MARKET GROWTH FORECASTS
The forecasts draw an optimistic picture. The global pharmaceutical market is expected to grow at a 4-6% compound annual growth rate (CAGR) in developed markets and 7-9% CAGR in pharmerg-ing markets by 2019. The market size for Turkey stood at $6.2 billion in 2014 and is expected to grow to $10.9 bn until 2019.
Article 15 of the Licensing Regulation issued by the Turkish Ministry of Health (MoH), in parallel with the European Directive 2001/83/EC, foresees that a pharmaceutical product is granted a marketing authorisation within 210 days. This is the explicit rule stated under the Regulation itself, but there is doubt as to whether this is always reflected in practice.
The MoH adopted a parallel application opportunity through which applicants could apply simultaneously for both the GMP certificate and the marketing authorisation. However this opportunity has been introduced only for products that fall under the so-called ‘first category1 i.e. innovative products that have no generics, and for first generics. Although there are further incentives for GMP auditing for generic products, these are not valid for original products.
After the replacement of a cost based pricing system with the reference pricing system back in 2004, companies announced the cheapest ex-factory price among the reference countries (France, Italy, Spain, Portugal, and Greece) which will be accepted by the MoH as the ‘highest ex-factory price.’ In addition, it has to undergo mandatory discounts applied by the Social Security Institution (SSI), the Health Implementation Communique, as well as the commercial discounts made to warehouses and pharmacies.
More dramatically, the Pricing Commission had frozen the exchange rate at 1.9595 Turkish Lira (TRL) until a very recent amendment, due to a court decision. The decision stated that the Commission’s failure to make any changes to the current exchange rate is against the law. In line with this decision, the Commission revised the exchange rate, raising it to TRL 2.0787. The court actions are still ongoing and the industry is waiting for better revisions in the exchange rate to give more accurate prices compared with the prices in the reference countries.
As an upside of having the cheapest prices in Europe, the reimbursement levels are relatively high in Turkey. Indeed there are around 8,200 different pharmaceutical products within the reimbursement list of the SSI. In 2014, the SSI financed more than 337 million prescriptions in total which equals to TRL 16 billion (£367 million).
Considering the expectations, we may conclude that a lot has been accomplished, yet still there is way to go. Along the way, there is no doubt that all the parties, not only the government but also the private players, need to act cooperatively and proactively.
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