Healthcare transformation increases drug price

The increase in exchange rates in Turkey hits the pharmaceutical products after the examination fees
Wednesday, 18 January 2017 08:53

The increase in exchange rates in Turkey hits the pharmaceutical products after the examination fees. After rising hospital examination fees about %20-%60, medicine prices will also be raised. Justice and Development Party (AKP) government’s "Health Transformation Program" led increasing the external dependence on drugs and medical products.

At the meeting held in January, the Price Evaluation Commission (FDK) decided to increase the value of Euro currency from 2.1166 TL to 2.3421 TL in determining drug prices. According to the last regulation, all medicines will be sold at a rate of %10.6 beginning by February 20. Social Security Institution (SSI) is working to prevent prescription drugs from the price rise. In Turkey, a pegged exchange rate system is used to control the health expenditures in determining the drug prices.

After the SSI’s evaluation on price rise, it is planned that the citizens will not be affected by prescription drugs, while the citizens buying non-prescription drugs will pay over increased prices. The SSI, which had previously foreseen a drug price increase of 1 billion TL for this year and allocated a budget, has added 300 million TL to its budget with the rise of Euro and Dollar in the last few months. This decision also resulted in an additional burden to the Social Security Institution.

TURKEY’S EXTERNAL DEPENDENCE IN PHARMACEUTICAL FIELD

Turkey’s external dependence on pharmaceutical field has now reached a dizzying speed.

Turkey was able to meet up to 70% of its drug needs from the domestic pharmaceutical industry before putting the Customs Union Agreement into effect with the European Union in 1996. Yet, today Turkey is more dependent on external financial and pharmaceutical sources.

In 1979, the Social Security Institution’s drug factory was established in Turkey and began to provide cheaper drugs than the drugs produced by international drug companies. When the prices of drugs were examined in 2004, it can be seen that there were serious differences in price ranges (from 24% to 628%) between the drugs produced by the Social Security Institution and the generic drugs produced by other international companies. 

The Social Security Institution procured all pharmaceutical requirements from a single centre except its own-produced medicines and provided to distribute them within the institution. In addition to this, the procurement of pharmaceutical needs directly from the factory passed on huge savings. In the year of 2004-2005 when the SSK’s drug factory was closed, total drug payment of the Social Security Institution was about 7 million TL, while this number expeditiously increased to 15 million TL by 2007.

After the Social Security Institution (SSK)’s drug factory providing cheaper drugs for the citizens was closed in 2005, there is no a public drug production in Turkey today, except the drug production factory of the Ministry of National Defense which produces drugs only for the military. Most of "local pharmaceutical products" are manufactured in international drug monopolies’ factories in Turkey.

Domestic pharmaceutical companies such as Eczacıbaşı Pharmaceuticals, which have been producing drugs with the public funding for years, have been sold to international monopolies and cartels in the last twelve years.       

After the direction of drug services to independent pharmacies as a result of the AKP government’s Social Security Reform, drug consumption has rapidly increased. The pharmaceutical drug market growing 5-6% per year in the world is annually growing 15% in Turkey. Most of the imported drugs in Turkey comprise of new generation biotechnological drugs and blood products. Especially the patients who have to continuously use blood products are directly affected by the troubles in importing these products.

One of the most significant issues increasing the external dependence is that Turkey has signed the drug patent agreement in the late 1990s and the drug data exclusivity at the beginning of 2000s.

In Turkey, where the AKP government’s "Health Transformation Program" led increasing the external dependence in drugs and medical products, pharmaceutical field reveals serious evidence to see the transfer of public funding to international monopolies.