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New legislation threatens billions in R&D, hundreds of pharma sector jobs
The “Decree to Amend the Decree on Pricing of Medicinal Products for Human Use,” issued on Sept. 18, 2009, came as a surprise to many as the government has declared the biotechnology and research-based pharmaceutical sector one of nine key “strategic sectors.”
Under the legislation, expected to become effective on Monday, the government will make it so that pharmaceuticals cannot be sold for more than 60 percent of the lowest price that they are sold for in a basket of 10 EU countries.
An industry executive close to the negotiations said the lack of predictability and stability in the healthcare system were already taking a toll, with one company reporting it would be phasing out all local medicine production and shifting supply to less costly sources abroad, and another planning initial job cuts in the range of 150-200 employees. “The innovative pharmaceutical industry is overtaken by pessimism,” read a press release by the AİFD.
“It's astonishing how quickly the situation has deteriorated,” said Jeffrey Kemprecos, director of public affairs (Europe and Africa) of Merck & Co Inc. “Just a few months ago, the industry was optimistic that the government would push through reforms to support investment in the innovative medicines sector. Now companies are frantically reviewing emergency divestment plans, including closing production centers, reducing research and steep job cuts. It's deeply disappointing to those of us who have been working on an investment agenda for this sector in Turkey.”
The AİFD survey, which polled the opinions of senior executives in the AİFD, whose members comprise 40 research-based pharmaceuticals companies, found that 84 percent of the executives who responded to the survey stated that in this climate, they did not expect their companies to undertake new capital and manufacturing investments, while 36 percent responded that their companies could reconsider existing investments. Thirty-two percent of respondents said there could be more than 10 percent layoffs in their companies, while 52 percent underlined that dismissals could exceed 20 percent.
Weighing potential ramifications of the new measures to save on drug expenditures, AİFD Deputy Chairman Engin Güner said, “It saddens us having to talk about this on this day [Patients' Rights Day, Oct. 26], but these measures not only distress the industry but also entail the risk of complicating access of patients to new drugs.”
As negotiations were taking place in Ankara, Kemprecos told Today's Zaman, “While we are still hopeful for a last-minute agreement, companies are preparing for the worst.”
“We've found more than TL 2 billion in savings that we believe can get us through the current crisis without creating significant risks to the manufacturers, distributors and pharmacists in the supply chain. We hope the government realizes that these latest proposals represent a better way to achieve the same goals.”
Insiders assert that it is not only the producers but also the pharmacies themselves that will be squeezed, as they say it is more difficult to obtain medicine to dispense to patients. Many are said to be facing going out of business.
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