The government ignored a top health official’s warning against greenlighting a lucrative vaccine developed by a firm close to Ayatollah Khamenei
But the vaccine had influential backers. It was the highly touted project of a company called Barkat, part of a sprawling corporate empire close to Iran’s supreme leader, Ayatollah Ali Khamenei.
Less than a week later, Health Minister Saeed Namaki announced that the vaccine had received emergency approval. At the time, Barkat had not even begun its Phase 3 clinical trial, meant to confirm the vaccine’s effectiveness and identify possible side effects, Iranian researchers later reported in a medical journal. That trial started two days later, the researchers said. The results are still not public.
In approving Barkat’s vaccine, the government demonstrated how a largely unaccountable Iranian state often pursues policies that benefit those connected to the regime, speciously identifying the Iranian elite’s interests with those of the public. But rarely had the stakes been higher. At the time, Iran was suffering the Middle East’s worst coronavirus outbreak and was on the brink of its deadliest wave yet.
Government officials cut corners to expedite a yet-unproven vaccine that would be highly profitable for Khamenei’s favored conglomerate, financial documents show, even as the supreme leader barred the import of some Western-made vaccines, and as imports of other vaccines encountered delays. Yet another vaccine being partly developed in Iran had also been moving toward regulatory approval, but the Barkat vaccine leapfrogged to the front of the line, according to government and company documents.
Over the following year, Barkat would fall short in delivering the millions of vaccine doses it had promised. Though a top executive had told Khamenei in a letter that more than 50 million doses would be available by last September, only half that amount had been produced by early this year, according to a company disclosure. While there is no evidence that the Barkat vaccine was harmful, its impact on the pandemic has been minimal. Most Iranians who have been vaccinated ultimately received Chinese vaccines.
Despite the lackluster performance, Barkat received about $100 million from the government over a 12-month period, and the company’s net profits in the most recent year on the Iranian calendar nearly doubled compared with the previous year when adjusted for inflation, according to company disclosures. The Barkat subsidiary that manufactured the vaccine saw its net annual profits explode to more than 20 times the level of the previous year.
This article is based on two dozen interviews and hundreds of pages of financial and regulatory documents, which revealed new details about payments that Barkat made to government officials who served on its board and to other businesses close to the regime.
Barkat financial statements and disclosures reviewed by The Washington Post reveal that the company within days of the vaccine’s approval compensated its board of directors, including two members who also served as government officials overseeing Iran’s coronavirus response and helping shape public policies to address the pandemic. Experts in Iranian corporate governance said company directors typically stand to gain — through larger bonuses and an appreciation in the value of any shares they hold — when firms increase their profits. But it is not clear from Barkat documents whether this practice was followed by the firm in this instance.
As part of the vaccine project, Barkat also gave business to two firms that have worked closely with Iran’s Islamic Revolutionary Guard Corps, the powerful military force close to Khamenei, The Post’s review of documents revealed.
Najafi, an epidemiologist and medical doctor, had pointedly warned against letting improper financial influences corrupt the vaccine review process. In his letter to the health minister, Najafi had stressed the importance of ensuring that the vaccine approval was free of parochial interests, explicitly warning that decision-makers should have no “economic/financial conflicts of interest.”
Barkat executives and current and former Health Ministry officials declined or did not respond to interview requests and questions sent via email and social media.
But in public statements, company executives and government officials have defended the vaccine, saying that Barkat contributed to Iran’s fight against the coronavirus in the face of harsh economic sanctions and that the vaccine went through a rigorous development process. “The reality is that people’s health is our first priority,” Barkat board member Hamidreza Jamshidi told reporters last August.
Iran was one of the first countries outside China to face a significant coronavirus outbreak in early 2020 and the first in the Middle East. Hospitals were soon overwhelmed with the sick and dying. Iranians criticized their government for underplaying the pandemic and accused officials of covering up the real death toll.
U.S. economic sanctions on Iran made some of its efforts to fight the virus more difficult. While the sanctions include humanitarian exemptions, a report by Human Rights Watch in 2019 found that efforts to banish Iranian banks from the international finance system, paired with aggressive rhetoric by the Trump administration, had made many international banks fearful of facilitating trade even in humanitarian goods.
To tackle the virus, Iranian officials sought to obtain foreign-made vaccines in part by joining Covax, an initiative set up by the World Health Organization, the Gavi vaccine alliance and other international groups to try to ensure equitable access to vaccines for poor and middle-income countries.
Iran’s nonprofit and private sectors, meanwhile, moved to secure vaccines outside of Covax throughout 2021 but faced repeated obstacles. Khamenei, for instance, announced a ban on the import of American- and British-made vaccines, ruling out the American-made Pfizer and Moderna doses.
As the Iranian state was slowing, or altogether blocking, vaccine imports, domestic research was ramping up.
The most prominent Iranian vaccine project was carried out by a conglomerate with a Persian name that translates to Headquarters for Executing the Imam’s Order, also known as Setad. Its origins lay in a 1989 edict issued by Ayatollah Ruhollah Khomeini, founder of the Islamic Republic of Iran and Khamenei’s predecessor as supreme leader. Khamenei handpicked Mohammad Mokhber to be Setad’s chief executive in 2007.
The company gained much of its initial wealth by confiscating the properties of ordinary Iranians, according to a 2013 investigation by the Reuters news agency. Setad has also entered into a range of businesses, purchasing stakes in lucrative Iranian industries. Barkat, Setad’s drugmaking arm, holds a 14 percent share of the Iranian pharmaceutical market, according to a Setad website.
“The supreme leader has absolute power over what he can do with all those assets and funds owned by Setad,” said Mohammad Nayyeri, a law lecturer at the University of Kent in Britain who represented Iranians whose property was targeted by Setad for confiscation.
Setad executives did not respond to questions sent via email.
In December 2020, Mokhber donned a hooded Tyvek coverall and visited a pharmaceutical facility belonging to Shifa Pharmed, the Barkat subsidiary charged with producing Setad’s vaccine. He said that Setad would, within six months, be able to make 12 million doses monthly. “The Iranian coronavirus vaccine will be no less than vaccines made in other parts of the world, and the vaccine made by Setad scientists will have almost the fewest side effects,” he said. At that point, the vaccine hadn’t even been tested on humans.
In March of the following year, Mokhber said the company was now prepared to mass-produce the vaccine. “We promise to the beloved Iranian nation that in 2½ months, we won’t have to worry about vaccine shortage in this country,” he said.
Iranian officials portrayed this endeavor as a point of national pride that would catapult Iran into an elite group of scientifically advanced countries. After the government’s troubled response in the early days of the pandemic, much of the Iranian media devoted wide and favorable coverage to Barkat’s project.
“There’s a desire to record a win for the supreme leader,” said Amir Afkhami, a professor and expert on Iranian public health at George Washington University. “On top of that, there’s a financial gain and the financial power and the revenue stream that Setad provides for Khamenei.”
Iran has a history of vaccine production dating to early in the 20th century. But there was reason to doubt the country’s ability to quickly produce vaccines, according to public health officials and experts.
Barkat, in particular, had minimal experience in vaccine research and production, according to regulatory and financial records, company product lists and officials. The company’s vaccine track record was primarily limited to filling vials with imported doses for immunizing children.
And Shifa, Barkat’s subsidiary, appears to have had no experience in vaccines before 2020. Other than for its coronavirus vaccine, Shifa has registered no vaccine trials in Iran, according to Iran’s clinical trial registry database.
In 2020, Shifa tried to raise its game by recruiting Minoo Mohraz, a prominent Iranian scientist known for her work on HIV/AIDS in Iran. “I accepted because I wanted to tell Iranian people that this vaccine is safe,” Mohraz said in an interview with The Post. “Also, this [was] the first vaccine of this company. … This was the first vaccine that they were going to make.”
The Barkat vaccine, however, was not the only one in development for the Iranian market. The Pasteur Institute of Iran, an independent partner of the storied French biomedical research organization, had teamed up with Cuba’s prestigious Finlay Institute on a project. Their vaccine entered small-scale clinical trials in Cuba in late 2020, and as testing progressed, this Cuban-Iranian effort consistently remained ahead of Barkat, according to a review of the clinical research timelines.
By early June of last year, both Barkat and Pasteur had asked Iran’s Food and Drug Administration for emergency approval of their vaccines.
Mohraz publicly urged the agency to approve Barkat’s vaccine. “We provided the results of the studies of these vaccines a long time ago to officials and we asked them for emergency use, and we are hopeful that this step will be taken all the sooner,” she said in comments reported by the Iranian media.
A day later, Najafi, the deputy health minister for research and technology, sent his letter to the health minister. Najafi noted that neither institution had submitted Phase 3 trial data to regulators and that Barkat had not even submitted most of its Phase 2 data. He warned that approving the vaccines without sufficient scientific evidence was perilous because it could undercut public faith in immunization.
“The risk of skepticism or opposition to coronavirus vaccines and other vaccines in the long run should not be overlooked, and if a significant percentage of the population refuses to be vaccinated when sufficient vaccines are available, longer-term management of the epidemic will be severely hampered,” Najafi wrote.
Phase 3 clinical trials test vaccines on thousands of people, and this step is considered crucial for identifying side effects that, while rare, could cause serious problems once the vaccine is rolled out to the general public. Though countries including Russia and India have approved coronavirus vaccines for emergency use without data from large-scale trials, several scientists said in interviews that the practice is risky.
“It all comes down to the Phase 3 trials,” said Mahan Ghafari, a research scientist at the University of Oxford who has studied the transmission of the coronavirus in Iran. Such trials enable scientists to understand “the actual impact, rare side effects, that can only show up in big numbers,” he said.
But such concerns went unheeded. When Namaki, the health minister, announced on June 14, 2021, that the Barkat vaccine had received emergency approval, the only data publicly available about the vaccine was a preclinical study of its effect on animals, published just four days earlier. Though Iranian media had reported the launch of Barkat’s Phase 3 trial a month earlier, it didn’t actually begin until June 16 of last year, two days after the approval was announced, according to researchers involved in developing the vaccine who disclosed the start date in an academic paper this year.
Still, Barkat officials boasted they had created Iran’s first coronavirus vaccine.
Pasteur’s application, meanwhile, was briefly set aside because of “deficiencies” in a few documents, Namaki said, though it was eventually approved.
Bonuses and company payments
As Barkat was ramping up its vaccine development and racing toward approval, two of the company’s board members were positioned at the heart of the government’s public health apparatus.
One was Jamshidi, who is also the chairman of Shifa, the Barkat subsidiary producing the vaccine. He joined Barkat’s board in 2018, and company documents show he held his corporate roles even as he served as secretary of Iran’s powerful coronavirus task force starting in March 2020.
Another Barkat board member since 2018 is Nasrollah Fathian, a longtime Revolutionary Guard general who was named by Namaki in March 2020 to a role on Iran’s coronavirus task force coordinating among government ministries. Fathian was also an adviser to the health minister, according to the Tasnim news agency.
A company disclosure reported that Jamshidi, Fathian and three other board members were awarded bonuses that totaled about $21,000 on June 15, 2021. But three business experts who reviewed the document questioned that relatively low amount, given the way board directors are typically compensated in Iran.
Jamshidi and Fathian did not respond to emailed questions.
Once Barkat embarked on its vaccine project, it also generated revenue for other companies linked to Iran’s elite, according to financial statements.
Shifa paid more than $800,000 to Mahan Air to transport machinery for making vaccines, a 2021 Shifa financial statement shows. The United States imposed sanctions on Mahan Air, an Iranian airline, based on a Treasury Department finding that the company had transported weapons, personnel and funds for the Revolutionary Guard.
The same statement shows that Sabir International and its subsidiary received about $3.6 million for building vaccine project facilities and equipment. Sabir had previously worked alongside the Revolutionary Guard’s construction arm on transit projects.
Mahan and Sabir executives did not respond to emailed questions.
In the year since the Health Ministry gave Barkat the green light, new — but limited — information has emerged about the development of the vaccine.
The most complete information available publicly appeared in an academic paper published in April in the British Medical Journal Open. The paper reported that the vaccine produces antibodies against the coronavirus and does not cause serious side effects, but the findings were based on only Phase 1 and 2 trials. By the time this was published, millions of Iranians had already received the vaccine.
The lead author of the BMJ Open paper was Mohraz, the scientist recruited by Shifa. The paper listed her academic affiliation but did not disclose that she was paid by the company that developed the vaccine. That omission represented an ethical breach, according to experts in scientific ethics, because it deprived readers of relevant context as they assessed the research. A Shifa financial statement showed she had been paid about $6,000 in late 2020.
Mohraz did not respond to emailed questions regarding the payment and lack of disclosure. A spokeswoman for BMJ Open said the journal is investigating the issue.
By January, Barkat had produced only 24.7 million doses, a company statement shows, less than half of what Mokhber had promised Khamenei. Company officials said it had run into production problems and also blamed sanctions for delays in importing essential equipment. Some observers also chalked the failures up to the company’s inexperience.
As Iranians waited for vaccines to become available, the pandemic spiked. By last August, Iran was in the grip of its worst coronavirus wave, with more than 50,000 infections a day at its peak. Some Iranians were traveling to neighboring Armenia, which was offering free coronavirus vaccines to tourists.
And when the Barkat vaccine did become widely available, it ultimately proved to be unpopular. As of the end of July, less than 6 percent of the 152 million doses of coronavirus vaccine injected into Iranian arms had been produced by Barkat, according to the WHO.
Mokhber, meanwhile, had moved on from his post as chief executive of the Setad conglomerate. Iran’s newly elected president, Ebrahim Raisi, had named him vice president. In one of Mokhber’s first acts, he ordered the Health Ministry to urgently import millions of foreign-made vaccine doses.