BMI View: A strong health care sector and more certain drug pricing policy will drive pharmaceutical sales in value terms over the next 10 years and improve the commercial opportunities for pharmaceutical manufacturers. Despite this positive development, cost containment measures will remain a risk, as will the political situation with neighbouring Syria and nearby Russia .
Headline Expenditure Projections
Pharmaceuticals: TRY18.72bn (USD8.56bn) in 2014 to TRY20.81bn (USD7.38bn) in 2015; +11.1% in local currency and -13.8% US dollar terms. Forecast unchanged in local curren cy and down in US dollars compared with previous quarter due to revised exchange rate expectations.
Healthcare: TRY95.78bn (USD43.78bn) in 2014 to TRY107.17bn (USD38.01bn) in 2015; +11.9% in local currency and -13.2% US dollar terms. Forecast unchanged in local currency and down in US dollars compared with previous quarter due to revised exchange rate expectations.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||9.126||8.559||7.379||7.313||7.834||8.451||9.175|
|Pharmaceutical sales, % of GDP||1.11||1.07||1.08||1.08||1.08||1.08||1.09|
|Pharmaceutical sales, % of health expenditure||19.9||19.5||19.4||19.4||19.4||19.4||19.4|
|Health spending, USDbn||45.913||43.782||38.005||37.631||40.305||43.495||47.267|
Turkey's Pharmaceutical Risk/Reward Index score for Q116 is 54.7, up from a score of 52.3 in the previous quarter on the back of an improved rating in the 'Rewards' category. The country is ranked the seventh most attractive business environment out of the 20 markets surveyed in Emerging Europe. Turkey's large drug market, coupled with the sector's long-term growth potential, means the country scores higher than the average for the region on this indicator. In terms of risks, several rounds of pricing reforms mean the country scores less favourably, and below the regional average for this indicator.
Key Trends and Developments
In November 2015, Turkey's PM Ahmet Davutoglu revealed a comprehensive plan to enhance the country's economy through the implementation of wide-ranging structural reforms in various sectors, including healthcare. A government committee will monitor the proper implementation of the plan, Davutoglu noted. The reform plan includes: decreasing import dependence, commercialisation in primary technology areas, structural transformation in healthcare industries, and increasing health tourism.
In October 2015, the World Bank praised Turkey for its healthcare reforms in its 'Going Universal' report. The report highlighted that an advanced quality assurance system offered by Turkey's health ministry has helped to control out-of-pocket expenditure in the country. Turkey is among the developing countries where out-of-pocket expenditure for healthcare is relatively low.
BMI Economic View
Turkish real GDP surprised to the upside once again in Q315 with 4.0% y-o-y growth compared to Bloomberg consensus estimates of 2.7%, prompting us to revise up our 2015 GDP forecast from 2.8% to 3.3%. That said, the composition of growth remains skewed heavily towards consumption, supporting our view that Turkey's external rebalancing will grind to a halt in 2016 with the current account deficit still hovering around 5.0% of GDP. Combined with elevated policy risks, external headwinds and a mounting domestic debt overhang, the challenges facing the economy in the coming year remain prominent.
BMI Political View
A decisive victory for Turkey's Justice and Development Party (AKP) in the November 1 snap election has been positive for the short-term growth outlook. Reduced political uncertainty is reflected in a strong bounce in the November consumer and business confidence reading, which will support consumption and investment in the coming months. However, a return to single-party rule under the AKP is no panacea as significant macro headwinds and policy risks lie ahead on various fronts.
The Turkey Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Turkey Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Turkey pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Turkey, to test other views - a key input for successful budgeting and strategic business planning in the Turkish pharmaceutical and healthcare market.
- Target business opportunities and risks in the Turkish pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Turkey.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.