Early this year, on February 6th, 2017, the
Ministerial Cabinet has published its decision on Pricing of Human Medicinal
Products ("Decision") and announced that the requirements of the Communiqué on
Pricing of Human Medicinal Products (published in 2015) that do not conflict
with the Decision, shall remain applicable.

This transition process has come to an end at the end
of last week when, on September 29th, 2017, the Ministry of Health
("Ministry") has published the new Communiqué on Pricing of Human Medicinal
Products ("Communiqué") on the Official Gazette.

Upon publication of the Communiqué, the predecessor
Communiqué on Pricing of Human Medicinal Products (published in 2015 - "Abolished
Communiqué") has been abrogated.

II - What's New?

The Communiqué adopts a simpler and reader-friendly
language regarding the technicalities of pricing principles, while governing
Turkish drug pricing system and encouragement of domestic drug manufacturing.
The most striking amendment introduced with the Communiqué is that the prices
will be amended once a year, rather that the "twice a year" arrangement that
was governed with the Abolished Communiqué.

Some of the other major amendments introduced with the
Communiqué can be outlined as the following:

- The Communiqué, while preserving the reference
countries as is[1],
has abandoned the "reference price" wording and introduced the "real source
price" term. Although the mechanism behind the reference price calculation is
preserved, its definition is now changed. Article 3 of the Abolished Communiqué
defined the reference price as "The
lowest price of the source product in the reference markets and the market in
the countries where the batch is released / imported, respectively, or the
lowest price of the product on the market in EU countries, or the ex-factory
price of the product on the market in any country in the world". Whereas, under
Article 3 of the Communiqué real source price is described as "Wholesale sales price of the product
(announced in Euros in the price list) which is licensed and put on the market
in the country of origin". Real source price will be calculated in line with
the principles set forth under Article 5 of the Communiqué.

- As per Article 3 of the Communiqué "Price (specified in Euros on the price list)
which is the basis of the wholesale sales price in Turkey and is determined in
line with the procedures in this Communiqué" will be accepted as the source
price and its calculation will be made in accordance with Article 6.

- Pricing principles are regulated under Article 7 of
the Communiqué. In this sense, compared to the Abolished Communiqué, it is clearly
seen that the Ministry has developed and detailed the pricing principles.

- As to price increase requests, as per the Abolished
Communiqué, price increase requests due to reference price increases up to 100%
of the current ex-factory price, were assessed by the Turkish Medicine and
Medical Devices Institution ("Institution") and  price increase requests of more than 100% were
assessed by the Commission[2]. The
Communiqué has amended this rule and regulated that,

(i) In the event of a change in the source country, an
increase request of up to 20% of the current
selling price to wholesalers, shall assessed by the Institution.

(ii) If there is no source country change, increase
requests up to 50% of the current sales price to the wholesalers, shall be
assessed by the Institution.

(iii) The increase requests more than the rates
specified in subparagraphs (i) and (ii) shall be assessed by the Commission, if
the application is made during the Commission evaluation period.

In this respect, the upper limit for an increase in
the sales prices to wholesalers has been amended to 20 % where there is a
change in the source country; and to 50 % in cases where this request does not
result from a change in the source country prices. This will enable to control
the effect of a change/increase in the source country prices on the prices in
Turkey.

III - Transition Period

The Ministry has announced its transition schedule
under Provisional Article 1. In this respect, the sales prices to the
wholesalers for the products falling within the scope of the provision of "The changes in the selling price to the wholesalers
approved in Turkey due to the reference price or reference country change shall
not be reflected in the price unless it exceeds 3%. Only reference and
reference country information shall be updated." abolished by the Decision will
be updated during real source price amendment period of 2017, in line with
their source prices. Changes which lead to an increase in the prices will be
made upon the request of the license-holders, while changes which lead to a
decrease will be made by the Institution ex
officio.  These updated prices will
be effective as of the effective date of the final interim list issued at the
end of the actual source price amendment period.

Finally, amendments introduced with the Communiqué on
real source price amendment period shall not be applied to real source price amendment
period of 2017, except for paragraphs 1, 4, 5 and 7 of Article 10[3]. Provisions
under the Abolished Communiqué will be taken into account for real source price
amendment period of 2017.

[1]
As per Article 4 of the Communiqué, reference EU countries countries are
France, Spain, İtaly, Portugal and Greece.

[2]
The Price Evaluation Commission
established, under the coordination of the Ministry, with participation of the
representatives of the Ministry of Finance, the Ministry of Development, the
Undersecretariat of Treasury and the Social Security Institution.

[3] Please see a detailed
announcement of the Ministry on 2017 real source amendment period at this link:
http://www.titck.gov.tr/Duyurular/DuyuruGetir?id=3124

Gönenç Gürkaynak, Esq., Ceren Yıldız and Ecem Elver, ELIG, Attorneys-at-Law.

First published in Mondaq on October 2, 2017.