Turkey: Supporting The Domestic Generic Drug Production In Turkey

Last Updated: 11 August 2015
Article by Şahin Ardiyok, Ceren Ustunel and Guniz Cicek

In recent years, Turkey made major developments in the pharmaceutical industry. Considering the Association of Research-Based Pharmaceutical Companies' (AIFD) "Ranking of Countries in Pharmaceutical Market" research in 2013, Turkey was in the 18th place and expected to be in the 16th by the end of 2018.

In 2006, the Social Insurance Institution, Retirement Fund and The Social Insurance Institution for Tradesmen and Craftsmen and Other Self-Employed People (Bağ-Kur) were united under a single roof named the Social Security Institution (SSI) by Law No 5502. This state-owned Institution's main aims are to provide the social insurances such as work accident insurance, health insurance, pensioners' insurance, survivors' insurance, etc. and to implement the social security policies. According to AIFD's research in 2014, the pharmaceutical services expenditure of SSI was $ 6.5 billion, and this number is expected to increase to $ 7.4 billion by the end of 2016. The result of a comparison between Turkish Statistical Institute's "Life Satisfaction Report" and Europe Commission's "Social Climate Report" is that while 63% of people in Europe appreciate the health services, in Turkey this percentage reaches up to 75%.

Since the ratio of imported drugs in the Turkish pharmaceutical market is 58.1%, the Turkish Ministry of Health (MoH) has adopted a policy aiming to increase the generic drug production in Turkey.  The measures set with the policy are laid out in the Action Plan on the Structural Transformation of Health Industries of the 10th Development Plan set for 2014-2018. The goal is to increase the usage and exportation of domestic medical devices, materials and medicine by creating a Committee responsible for overseeing health policy making processes and establishing an independent Turkish Health Institutes Presidency, which will enhance R&D activities through various encouragements—such as the creation of clusters.

More importantly, there is a policy (No. 5) which states that "appropriate measures will be taken to give the priority to drugs and medical devices that are produced in Turkey, in the repayment and pricing policies ..." Additionally, it is marked that "the imported products to be removed from the repayment list, will be determined under the condition of assuring that the treatment will be ensured." Thus, there is a strong belief that domestically produced generic products may be added to the repayment list to the detriment of imported products.  

Assessing the said policy's compatibility with the international trade treaties is of great importance  and thus, the World Trade Organization (WTO) provisions which became binding for Turkey after the ratification of "The Law Approving the WTO Creating Agreement" come to the forefront.

As in the price regulation of pharmaceutical products in Turkey, the Health Care Transformation Program is a milestone in the public health sector. In 2008 the aforementioned program started a way of pricing named "reference pricing" where the price is determined according to the cheapest level from one of these countries: France, Spain, Italy, Portugal, Greece; and then decreased by 11% accordingly. After this legislation, the government passed more discounts in 2009, 2010 and 2011.

The General Agreement on Tariffs and Trade (GATT) signed in 1994 is currently an attachment of the WTO Creation Agreement, and it contains provisions which are relevant to the MoH's policy aimed at removing imported medicines from the governmental repayment list. Paragraphs 4 and 8/a of GATT's Article III state that practices favouring a domestic product vis-à-vis imported products are prohibited unless the practices concerned fall under "procurement by governmental agencies of products purchased for governmental purposes."

Hence, it becomes necessary to examine the conformity of the MoH's incentive mechanism to the relevant WTO provisions by assessing whether the repayment practice could be considered a governmental procurement.

A governmental procurement is defined as the acquirement of goods and/or services needed for governmental purposes by the administration to perform its functions. However, the incentive mechanism is based on repayment of a determined percentage of a specified drug's price to the customer by the Social Security Institution. Thus, it can be argued that this incentive mechanism will be set to benefit the customer and the producing firm directly, whilst enhancing the competitiveness of the locally produced products. Thereby the repayment mechanism does not seem to fall within the scope of a governmental procurement, rendering the exception invalid for this mechanism.

For the reimbursement of generic products, a dossier needs to be prepared. There are two commissions operating for the evaluation of these dossiers. The first is the Medical and Economic Evaluation Commission, which assesses all applications and declares a decision. The second commission is the Reimbursement Commission, which finalizes the decision declared by the Medical and Economic Evaluation Commission. After the registration process, an application to SSI for reimbursement is needed. These applications are considered before the Medical and Economic Evaluation Commission and the Reimbursement Commission, and then a decision is made.   

In the research conducted by the Turkish Medicines and Medical Devices Agency, the percentage distribution of medicine consumption is determined annually based on the reimbursement conditions. Accordingly, in 2013, the drugs included in the reimbursement policy made up 4.8%, and the drugs that were not included in the reimbursement policy made up 95.2% of the ratio.

Even if the repayment mechanism is considered as a governmental procurement (especially if it is deemed to be fulfilling a governmental purpose), it has to be analysed in the light of WTO's Governmental Procurement Agreement (Procurement Agreement). However, it must be noted that Turkey is currently only an observer and not a party to the Procurement Agreement; therefore the Procurement Agreement has no binding effect on Turkey.

On the other side, another consideration is for the repayment practice to be regarded a public policy. This is because the ultimate goal of this practice is to increase generic drug production in Turkey. However, it is believed that a public policy including the measures that treat foreign generic drug producers unfairly through repayment procedures will probably be regarded disproportionate and conflicting with WTO rules.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Şahin Ardiyok
Ceren Ustunel
Guniz Cicek
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions