TOWARD A NEW ERA IN PRICING
Ayşe çetinel Sapmaz, managing director of Janssen Turkey
|
With the sweeping healthcare reforms also came a number of policies that have severely impacted pharmaceutical prices and
have been widely criticized by industry leaders.
Cüneyt Balikçioğlu, general manager of Ferring Turkey
|
Starting in 2004, the government established a revised reference pricing system for pharmaceutical reimbursements. The reference
price of an original product is based on the lowest ex-factory price among five EU reference countries, including France,
Spain, Italy, Portugal and Greece. In 2009, the Euro/Turkish Lira exchange rate was set at 1.9595. Critics argue that this
rate is not representative of current price levels.
During September 2009, the government also announced a price decree that led to higher discounts on innovative drugs. As a
consequence of these pricing policies, pharmaceutical companies operating in Turkey experienced great difficulty maintaining
profitability.
The International Investors Association (YASED), a non-governmental organization that represents international companies operating
in Turkey, has taken issue with pharmaceutical cost containment policies.
Učur Özkutlu, chairman of the association's Access to Health Working Group, said, "The past three years have been lost from
our side. The discounts have gradually increased from 23 percent to 32.5 percent to 41 percent today. In that context, the
pharma companies in Turkey have faced the worst setback ever. While the total market growth was 2.7 percent, multinational
companies' growth here was negative 2.5 percent last year."
çetinel Sapmaz of Janssen said, "The new pricing mechanism has enforced not only the lowest prices in Turkey, but also a high
number of mandatory discounts. This has put the country at a level that is 50-60 percent lower than mean European prices.
We do not find this sustainable."
Cüneyt Balikçioğlu, general manager of Ferring Pharmaceuticals' operations in Turkey, entered the market in 2005 with high
hopes. But the hurdles he faced the past few years stunted the growth that he was hoping to achieve.
"We were not only negatively affected by the price discounts, but also by the fixed exchange rate that hasn't been adjusted
for the last couple of years and reference pricing issues. Prior to these developments, our parent company was putting a lot
of emphasis and positive outlooks on our Turkish branch," he said.
"With the impact of these developments, we were not able to live up to those expectations. In my opinion, I think that we
could have achieved at least three times the success and contribution that we have now realized, had these changes not taken
place. I find this both disappointing and frustrating," Balikçioğlu said.
Matthieu Accolas, general manager of Servier Turkey
|
For Servier, a French pharmaceutical company, the pricing constraints have led the company to focus on its core drugs in Turkey,
rather than diversifying. Matthieu Accolas, general manager for the company in Turkey, explained, "In a situation like this,
it is critical to focus on the drugs which are sustainable. At the same time, we recently put together a team in order to
identify the best and most effective ways to adapt to the needs of the patients and the doctors, to ultimately bring new answers
and solutions to the market."
As Turkey's two-year Global Budget plan comes to a close, industry leaders are hopeful that negotiations of the next budget
period from 2013-2015 will be more favorable.
Servier Turkey Team
|
Sevindik of AIFD said, "Our first meeting to discuss the next budget with the Social Security Institution and the Ministry
of Health was a positive one where, unlike before, all of the relevant stakeholders were present. Obviously, this creates
a much better environment that will allow us to build a more rational and realistic budget and discuss the system for a sustainable
financing of pharmaceutical spending."
The SGK has also indicated that the next budgetary period could alleviate some of the pricing pressures. Fatih Acar, president
of the SGK, said, "As public management, we don't desire to continue controlling the drug expenditures with public discount
increase and reduces in price. We intend to create a stronger and more sustainable industry. I think this is very significant
for the future of the sector."
|
PharmExec Blog
Follow Us
RSS
Bookstore
