Türkiye'de İlaç ve Sağlık Konferansı Prof. Dr. Arif ESİN'in Konuşması

Prof. Dr. Arif ESİN



Republic of Turkey has put in effect the Act No. 4054 on the Protection of Competition on December 13, 1994 within the scope of adjustment to EU. The Competition Board, established within the framework of Act on the Protection of Competition, began its activities 27 months after the Act has come into effect. The Competition Board, has swiftly formed the Institute of Competition, and hired specialist staff, and effectively began its activities as of November 5, 1997.



The legislation that regulates the Pharmaceutical Industry has conflicts with the Act No. 4054 on the Protection of Competition on some basic issues.



The prices of the medical and pharmaceutical medicament/drugs, the generic drugs and "codex" vials that are manufactured in Turkey are regulated by the Council of the Ministers Resolution No.84/8845 dated December 4, 1984 and the Communique issued by the Ministry of Health dated September 1, 1995, both according to the amended Article No.7 of Act No. 1262 dated May 14, 1928 the amendment of which was made in the Act No. 4348 dated January 4, 1943.



According to the foregoing, pharmaceutical manufacturers submit the sales prices that they have set to the Office of the General Manager for Drugs and Pharmacies of the Ministry of Health in writing, before they begin supplying the drug to the market. The Ministry of Health accepts or rejects this price on condition that it must meet the following profit margins given below. These conditions, specify the profit margins of the manufacturers as well as the profit margins of the distributors and pharmacies. 



In this context, the spirit of the Act No.4054 on the Protection of Competition, that is the basic principle providing that "the owner of the goods retains the control over the sales price and the sales conditions down to the level of the first independent buyer" (provided that it will not be misused by the seller who controls the market) has become invalid for the pharmaceutical industry by the direct and indisputable regulating status and the commanding manner of conduct of the Ministry of Health.



The profit margin allowed for the pharmaceutical manufacturers is calculated so as not to exceed the annual sales income of the subject company by more than 15%; and for individual drugs it is calculated so as not to exceed the annual sales volume of the subject drug by more than 20%. The Distributor's sales price is calculated by adding maximum 9% to the manufacturer's sales price, and the retailer's sales price is calculated by adding maximum 25% to the distributor's sales price.



Thus certain articles of the existing legislation that is related to the formation of the pricing policies directed to the distribution system of the pharmaceutical industry is in conflict with the Act No. 4054 on the Protection of Competition. 



Furthermore, a series of regulations concerning the payment terms, discounts, free goods, new price application and tenders are contrary to the terms set out in Article 4 of the Act No. 4054 on the Protection of Competition.



The regulation of the promotions are based on Article 27 of the Medical Promotion Regulation for Human pharmaceutical and medical drugs of the Ministry of Health issued on September 7, 1990. The relevant article requires that the promotions be regulated exactly as follows:



"Pharmaceutical distributors may never make any promises of gifts or like to pharmacies to increase their sales.".



The condition of not giving any gifts to the resellers on the basis of their sales volume, regardless of the ethical considerations, is against the law and forbidden, within the scope of Article 4 (a) of the Act No. 4054, from the point of view of setting up the conditions of all types of buying and selling. Ethical consideration does not give any rights for violating the laws.



Article 18 of the Subject Regulation; 



"Promotional material of reminding nature prepared with the objective of presentation of the drug should meet the following qualifications.

a) Such materials should be suitable for medical and professional use and their monetary value should be within modest limits. 

b) They bear the drug's commercial name, and the name(s) of the manufacturer and/or the importer.

c) The promotional material may not be of type that may be used in locations open to general public".



The condition related to the promotion of drugs also falls within the scope of Article 4 (a) of the Act No. 4054, and by the same considerations is against the law and forbidden.



Traditional sales increasing actions such as offering discounts or free goods, are regulated according to Article 4 of the communique of the Ministry of Health concerning the Drug Prices dated September 1, 1995; The principle that is stated in the communique as "in calculating the profitability, discounts for up to 10% of the gross sales volume are taken into account " and the 10% limitation for the discounts, are against the law and forbidden, within the scope of Articles 4 (a), (c), (e) and (f) of the Act No. 4054.



In conclusion, the laws, resolutions, communiqués and relevant directives and sanction initiatives of the Ministry of Health, clearly contradict the Act on the Protection of Competition, and the industry is placed in a position acting against the law.



If no changes are made in the existing laws, then the members of the industry are left with two options: to act against the Act No.4054 on the Protection of Competition, or to act against the other laws that regulate the industry and the practices of the Ministry of Health which is the responsible authority. There are punitive sanctions involved in both cases.



In this situation, it is necessary for the Office of the Presidency of the Institute of Competition to initiate the necessary actions before other public institutions with the objective of taking regulating measures for our industry as required by Article 30 (f) of the Act.