General Legal Framework of Pharmaceutical Industry in Turkey
Introduction
Medicine has been defined by the World Health Organization as “products that are used to change or analyze physiological and pathological circumstances to the benefit of the user.”[1] Under Turkish law, medicine corresponds to “substance or a combination of substances of natural and/or synthetical origin applied to humans to cure a disease and/or prevent, to make a diagnosis or to restore, regulate or change a function.”[2]
By nature, the pharmaceutical sector is a dynamic sector full of challenges and affected by scientific developments, research and development activities, and changing human needs. On the other hand, as the rewards increase along with the risks,[3] the pharmaceutical sector is a profitable sector that adds value.
Global Pharmaceutical Sector
The global pharmaceutical sector has been experiencing rapid growth and development as a result of the acceleration of scientific developments and demographical changes. Average increase rates in annual health expenses between the years 2014-2018 has reached 2.4% in Western Europe, 4.9% in North America, 8.1% in Asia and Australia, and 8.7% in the Middle East and Africa[4]. This wind of change has triggered and will trigger other changes, both in an economic sense, as well as in terms of legal regulations in the pharmaceutical sector. Recent regulations are now based more on patient results and data-based information[5]. In the meanwhile, the share of generic drugs in the total drug expenses is expected to increase from 27% (corresponding to 261 billion dollars) as of 2012, to 36% (corresponding to 421 billion dollars) by 2017[6].
Pharmaceutical Sector in Turkey
The position of the pharmaceutical sector in our country has recently gained more significance, and has experienced a transformation, parallel to global changes[7]. There are 67 production facilities, approximately 300 corporations, 31 thousand employees, and more than 11 thousand products. Also, Turkish pharmaceutical products have been exported to more than 160 countries in the European Union, the Commonwealth of Independent States, North Africa and Middle Eastern countries[8].
According to International Medical Statistics, Turkey has become the 17th worldwide with its pharmaceutical market of 7 billion dollars, in 2014[9]. According to the same 2014 data, there are 332 firms active in the Turkish pharmaceutical sector, 56 of which are local firms, and 71 are also engaged in drug production[10]. The pharmaceutical sector is an intensively regulated sector, both globally and nationally. Licensing and repayment systems are examples of regulations to which this sector is subject[11].
Licensing Process
The main duty of the regulatory bodies and authorities in the pharmaceutical sector (which is directly related to public health) is to analyze the reliability of the drugs, subject to approval in terms of their effectiveness and quality, and to ensure that they are accurately licensed. Following scientific research and development activities, before a newly developed drug is offered to the market, approval from all of the different authorized regulatory bodies in the pharmaceutical sector must be obtained.
In Turkey, the ministry authorized for the licensing of drugs is the Ministry of Health (“Ministry”). More specifically, the Turkish Drug and Medical Devices Administration is authorized for the determination and application of the rules and standards for licensing, storage, sales, import, export, market supply, distribution, putting into service, withdrawal and use of drugs[12].
Licensing of drugs was initially regulated in Turkey by the Pharmaceuticals and Medical Preparations Law[13] in 1928. Licensing of drugs are completed according to the Regulation Regarding the Licensing of Human Medicinal Products[14] which entered into force 30 December 2005[15] (“Regulation”). According to the Regulation, a license is defined as “the document issued by the Ministry indicating that a product can be put into the market in accordance with the accepted product specifications stating its specific formula and pharmaceutical form and dose.” On the other hand, licensing corresponds to the “analysis and approval process for a product to be placed into the market.”[16] The Regulation aims to “determine the practice with regard to the procedure and principles of the licensing process, and the practices for licensed human medicinal products, in order to provide that the human medicinal products have the required effectiveness, reliability and quality.”
Evaluation of the License Application and Steps of Licensing
Before a drug attains its place in the market, it should be licensed upon the completion of all of the steps for licensing specified, below.
Preliminary Assessment: Following the receipt of an application filed by the Ministry, the applicant holder is notified of the required assessment within 30 days. If the application has been determined to have deficiencies, the application holder completes the application within 30 days. The second preliminary assessment following the elimination of the deficiencies before the Ministry is completed within 30 days[17].
Licensing Period: The Ministry finalizes a full license application where the preliminary assessment has been completed, within 210 days following the acceptance of such application assessing whether the licensing conditions have been fulfilled[18].
Licensing Criteria: Conditions to be taken into consideration regarding the products by the Ministry for the licensing of human medicinal products:
- Proof of the effectiveness of the envisaged usage conditions,
- Proof of reliability,
- Suitable technical and pharmaceutical characteristics[19].
Validity Period of the License: The license holder shall present all the information with regard to quality, reliability and effectiveness, including all the changes since the grant of the license along with the required pharmacovigilence data at least 3 months before the expiration of the first five years following the license date[20]. It is aimed that the extension of the validity period of the license is to be completed within 6 months at the latest[21].
Liability of the License Holder: The license holder is liable to the Ministry with regard to the product subject to the license, in those matters such as the following:
- Production of the product in accordance with the specifications stated under the annex of the application and accepted by the Ministry;
- Update of the short product information and instructions for use in order to provide correct and secure usage; and
- Providing availability of the product subject to the license[22].
Also, the Ministry requires proof of bio-equivalence to grant license to generic drugs since 2000. As per those drugs produced before 2000 without bioequivalence certification, it has been requested that their bioequivalence is proven in a certain period of time[23].
Repayment Systems
Types, amounts, expiration dates and procedures, and principles with regard to the repayment of the drugs refinanced by the Social Security Institution (“Institution”) and those drugs, which have been requested to be refinances, are regulated under the Institution Repayment Regulation[24].
The Social Security Institution General Health Insurance Alternative Repayment Regulation[25] especially governs the alternative repayment models established to include those health related product and service groups financed/to be financed by the Institution in the repayment scheme and to subsidize the production of the market availability of the product groups, domestic production of exported products, and the provision of market availability as such.
With regard to the repayment scheme, drugs in each product group will receive repayment corresponding to a maximum of 10% more than the cheapest unit price. In addition, the base unit price will be applied to 15 equivalent groups[26].
Conclusion and Future Projections
Health expenses per person between the years 2013-2017 will grow by 5.6% annual compound growth rate and Turkey will make a leap in the health sector with its rapid growth of the young population according to the future projections of the Economic Intelligence Unit[27].
While the young population increases, the demographical structure of our country also changes, and the low level of drug consumption per person creates new opportunities for the pharmaceutical industry of Turkey in the future. In that sense, there is need for regulation in order to provide a reliable atmosphere for domestic and foreign investors and actors in the pharmaceutical sector, and to maintain and even increase the level of prosperity of the public[28].
[1] İstanbul Eczacı Odası Gençlik Komisyonu http://www.istanbuleczaciodasi.org.tr/?cat=10&page=komisyon
[2] Madde 3(1)(g) - Sosyal Güvenlik Kurumu İlaç Geri Ödeme Yönetmeliği
[3] Risk/Reward Ratio Definition Investopedia,
[4] 2015 Global Yaşam Bilimleri Görünümü, Deloitte DTTL, 2014s https://www2.deloitte.com/content/dam/Deloitte/tr/Documents/life-sciences-health-care/sagl%C4%B1k-ve-ilac-sekt%C3%B6r%C3%BC-2020-ongoruleri.pdf (“Deloitte”)
[5] Deloitte
[6] 2017’ye kadar Tıpta Genel Görünüm, IMS Sağlık Bilişim Kuruluşu
[7] Özellikle 2003 yılında uygulanmaya başlanan Sağlıkta Dönüşüm Programı’ndan sonra sağlık ve ilaç sektörlerindeki değişim hızlanmıştır. Bknz. Sağlıkta Dönüşüm Programı Ağustos 2008 İlerleme Raporu http://sbu.saglik.gov.tr/Ekutuphane/kitaplar/turkiyeSDP.pdf
[8] İlaç Endüstrisi İşverenler Sendikası, Türkiye İlaç Sektörü 2015, http://www.ieis.org.tr/ieis/assets/media/kls/TR_Ilac_sektoru_2015.pdf (“İlaç Endüstrisi İşverenler Sendikası”)
[9] OECD Health Statistics 2016 Definitions, Sources and Methods
[10] İş Bankası İlaç Sektörü 2016/1 Raporu https://ekonomi.isbank.com.tr/UserFiles/pdf/sr201601_ilacsektoru.pdf (“İş Bankası”)
[11] İş Bankası
[12] md. 27, Sağlık Bakanlığı Ve Bağlı Kuruluşlarının Teşkilat Ve Görevleri Hakkında Kanun Hükmünde Kararname, Karar Sayısı: KHK/663, Resmi Gazete ile Neşir ve İlânı: 2 Kasım 2011 - Sayı: 28103 (Mükerrer)
[13] KANUN NO: 1262 İSPENÇİYARİ VE TIBBİ MÜSTAHZARLAR KANUNU (*) Kabul Tarihi: 14 Mayıs 1928 Resmi Gazete ile Neşir ve İlânı: 26 Mayıs 1928 - Sayı: 898 3.t. Düstur, c.9 - s.544
[14] Sağlık Bakanlığından: BEŞERİ TIBBİ ÜRÜNLER RUHSATLANDIRMA YÖNETMELİĞİ
Dayandığı Kanun Numarası ve Tarihi: 1262 - 14.5.1928 / 3359 - 7.5.1987 / 5624 - 11.4.2007 / KKK/663 - 11.10.2011, sResmi Gazete ile Neşir ve İlânı: 19 Ocak 2005 - Sayı: 25705 (“Yönetmelik”)
[15] İlaç Endüstrisi İşverenler Sendikası – Ruhsatlandırma http://www.ieis.org.tr/ieis/tr/issues/11/ruhsatlandirma
[16] Ruhsatlama Süreçlerinde Sağlık Bakanlığı Ve İlaç Sanayi İlişkileri, Yavuz UYAR İstanbul Üniversitesi Cerrahpaşa Tıp Fakültesi, Tıbbi Mikrobiyoloji Anabilim Dalı, İstanbul, 29.ANKEM Antibiyotik Ve Kemoterapi Kongresi, Bodrum, 28-31 Mayıs 2014 (http://www.ankemdernegi.org.tr/ANKEMJOURNALPDF/ANKEM_28_Ek2_2_6.pdf)
[17] Yönetmelik, md. 13.
[18] Yönetmelik, md. 15.
[19] Yönetmelik, md. 16.
[20] Yönetmelik, md. 21
[21] T.C. Sağlık Bakanlığı İlaç Ve Eczacılık Genel Müdürlüğü Kamu Hizmet Standartları Tablosu https://sgb.saglik.gov.tr/content/files/hizmetstandart/iegm_kamu_hizmet_standartlari.pdf
[22] Yönetmelik, md. 24
[23] Biyoeşdeğerlilik ve Jenerik İlaçlar Prof Dr. Öner Süzer, Cerrahpaşa Tıp Fakültesi, Farmakoloji ve Klinik Farmakoloji Anabilim Dalı http://www.onersuzer.net/eski/pdf/biyoesdegerlik_seminer.pdf
[24] Sosyal Güvenlik Kurumu İlaç Geri Ödeme Yönetmeliği
Dayandığı Kanun Numarası ve Tarihi: 5510 - 31.5.2006 / 5502 - 16.5.2006
Resmi Gazete ile Neşir ve İlânı: 10 Şubat 2016 - Sayı: 29620
[25] Sosyal Güvenlik Kurumundan: Sosyal Güvenlik Kurumu Genel Sağlık Sigortası Alternatif Geri Ödeme Yönetmeliği Dayandığı Kanun Numarası ve Tarihi: 5510 - 31.5.2006 / 5502 - 16.5.2006 Resmi Gazete ile Neşir ve İlânı: 10 Şubat 2016 - Sayı: 29620
[26] İlaç Endüstrisi İşverenler Sendikası, http://www.ieis.org.tr/ieis/tr/issues/10/geri-odeme
[27] Invest in Turkey – Yaşam Bilimleri T.C. Başbakanlık Türkiye Yatırım Destek ve Tanıtım Ajansı (TYDTA) http://www.invest.gov.tr/tr-tr/sectors/Pages/LifeSciencesAndHealthcare.aspx
[28] İş Bankası
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