Navigating Turkey’s Pharmaceutical Reimbursement System: Challenges and Adaptation Strategies for Foreign Companies

Introduction

Turkey operates a reimbursement system that is a critical component of the healthcare sector, aimed at ensuring patients’ access to essential medicines through public funding mechanisms. The Social Security Institution (SGK) manages this system by negotiating prices and determining which medicines are covered. For foreign pharmaceutical companies, understanding and adapting to this framework is essential for achieving market access. However, strict pricing policies, complex procedures, and regulatory requirements present significant challenges. This article explores the legal structure of the reimbursement system in Turkey and the adaptation processes required for foreign pharmaceutical companies to align with these regulations.

1. Legal Framework Governing Reimbursement in Turkey

1. Role of the Social Security Institution (SGK)
   • SGK determines which pharmaceuticals are included in the reimbursement list, based on public health priorities and cost-effectiveness.
   • Medicines included in the list are subject to discount negotiations between the SGK and the manufacturer.
2. Regulation on Pricing and Reimbursement
   • The Pharmaceutical Pricing Decree sets the maximum price limits for reimbursed drugs. The prices are based on a reference pricing system, using prices from five European countries as benchmarks.
   • Foreign companies must submit dossiers that detail clinical benefits and economic value for their products to be considered for reimbursement.
3. Conditions for Inclusion in the Reimbursement List
   • The SGK prioritizes medicines that address public health needs or provide therapeutic innovations. However, companies may face delays due to stringent evidence requirements and lengthy bureaucratic processes.

2. Challenges Faced by Foreign Pharmaceutical Companies

1. Pricing and Discount Pressure
   • Foreign companies often experience price pressure during SGK negotiations. The government requires significant discounts on the list price to secure reimbursement. This policy impacts profit margins, especially for innovative drugs.
2. Prolonged Market Access Delays
   • Due to the complex reimbursement approval processes, foreign pharmaceutical products may face months or even years of delay before reaching the market. These delays hinder companies from capitalizing on early market entry opportunities.
3. Currency Volatility and Exchange Rate Policies
   • The reimbursement system uses a fixed exchange rate, which can diverge significantly from market exchange rates. Foreign companies bear the risk of currency fluctuations, reducing profitability and increasing financial uncertainty.
4. Regulatory and Administrative Burdens
   • Adapting to local administrative procedures requires companies to navigate extensive documentation and meet the SGK’s stringent requirements. Partnering with local distributors and consultants often becomes necessary.

3. Adaptation Strategies for Foreign Pharmaceutical Companies

1. Engaging with Local Consultants and Distributors
   • Foreign companies often collaborate with local partners to better understand SGK’s requirements and streamline the reimbursement process. These partnerships help with documentation preparation and facilitate smoother negotiations.
2. Early Market Access Programs
   • Some foreign pharmaceutical companies explore early access programs or launch products as non-reimbursed medicines initially, building a market presence while awaiting reimbursement approval.
3. Tailoring Dossier Submissions to Local Needs
   • Customizing clinical and economic evidence to align with Turkey’s healthcare priorities can improve the chances of obtaining reimbursement. SGK places significant weight on cost-effectiveness and therapeutic benefits in its evaluations.
4. Leveraging International Trade Agreements
   • Foreign companies can benefit from bilateral trade agreements and regulatory harmonization efforts to facilitate market access and accelerate the reimbursement process.

4. Legal Remedies and Dispute Resolution

1. Administrative Appeals Against SGK Decisions
   • In cases where a product is denied reimbursement or significant pricing disagreements arise, companies can file administrative appeals with the relevant regulatory authorities.
2. Arbitration and Litigation
   • Disputes over contractual obligations or pricing agreements may be resolved through arbitration or litigation in Turkish courts. The New York Convention supports the enforcement of international arbitration awards in Turkey.

Conclusion

Navigating Turkey’s reimbursement system presents significant challenges for foreign pharmaceutical companies, from pricing pressures to regulatory burdens. Understanding the legal framework and strategically adapting to the SGK’s requirements is essential for market access. Collaborating with local partners, preparing tailored dossiers, and leveraging international trade frameworks can mitigate these challenges. However, regulatory reforms that align more closely with global standards are needed to enhance Turkey’s attractiveness as a destination for pharmaceutical investments and innovative healthcare solutions.