Healthcare and Pharmaceuticals in Turkey
Turkey’s pharmaceutical market became the 6th largest in Europe and the 16th largest in the world in terms of sales in 2012. In 2014, pharmaceutical sales saw a 37 percent increase compared to USD 6.2 billion in 2004, reaching a stunning USD 8.6 billion.
Domestic and international investors are ramping up their investments in the pharmaceutical sector to take advantage of Turkey’s attractive market, where the healthcare and the pharmaceutical sector grew by 5.8 percent and 8.9 percent respectively from 2012 to 2013. Expenditures on pharmaceuticals are expected to reach to TRY 20.66 billion in 2015, a 10.3 percent increase on the TRY 18.72 billion figure of 2014. Expenditures on healthcare, meanwhile, are expected to increase by 10.4 percent from TRY 96.01 billion in 2014 to TRY 105.98 billion in 2015, while the growth in real GDP is projected to be 3.5 percent for the same period.
Turkey has one of the largest and youngest labor pools in Europe, with more than 42 percent of the population aged between 24 and 54, and the strength of Turkey’s labor force is reflected in the pharmaceutical sector. In the 2011-2012 academic year, more than 41,000 students graduated from vocational training schools and universities in fields related to the pharmaceutical sector.
The Turkish healthcare system has undergone the largest transition in its history over the last decade. The successes of health reforms, specifically the Health Transformation Program (HTP), have brought about a marked improvement in the healthcare system and have enhanced access to healthcare facilities.
The Universal Health Insurance (UHI) program was put in place to provide healthcare to every Turkish citizen; and as a result, the Social Security Institution (SGK) has become the number one buyer on the purchasing side of healthcare services.
A rapidly growing young population is one of the key factors driving demand for healthcare. Over the next two decades, as the current young population of Turkey ages, there is likely to be a sharp rise in healthcare demand as almost 80 percent of a person’s healthcare requirements typically occur after the age of 40-50.
Turkey will experience continued economic expansion and rising incomes which, in turn, will create more demand for health services and products, and these increases are reflected in the healthcare spending projections. According to Economist Intelligence Unit (EIU) forecasts, the healthcare sector in Turkey is set to boom by a CAGR of 5.6 percent between 2013 and 2017, while most developed countries will be experiencing relatively lower growth rates. Turkey is also expected to surpass the forecasted world average with this growth rate.
The social security system now covers approximately 82 percent of the total population, with 62.8 million people now covered. Investments in the healthcare sector are expected to continue as the government strives to increase the number of hospital beds per 10,000 population to 32 in 2023, up from the current figure of 27.2. The Turkish government has also taken on an ambitious healthcare PPP program.
The Ministry of Health is planning to open health “free zones”, which will include hospitals, rehabilitation centers, thermal tourism facilities, nursing houses, health techno-cities and R&D centers, to be built in big cities where transportation will be relatively easy.
According to PPP professionals, Turkey is the second most attractive market globally for PPP projects in the medium to long term, and official targets related to the adoption and development of e-health systems present significant investment opportunities for ICT infrastructure companies.
Turkey’s healthcare expenditure will continue to grow over the long term due to underlying fundamentals driving demand for healthcare services, its population dynamics, increasing urban migration and the burden of disease in the country. Furthermore, significant private sector investments in healthcare facilities will see the country rise in importance as a medical tourism hub.
There are plans to increase health tourism revenues to USD 20 billion by 2023, and as a result, healthcare spending per capital has been targeted to almost triple by 2023, reaching USD 2,000.