo of Understanding at a widely reported ceremony giving Novo Nordisk permission to build a brand new factory producing insulin pens for the Iranian market, an important step in making Iran less dependent on foreign import.
Novo promised to invest 70 million euro (half a billion Danish kroner) providing at least 160 direct jobs for well educated Iranians and an in-house insulin production according to a Novo presentation accessed through a Freedom of Information Request to the Danish Embassy in Tehran.
It was a golden moment of common interest.
“Everyone wanted to show that surely foreign investment was coming. In that way Novo’s factory was a showcase,” a source with knowledge of the deal says.
Professor Akbar Abdollahiasl from Tehran University’s Department of Pharmacoeconomics confirms the common interests involved.
“One of the main objectives of the Iranian Ministry of Health is the protection of domestic production of medicine. In this case, Novo has sustained its policy by establishing a manufacturing plant in Iran,” he says.
Danwatch and Zamaneh have asked Novo Nordisk to reveal the details of its agreement with Iran but the company declines.
The advantages for Novo are quite obvious, as the factory establishes the company firmly on the ground in Iran providing Novo with a perfect base for selling its advanced insulin products to the Iranians.
And in the long run maybe also a bridgehead for further export to neighboring countries, facing similar problems with diabetes.
“Novo’s goal is to introduce expensive products to the Iranian market. The new insulin types, or modern insulin types are much more expensive than the old types, and the profit is higher”, a source with knowledge of Novos products and the Iranian market says explaining that demand for high quality western products is high in Iran.
“They are a lot safer, have a better effect and are much easier to use than the old types, so many iranians prefer using Novo pens once they have tried them,” he says.
According to information from Novo more than half a million Iranians are depending on Novo medicines today.
Sleeping with the enemy
For Novo the agreement with the Iranian government in late 2015 was a point of no return.
And the management already had its eye on a favorite spot for the new factory.
The seemingly ideal place to build was Barkat Pharmaceutical Town, a new industrial zone under construction outside the small town of Kordan an hours drive west of Tehran.
Here the Iranian Barakat Pharmaceutical Company was establishing an industrial powerhouse for developing and transfer of pharmaceutical know-how to Iran according to its online presentation material.
Less than a year after the agreement with the Iranian government was done Novo bought four hectares of developed land from Barakat Pharmaceutical Group at a price never disclosec .
It all seemed fine had it not been for Barakat being part of the controversial Setad organisation, controlled by Ayatollah Khamenei and accused of systematic landgrapping from ordinary Iranians opposing Iran’s religious system.
According to a thorough investigation carried out by the reputable British news agency Reuters Setad-e Ejrây-ye Farmân-e Emâm, also known as the Executive Headquarters of Imam’s Directive or EIKO was and still is an Iranian multi billion dollar business conglomerate built with money from land confiscation.
Since its establishment in 1989 Setad has systematically confiscated land and property belonging to dissidents, religious minorities, political prisoners and Iranians who have fled the country citing a special decree that gives the organization exclusive rights to manage so called “abandoned” land and property.
The Reuters investigation estimated that in 2013 the Setad business empire held assets worth at least 95 billion dollars – at the time of the investigation this amount was 40 percent more than the total oil export of Iran.
No estimate has been done since, and as the Setad business empire is directly under the control of Ayatollah Khamenei, it is by law exempted from any independent or parliamentary oversight. Hence no independent information on the organisation’s economy is publically available.
As the Reuters investigation shows translating the original decree, Setad was established with the sole purpose of confiscating land and property belonging to people or entities not recognized by the Islamic government of Iran.
Since Ayatollah Ali Khamenei took over as Supreme Leader in 1989, the organisation has slowly morphed into this gigantic network of interlinked companies of which Barakat Pharmaceutical Town is just one small corner.
But the confiscation of land and property continues as one recent case shows. In mid May 2020, the Iranian human rights network HRANA reported that Setad had confiscated a house and shop belonging to a couple who are political prisoners.
According to a report by the US funded exile media Radio Farda, Fatemeh Muthanna and Hassan Sadeghi had their property confiscated in connection to a joint prison sentence of 30 years on a charge of “waging war against the state by working with an opposition group,” the Human Rights News Agency HRANA reports.
The couple lost their family home where they were living with two children and Mrs. Muthannas 89-year old mother, according to Radio Farda.
In another recent case, property belonging to an entire village was confiscated by Setad.
According to the international organisation of the Baha’i religious minority, an Iranian court ordered the confiscation of all properties belonging to Baha’is in the village of Ivel some 400 km northeast of Tehran.
The Baha’i is an unrecognized religious minority in Iran that is teaching the essential worth of all religions, and the unity of all people. The Baha’i are considered heretics by the Islamic republic and with their spiritual headquarter situated in Haifa, Israel, Bahais have been subjected to continued persecution by the Iranian government since the Islamic revolution in 1979.
According to the court order dated november 2019, the justification for confiscating the properties is that Baha’is have “a perverse ideology” and therefore the court finds “no legal merit” for leaving the properties in the possession of the “perverse sect of Baha’ism in the village of Ivel.”
Tara Sepehri Far, Iran researcher at Human Rights Watch, confirms that religious groups like the Baha’i are being discriminated against and feel targeted by Setad.
“Setad has the mandate to take over property and in many cases it happens without due process “ she says.
“One of the groups that face bureaucratic obstacles that result in losing land, property or businesses are the Baha’i. The official reason given is often a missing permit or another kind of bureaucratic problem, but the Baha’i definitely feel discriminated against by Setad,” she says.