And now it’s time to share Beauty and the Beast’s final version.
To comprehend the Turkish Pharmaceutical Market potential completely, it might be valuable to review “opportunities and threads” together after ranking strengths and weaknesses of the industry individually.
Turkey, with its refugee inflated >82MM population (TUIK/2018), has a statistically good potential vs. its peers among OECD countries with its current very low consumption rate in terms of health and individually pharma expenses together with expected population growth rate. With the support of private insurance system (including supplementary insurance scheme that is expected to be more popular after being understood fully soon), healthcare spending seems to increase including pharma related expenses (fertility, pregnancy etc..). Turkey has an open podium for investors and it welcomes or even beyond welcoming it incentives heavily (Corporate tax deduction,VAT & Customs Duty & Income Tax withholding exemption, interest rate support, land allocation) FDIs and any new business activities. As a socio-demographic matter, consanguineous marriages are very common (23.2% – TUIK/2016) in the country which feeds undiagnosed/diagnosed rare genetic diseases and congenital malformations resulting in high demand for orphan drugs that will increase further with alternative reimbursement deals between the Social Security System (SGK) and originators. It would be a big ignorance not mention Turkey’s strategic location and its consequence of natural potential to be a good hub for export activities while leveraging its high-quality infrastructure and state of the art manufacturing capabilities which are today poorly utilized with the local demand only.
While the future seems bright as the sun, with the recession (or stagnation) in the economy, there might clouds in the horizon that might shadow the sunshine in case SGK opts to revert its buying mechanism to consolidated buying system for its all hospitals and service centers and if expands the therapeutic equivalent definition and scope. In the meantime, in line with local players manufacturing capabilities’ improvement, there might be a further restriction on import products to reduce pharmaceutical spending. This sounds good opportunity for the dominant big scale, local manufacturers, nonetheless the risk of high EURO currency versus Turkish lira now and then will have a similar effect for all pharma companies regardless of the location of the product manufactured as Turkey’s drug manufacturing is addicted to API importation. In the meantime, all companies (mainly innovator part) needs to be prepared to make more innovative discussions behind the closed doors with the regulator body similar to European arrangements for reimbursement approvals.
Having all these said, it would be almost impossible for big pharma to ignore or skip Turkey opportunity in the short/mid and long term. On the other hand, the local players will also continue to invest and increase their capabilities to survive and ultimately to find proper buyers depending on their vision. Nonetheless, it’s clear that Turkey Pharmaceutical Market requires insistence, perseverance, and a long term plan and commitment to be successful.