The life sciences and healthcare sectors are considered industries of strategic importance in Turkey, especially when taking into consideration their social and economic impacts. Turkey showed its commitment to healthcare reforms with the implementation of the “Healthcare Transformation Program” introduced in 2004 by the Ministry of Health. These reforms marked a significant improvement in Turkey’s healthcare system, which is backed by investments in R&D and innovation in the healthcare sector.
Some key facts and figures in the Turkish life sciences sector include:
- The Turkish market for pharmaceuticals reached a size of TRY 16.8 billion in 2015, growing by 15.5 percent over 2014. Unit sales rose by 6.7 percent over the same period, reaching 1.95 billion units.
- According to IMS Health Report, Turkey is one of the top 20 “pharmerging” countries, having been ranked 19th in 2014, and expected to be ranked 17th in 2019.
- The Turkish market is expected to grow by 11-14 percent between 2015-2019 (IMS Consulting Group)
- There are approximately 300 pharmaceutical entities operating in the sector. Among the 67 manufacturing facilities that meet international standards, 12 are owned by multinational companies.
- There are 12 raw material producing facilities in Turkey, 3 of which are owned by multinational companies.
- Approximately 30,000 people are employed in the sector and more than 11,500 products are produced.
- During 2009-2015, pharma sales grew by 27.8 percent and 43 multinational pharmaceutical companies entered the Turkish market, bringing the number of foreign entities in the market to 116.
- Pharma exports, which stood at USD 612 million in 2010, have grown by 53.4 percent over the past five years to reach USD 939 million in 2015.
- Turkish pharmaceutical manufacturers are exporting to more than 170 countries, with the bulk of that trade occurring with the EU, MENA, and CIS countries.
The Ministry of Health and the Ministry of Development are currently working on a joint long-term strategic plan for the pharmaceuticals industry, which is experiencing growth in parallel with the world markets. This plan aims to create a market where domestic production of pharmaceuticals and medical devices will account for 60 percent and 20 percent respectively of total domestic demand in terms of volume.
A rapidly growing young population is one of the key factors driving demand for healthcare in Turkey. According to the Economist Intelligence Unit forecasts, the healthcare sector in Turkey is set to boom as healthcare spending per capita will increase at a CAGR of 5.6 percent during 2013-2017, while most developed countries will be experiencing relatively lower growth rates.
Favorable long-term macroeconomic conditions and increased access to medicine will continue to drive demand for medicine and attract foreign pharmaceutical companies, which in turn, will make Turkey an increasingly important location for pharmaceutical manufacturing in Central and Eastern Europe.
With regard to healthcare facilities, the Ministry of Health is planning to open organized health zones, which will include;
- hospitals,
- rehabilitation centers,
- thermal tourism facilities,
- nursing houses,
- health techno-cities,
- R&D centers.
The Turkish government has also taken on an ambitious healthcare public private partnership (PPP) program. According to PPP professionals, Turkey is the 2nd most attractive market globally for PPP projects in the medium to long term. Investments in the healthcare sector are expected to continue as the government strives to increase the number of hospital beds per 10,000 people to 32 in 2023 from the current level of 26.5.
With considerable potential for growth, the Turkish healthcare sector provides a vast number of investment opportunities. The Ministry of Health will be spending an estimated TRY 100 billion in lease payments for its Healthcare PPP Program, whereas free healthcare zones, health tourism, and e-health provide similarly attractive investment.
Moreover, the government aims to boost manufacturing infrastructure through the establishment of special pharmaceutical zones, with the goal to make the country a global pharmaceutical R&D and production hub. The Turkish government also aims to make the country one of the world’s top ten economies in healthcare services by 2023 by increasing R&D expenditures to 3 percent of GDP and by increasing exports to USD 500 billion. As expectations for readily-accessible and higher-quality healthcare services increase in line with the advancement in economic welfare, healthcare spending per capita in Turkey is expected to almost triple by 2023, hitting USD 2,000.
Date: 13 March 2017
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