Turkey obtains pharmaceuticals through domestic production and import. In 1997, the total consumption of pharmaceuticals was US $2070 million at ex factory prices, or US $32 per person. These figures are low when compared to the pharmaceutical consumption of western European countries.

In 1998, the pharmaceutical industry imported pharmaceuticals worth US $1180 million, including raw materials (US $769 million) and finished pharmaceutical products (US $411 million). In the same year, the industry exported US $129 million, including raw materials (US $61 million) and finished pharmaceutical products (US $68 million).

Pharmaceutical consumption grew dramatically between 1997 and 1998, rising from US $2070 million in 1997 to US $3310 million in 1998, but there is no clear explanation for this rapid growth. According to more recent Ministry of Health data, pharmaceutical consumption was equal to between US $4000 million and US $4500 million in 2001, or about US $60 per person.

The pharmaceutical industry is regulated by the government. The Ministry of Health determines prices by adding fixed percentages for labour, management expenses, profit, indirect profit, wholesale agent profit and pharmacy profit to the costs of raw materials and packaging. This method encourages the use of expensive raw materials and packaging, particularly for drugs with a monopoly on raw material production. New licensing regulations that closely resemble European Union regulations came into force recently, and a national patent law has been in effect since 1 January 1999. The latter is likely to increase pharmaceutical prices.

Domestic production must follow rules for good manufacturing practice, which cover all steps from raw material procurement to production processes and beyond. Production is controlled by trained inspectors and experts from the Ministry of Health, from the control section of the Refik Saydam Central Institute of Hygiene. Although Turkey has an unofficial list of essential drugs, the list has no practical implications for the pharmaceutical sector. All social insurance organizations have negative lists for prescriptions. There have been a number of unsuccessful attempts to promote the use of generic drugs, but doctors generally prescribe by brand name. Representatives of pharmaceutical companies visit doctors regularly to promote their products, and doctors are heavily influenced by the pharmaceutical industry, although there is no firm data about the extent of this influence.

Pharmaceutical companies use various methods to sell drugs to pharmacies, including direct sales from the factory and the use of wholesalers. Pharmacies are staffed by a pharmacist, one or more supervisors and an assistant supervisor. Most pharmacy customers have more contact with supervisors than with pharmacists, which suggests that customers may be inadequately informed and advised. This is a serious problem, since many drugs are sold over the counter without a prescription, and patients ask pharmacies for advice on their ailments. A system of green and red prescriptions is used to control the sale of certain drugs.

Health care technology assessment

A major weakness in the Turkish health care system is the lack of regulation and control of medical technology, in combination with economic incentives to import high-tech medical equipment. Consequently, the use (and inappropriate use) of such equipment has increased dramatically. Much privately owned diagnostic equipment is used inefficiently, from a public health perspective, and largely to generate profit.

The Turkish Medical Association (and its branches in the provinces) is the sole body charged with determining minimum prices for diagnostic and treatment-related procedures. This practice was initially intended to prevent unfair competition among health care professionals using labour-intensive procedures, but over time, the Turkish Medical Association began to determine prices for capital-intensive transactions as well. The Turkish Medical Association does not (and practically cannot) take into account variations in initial investment or operational costs, arriving instead at one price for all.

Since the price needs to cover the cost of highly sophisticated centres and allow them a comfortable profit margin, some diagnostic centres (particularly those with low capital investment) have extremely high profit margins.

Fierce competition created by multiple centres offering magnetic resonance imaging and computed topographic scanning is likely to lead investors to offer a substantial proportion of their profit to prescribing doctors. Although there is little evidence to prove this actually happens, it is a common practice familiar to every doctor. The Turkish Medical Association has recently acknowledged the existence of these under-the-table transactions and announced that they would take measures against it.