Turkey: A Promise Restored?

Feb 01, 2013

With the allure of EU accession and an aggressive commitment to making local firms globally competitive, Turkey for the past decade has been a totemic symbol of the promise—and pitfalls—of the emerging markets. A growing middle class with health purchasing power has led to more opportunities for foreign innovative drug makers, but there is a down side too, in the form of interventionist trade and regulatory practices as well as a subtle trend toward xenophobia as the prospects for Turkish membership in the European Union fades. What's next? A new attitude more open to the industry's potential, if the right policies are followed.

Turkey is a banquet for healthcare investors. Drug multinationals started flocking to the country in the late 1990s, establishing low-cost manufacturing and production hubs to feed their businesses in Europe and the Arab region. Mature local companies such as Bilim Ilac, Dr. F Frik, and Biofarma began catching the eye of Big Pharma—acquisition and consolidation were daily buzzwords as the market reached its peak growth in 2005. By then, around 300 pharma companies were operating in Turkey, more than 50 of these were multinationals, including most of the Big Pharma top 20; in 2010, the Turkish pharma market was ranked the sixth largest in Europe and 14th in the world. With a population of 67 million, consumption rose to around $3 billion, establishing Turkey as the biggest pharma market in the Middle East and the fastest growing in the Mediterranean region.

The boom times also saw an unprecedented series of government reforms—including the introduction of a universal health insurance scheme—that reshaped Turkey's healthcare markets. The number of people covered by the public insurance system grew from 50 percent in 2000 to 86 percent in 2011, with the goal to hit 100 percent last year. Consumption soared: physician visits per capita increased from three visits in 2002 to eight in 2011, leading to increased satisfaction with the health service, which posted an 81 percent favorable rating in 2011. From 2003 to 2011, average life expectancy in Turkey increased by 2.5 years, from just under 72 to over 74 years.

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