Pursuant to the Decree Regarding Pricing of Pharmaceuticals dated February 6, 2017 (“Pricing Decree”), the annual exchange rate in relation to the pricing of pharmaceuticals is required to be set at 70% of the annual average Euro value calculated based on the Central Bank of the Turkish Republic’s daily indicative exchange rate and announced in the previous year’s Official Gazette. The Price Evaluation Committee convenes in the first 45 days of every calendar year to determine the Euro exchange rate by taking into consideration the aforesaid principle.

While the decision of the Price Evaluation Committee was expected to be announced until mid-February and there were various expectations within the pharma sector due to significant increase of the Euro value against Turkish Lira in 2017, a “Decision Amending the Decree Regarding Pricing of Pharmaceuticals” was published on the Official Gazette on February 10, 2018. Accordingly, one provisional article is added to the Pricing Decree stating that “1 (one) Euro rate value in Turkish Liras to be used in pricing of pharmaceuticals for 2018 shall not exceed 15% of value of 1 (one) Euro rate used in the previous year”. This amendment sets forth that while determining the exchange rate for the year 2018, the Price Evaluation Committee will consider and apply this new criterion of not exceeding 15% of value of 1 (one) Euro rate of previous year along with the 70% of annual average Euro value criterion determined in current Pricing Decree and Pricing Communique.  

As a separate note, since the wording in this provisional article is particularly determined for the pricing of pharmaceuticals in 2018 only and considering the current economic conditions in Turkey, this criterion shall not be applicable for the pricing of pharmaceuticals for ongoing years unless additional amendments in the legislation are made.  

In the upcoming days, the Price Evaluation Committee shall announce the Euro exchange rate to be applied in 2018 according to the aforesaid criteria. Bearing in mind that the pricing of pharmaceuticals and determination of the exchange rate has always been a topical and debatable issue in Turkey, we expect to see further developments in relation this issue in near future.