Fixed Exchange Rate in Pricing of Pharmaceuticals and its Impact

The prices of pharmaceuticals to be launched on the market are determined in accordance with the Decision on the Pricing of Medicinal Products for Human Use (”Decision”) and the Communiqué on the Pricing of Medicinal Products for Human Use (“Communiqué”) dated 29 September 2017, published by the Ministry of Health, which has been authorised to regulate this area.

The Decision foresees a reference pricing system in which the lowest wholesaler price for the relevant product in an EU Member State is used as a reference and is determined to be the maximum possible wholesaler sales price in Türkiye. The reference price is then converted into Turkish lira. However, in order to prevent the impact of exchange rate fluctuations, the aim is to calculate and set a value using a fixed exchange rate each year. This ensures that the exchange rate applied to the reference price from the relevant EU country remains constant for one year, but is significantly lower than the current exchange rate.

According to the Decision, the exchange rate shall be determined as 60% of the average value in euro from the previous year. The Pricing Evaluation Commission meets within the first 45 days of each year and announces the Turkish lira value for 1 euro based on the calculation of 60% of the previous year’s average value.

In line with this rule, although the exchange rate used for pricing of pharmaceuticals must be updated annually, updates have been made to the pricing at various times during the year due to the difference between the set exchange rate and the current rate increased, without waiting for the first 45 days of each year.

The most recent pricing update made in October 2024 indicated that a new update was necessary, as the euro value was increased by 23.5%, setting the new euro pricing value at 21.6721 TRY.

Graph 1. Average euro/Turkish lira exchange rates according to the Turkish Central Bank (CBRT) and Ministry of Health, TÜRKİYE, 2018-2024

Sources: https://www.tcmb.gov.tr/ and https://www.titck.gov.tr/