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Price cuts and public discounts in the Turkish pharma industry

Price cuts and public discounts in the Turkish pharma industry

One of the most controversial developments in the Turkish pharma industry, in 2011, has undoubtedly been the increase in public discounts of reimbursement and decrease of prices of pharmaceuticals.

At first, public discounts that the Turkish SGK, reimbursement authority, expects from the industry were increased by around 7.5 per cent with the amendment made in Health Implementation Communiqué on November 5, 2011. Moreover reimbursement was capped at 10 % (previously 15 %) above the cheapest brand in the equivalent pharmaceuticals group. Afterwards, with the Decree of Council of Ministers regarding the Amendment of the Decision on Pricing of Medicinal Products for Human Use (the “Decree”) published on November 10, 2011; pharmaceutical prices have been decreased starting from the date of publication of the decree. Accordingly, ex-factory sales price of the original products, the generics of which are currently on the market, cannot exceed the reference price (prices in France, Italy, Spain, Portugal, and Greece) until their generics are put on the market; and the “ex-factory sales price” of the original products of which their generics are put on the market, must be at maximum the 60 per cent of the reference price.

It is also stated in the Decree that the loss that has occurred in the stocks of pharmacists due to the reduction of price will be compensated by the pharmaceutical companies. Similarly, in the Communiqué with regard to the Amendment of the Social Security Institution Health Implementation Communiqué dated December 17, 2011, it is stated that stock losses occurred in pharmacy stocks due to the additional discounts in public discounts shall be paid by the pharma companies to warehouses and by the warehouses to pharmacies. However, it shall be reminded that pharmaceuticals, although they are not meant to be regarded as purely commercial goods, are subject to commercial relations and contracts between pharmaceutical companies, warehouses and pharmacies. Therefore, intervention of the public institutions in these commercial and contractual relations by way of implementing administrative regulations creates problem from a legal point of view, as it may result in favoring the commercial benefit of one party over the other, The discussions arising due to this problem are expected to be solved in 2012.

As the public aspect of the health sector contradicts with the commercial interests of the actors, the State, having executive power, is sometimes obliged to intervene and regulate the sector and being extremely cautious at the same time.  As we left behind the year of 2011, it is hoped that 2012 will witness tremendous efforts on the side of the pharmaceutical industry in order to adjust to new regulations and the controversial points will be clarified based on the experiences.

Ms. Özge Atilgan Karakulak

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