Localisation of Previously Imported Products

In Turkey, the innovator pharmaceutical market is dominated by originator companies of foreign origin, with local companies active in the generics market. The government’s unease with the emphasis on imported products in the Turkish market beckoned the state development plan to procure local production in the pharmaceutical market, a political act affecting the activities of many pharmaceutical companies of foreign origin.

The aforementioned state development plan triggered the SSI’s administrative decisions to delist pharmaceutical companies of foreign origin from the reimbursement list unless they gave the undertaking that they would shift to local production.

The largest buyer of medicines in the Turkish market is the SSI through the reimbursement scheme in place. With this scheme, the prescribed products that are on the reimbursement list of the SSI are bought by patients from pharmacies, with little or no contribution from the patient. The pharmacies are later reimbursed by the SSI for these products and, thus, being listed for reimbursement is a practical precondition that exists in the pharmaceutical market.

This forced localisation left many foreign pharmaceutical companies with the need to enter into projects with local companies to localise the production of their products. However, the complex nature of many of the products previously imported leaves some companies unable to localise the manufacture of their products, which leads to the delisting of these same products. This governmental act forecloses the market for foreign products unable to localise production, which could be said is unjustly detrimental to foreign companies. The unjust nature of this foreclosure is due to the state development plan not being a legislative act with legal grounds to surpass the legislative measures that had listed these foreign products for reimbursement in the first place.

On 2 April 2019, the European Union (“EU”) made a request for consultation before the WTO regarding the measures Turkey had taken concerning production, importation and marketing of pharmaceutical products, which it claimed to be in contradiction with international agreements. As the matter has been brought before the WTO panel, we may expect changes in the Turkish regulatory system, especially with respect to the SSI’s approach on the forced localization policy. 

Find more insights