Turkey. Pharmaceutical Market Access Barriers 2014

Pharmaceutical Product Registration

Marketing of new drugs in Turkey is governed by the regulatory procedures prescribed by the Pharmaceuticals and Medical Devices Agency of Turkey, MOH for the approval of medicinal products. The data and documents required to register medicinal products are listed in the MOH‘s Registration Regulation of Medicinal Products for Human Use. Although the legislation requires the Turkish MOH to assess and authorize the registration of medicinal products within 210 days, surveys by the Association of Research-Based Pharmaceutical Companies (AIFD) indicate that the average regulatory approval period was 934 days in 2012, and for many applications exceeded 1000 days.

The MOH‘s recent revisions to the Registration Regulation have compounded these delays.67 Effective March 1, 2010, a Good Manufacturing Practices (GMP) certificate that is issued by the Turkish Ministry of Health must be submitted with each application to register a medicinal product for each of the facilities at which the product is manufactured. The GMP certificate can only be issued by MOH following an on-site inspection by Ministry staff, or by the competent authority of a country that recognizes the GMP certificates issued by the Turkish MOH. However, for the reasons explained further below, neither option can be completed in a timely manner.

In addition to the regulatory approval delays, many innovative products manufactured outside Turkey, including anti-infectives, antipsychotics, vaccines, cardiovascular, diabetes and oncology drugs, are currently awaiting GMP inspections. Indeed, as of April 2013, AIFD‘s members reported that GMP inspections were pending on 1,447 applications covering 939 products, requiring inspections at more than 350 overseas sites.68 Despite increasing the number of inspectors at the end of 2013, the MOH still does not have adequate resources to complete these GMP inspections in a timely manner. It should be noted that there has not been any transitional mechanism to allow approval of pending applications while building up the adequate regulatory capabilities.

Furthermore, although the Amended Registration Regulation permits applicants to submit GMP certificates issued by competent authorities in other countries, it does so only to the extent that the pertinent country recognizes the GMP certificates issued by Turkey. There are, however, two significant hurdles to this mutual recognition arrangement: 1) Turkey is not a member of the PIC/S (Pharmaceutical Inspection Convention and Co-operation Scheme) that provides guidance on international GMP standards; and 2) Turkey will need to negotiate mutual recognition agreements with each participating country. In the meantime, registration of new medicinal products will be substantially delayed, which, in turn, hinders patients‘ access to innovative medicines. To avoid imposing this unnecessary non-tariff barrier to trade, Turkey, as a temporary measure, should revert to recognizing GMP certificates accepted by institutions like the FDA, EMA, or other PIC/S members for medicinal products. Such measures should remain in force until MOH either has the staff and resources necessary to conduct GMP inspections in a timely manner, or Turkey has entered into mutual recognition agreements with the United States and other key trading partners, a prospect that PhRMA recognizes may not occur in the short-term. In addition, despite statements that the Ministry of Health would begin GMP inspections in parallel with marketing authorization reviews for priority products, this has yet to occur.

Government Price Controls and Reimbursement

In Turkey, pharmaceuticals‘ pricing is regulated by the MOH Pharmaceuticals and Medical Devices Agency of Turkey. The reimbursement system is based on a positive list and reimbursement decisions are the responsibility of the inter-ministerial Reimbursement Commission, led by the Social Security Institution (SSI). Reimbursement decision criteria are not clearly defined. The process is nontransparent and maintains lengthy timelines as a result of frequent delays in decision-making and erratic meeting schedules. On average, it takes over 390 days in reimbursement review for one product (from application for reimbursement to final decision).

As part of a number of austerity measures for dealing with the global economic crisis and managing the mid-term budget, the Turkish Government in December 2009 made a number of significant revisions to this pricing system.

Original products without generics: In December 2009, Turkey imposed an additional 12 percent discount over the existing 11 percent discount. In December 2010 and November 2011, further discounts of 9.5 and 8.5 percent, respectively, increased the total social security discount for innovative products to 41 percent. Although the latter discounts were imposed ostensibly to meet short-term budget overruns in 2010-2011, those cuts were retained in Turkey‘s pharmaceutical budget for 2013-2015.

Original products with generics: Turkey reduced prices for originals and generic products from 66 percent to 60 percent of the reference price (previously original products were at 100 percent and their generics were at 80 percent of the reference price). However, if the reference price decreases at some point in the future, no further price reductions are imposed until the reference price is equal to or below 60 percent of the original reference price. No similar relief is provided to original products without generics; if the reference price decreases at some point in the future, the SSI discounts (41 percent), as noted above, are applied on top of the reference price decrease. The pricing and reimbursement system should, at a minimum, be revised to address this inequity. For original and generic products in this category, additional discounts of 9.5 and 7.5 percent were also imposed as of December 2010 and November 2011 with a total SSI discount of up to 28 percent for this category of products.

Government pharmaceutical budget caps: The 2010 Government pharmaceutical budget was set at 10 percent less than actual Government spending in 2009, but allowed for 7 percent growth per annum for 2011 and 2012. Based on an unofficial protocol reached between the Turkish Government and the pharmaceutical industry, additional price cuts would be implemented if the budget caps were exceeded. The protocol stipulated that the parties should avoid the need for ad hoc and unexpected implementations of therapeutic price referencing. Further, the protocol stated that prices may be allowed to increase if the budget caps are not exceeded.

Any predictability that these revisions brought was short-lived. Prior to October 2010, the Turkish Government failed to share any data with industry on actual pharmaceutical spending, despite being required to do so under the protocol. In November 2010, Turkey abruptly requested 1.6 billion (Turkish Lira) in savings measures from the pharmaceutical industry to cover projected overruns for 2010 and 2011, continuing to put a major burden on innovative products. In order to cover these alleged overruns, the Turkish Government instituted another round of additional discounts (9.5 percent) on medicines in December 2010. Similarly, in November 2011, the Turkish Government instituted additional discounts (8.5 percent for originals without generics and 7.5 percent for originals with generics and generics) to cover the 2011 budget overrun (estimated to be 0.9 billion TL).

Furthermore, although spending on pharmaceuticals in 2012 was 0.85 billion TL less than budgeted, no steps have been taken to revoke any of the several rounds of price discounts that generated this surplus. 

A global budget for 2013-2015 has not been established, but the pharmaceutical budget for 2013 was set at 15.7B TL. This budget is based on suppressed demand, due to the GMP restrictions, and government prices that are artificially low due to the fixed exchange rate system (discussed below). As a result, this funding level is far below the needs of the Turkish population and does not provide an adequate reward for innovation.

Fixed Exchange Rate for Pharmaceuticals: In addition, in April 2009, the GOT fixed the Euro to Turkish Lira exchange rate, for pharmaceutical pricing purposes only, to 1 Euro to 1.9595 Turkish Liras and has not adjusted it since. Based on the most recent 90 day average, this is an additional discount of more than 53 percent. Between July 2011 and July 2013, the fixed exchange rate resulted in price cuts equivalent to approximately $2.5B. The combined impact of the price cuts and fixed exchange rate is close to $3.0 billion in lost sales revenue.

Source: PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA (PhRMA) SPECIAL 301 SUBMISSION 2014