Impact of exchange rate on imports of medicines and medical equipment

An increase in the exchange rate not only increases the price of import edgoods but also can increase the price of domestic goods. Due to the recent changes incurrency exchange rate sandin order to correctthe health sector management، this study isconducted to investigate the impacts of exchangeratesonimportsofpharmaceuticalproductsandmedicalequipment with an emphasis on the role of exchange rate changes during the period 1977-2010، using the autoregressive distributed lag (ARDL) bounds testing approach. The results show that the change of exchange rates has a significant effect on the imports of pharmaceutical products and medical equipment in the shortrun and the longrun. With respect to the real effective exchange rate (REER)، the short-run and long-run elasticityindexesof the import demand of pharmaceutical products are -0. 48 and -1. 13 respectively، and the short-run and long-run elasticityindexes of the import demand of medicalequipment are -0. 70 and -2. 18 respectively. The results indicate that the lack of protection from pharmaceutical industries and imports of medicines and medical devices against the recent increases in exchange rate will sharply decrease the imports of pharmaceutical products and medical devices. In addition to threatening the survival of pharmaceutical industries، this will endanger the public health.