Medicines and Medical Devices Sectors: Current Status and Evolving Dynamics
The pharmaceutical sector saw a 2.7% increase in production in 2023. However, between January and July of 2024, there was a 5.2% decrease compared to the same period in the previous year. By 2023, pharmaceutical imports increased by 8.8% reaching a value of 5.4 billion USD, while pharmaceutical exports grew by 15.8% to the size of 2.2 billion USD. In the first half of 2024, exports rose by 1.9%, while imports increased by 4.9% [1].
In 2023, the Turkish pharmaceutical market grew by 90.9% in value in hospitals and pharmacies, reaching 222.5 billion TRY. In this context, the share of domestic production also increased: in 2016, the proportion of manufactured medicines in terms of packaging was 75% and 42% in value, while by 2023, these rates increased to 90.6% in terms of packaging and 57.8% in terms of value [1]. These figures reflect Türkiye’s increase in pharmaceutical production and changes in capacity utilisation rates.
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The medical device sector has shown similar growth. By 2023, the global medical device market had exceeded 530 billion USD, while Türkiye’s medical device exports amounted to 1.25 billion USD. In the Turkish medical device sector, the export/import coverage ratio was 23% in 2017, and by the first half of 2024, this ratio had increased to 48% [1]. These developments can be seen as tangible indicators of the importance placed on policies in support of domestic production.
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However, this does not mean that important problems regarding quality, innovation, and external dependence should be overlooked, as these are still on the agenda for ensuring the sustainability of the improvements, particularly in the pharmaceutical sector. The exchange rate set by the Agency for imported pharmaceuticals and the importation of raw materials for domestic production have a significant impact on both product prices and the balance between production and export. In additional, counterfeit medicines, smuggled pharmaceutical products, or medicines outside the legal supply chain have an adverse effect the dynamics of the sector in a variety of ways. Assessments made without considering these factors may hinder a proper understanding of the sectoral developments. Therefore, attributing growth and export increases solely to the rise in production capacity may be misleading.
In the medical device sector, since product prices are not set by the Agency, pricing depends on free market conditions. On the other hand, when considering the exchange rate and inflation in reimbursement prices for products, these remain insufficient. An assessment of the increase in the export/import coverage ratio should also consider other factors (such as the inability of new technologies to enter the market and the withdrawal of imported products from the market due to exchange rate fluctuations), as these may not fully reflect the true dynamics of the sector.