Medical Devices: Turkish Healthcare Market
Medical devices abstract: With the 15th largest economy 1 in the world and an annualized average GDP of 4% 2, Turkey is an economic powerhouse. Its manufacturing sector has experienced vigorous growth 3, offering US medical device companies a strong infrastructure if they choose to manufacture their product in-country. Even more significantly, a variety of socioeconomic factors has converged to create a welcoming market for American-made medical devices. To be sure, the Turkish healthcare and medical devices market has the same crowding and competition as most markets. However, significant room remains for foreign companies with innovative (i.e., not currently available from Turkish healthcare manufacturers) products. American firms should strongly consider localizing their medical devices for the Turkish healthcare market, especially if they manufacture specific medical technologies as detailed in this article.
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Why the Turkish healthcare market for medical devices?
The 2016 Turkish healthcare market offers exciting opportunities for American medical device manufacturers. Turkey’s healthcare system continues to modernize, expand and improve. At the same time, a rising GDP and near-universal healthcare bring increasing numbers of Turks into clinics and hospitals for medical procedures. A whirlwind tour of favorable factors would necessarily include:
- Top 20. Turkey has been ranked among the top 20 medical device markets 4 in the world in terms of value.
- Duty-free. Unlike many countries, Turkey has no legislation 5 favoring domestic manufacturers and penalizing foreign imports. Additionally, because of the European Union-Turkey Customs Union, Turkey imposes no duties on CU member countries. More importantly for American medical device manufacturers, most medical devices from the USA are also able to enter the Turkish market duty-free.
- Turkey wants foreign medical device manufacturers. The Turkish government has a strong commitment to attract foreign companies. To that end, they have made every effort to streamline the approval process and lower barriers to entry.
- Universal healthcare. Turkey’s so-called universal healthcare system covers 95% of its population 6, allowing physicians and healthcare administrators a certain amount of latitude to implement the technologies they find to offer the best solutions for the best value. Following the appropriate approval procedures, the medical stakeholder will have the backing of the Turkish Social Security Institute in their procurement decisions. If you, the American medical device manufacturer, happen to solve a problem faced by doctors, medical techs, nurses or other medical personnel in Turkey, you have a great shot at winning the sales contract.
- Good doctors. Turkey’s doctors are among the best anywhere. In fact, they always have been. The biggest problem with the Turkish healthcare system was never doctors: it was outdated or inadequate facilities, and also a shortage of trained nurses. Which brings us to the next point…
- A revamped healthcare infrastructure. Turkish President Recep Tayyip Erdoğan has focused heavily on building new healthcare facilities (327 in the 2002-2013 period!), on modernizing Turkey’s existing hospitals and clinics, and also on education and training to expand the ranks of healthcare staff. Government emphasis on improved healthcare shows no signs of abating, but rather appears to have sufficient momentum to continue for the foreseeable future. And, it’s working. Per capita spending on healthcare in Turkey increased 236% 6 over the same 2002-2013 interval. Correlating to the revenue uptick, hospital beds increased from 164,471 to 200,072 4 between 2002 and 2012.
- More surgeries. More and more Turks are having surgical procedures. Whether as an outcome of an improving Turkish healthcare system or of a rising GDP (or, more probably, some combination of the two), Turkish citizens are flocking to hospitals and clinics for a variety of operations. Over the nine-year period between 2002 and 2011, surgical procedures in Turkey increased by 162%. 6 More surgeries necessitate more equipment, driving the demand for newer and more innovative medical devices.
- More organ transplants. Organ transplants (a subset of the surgical procedures discussed above) increased 500% 6 during the same 2002-2011 timeframe. As with other high-risk medical procedures, organ transplantation demands the best equipment available, creating a huge opening for US manufacturers of transplant-related devices.
- Longer lifespans. Standards of living in Turkey have enjoyed a steady upward trajectory over the past few decades. As a result, Turks are living longer. A larger population of senior citizens requires sophisticated healthcare infrastructure.
- Young, highly educated population. With a median age of 29 and a literacy rate of 94% 16, Turkey harbors a formidable workforce. Almost half of all Turks go on to get a secondary education 17. Such demographics favor continued economic growth.
- Medical tourism. Turkey has become a medical tourism destination, drawing patients from all of its neighbor countries, as well as from Europe more generally. While precise figures tend to be heavily disputed, 7 internationals continue to flock to Turkey for a variety of medical procedures. Estimates from the Turkish Ministry of Health claim 74,000 international patients in 2008, 262,000 in 2012, and a projected two million annually by 2023. Even if these official statistics have been inflated, other sources corroborate 8 the general upward trend of medical tourism to Turkey (some Istanbul medical centers reportedly derive almost half of their revenue 9 from foreign customers). There are many reasons Turkey attracts so many would-be patients. As we have already noted, heavy government investment in medical infrastructure has produced world-class facilities. An internationally-trained, multilingual staff can make their international clientele feel at ease. Most importantly, customers love the Turkish prices on surgical procedures. For example, a coronary angioplasty in the US averages around $21,000 10, while the same operation costs $5,000-$6,000 in Turkey 11; a hip replacement costs roughly half 11 of what it would in the UK; an adenoidectomy (surgical removal of the adenoids) in Turkey is discounted 75% 12 from the cost of the procedure in Spain. For manufacturers of medical devices, the rising influx of medical tourists into Turkey presents one more incentive to have one’s product in the Turkish healthcare system.
- Electronic records. Turkey is aggressively adopting electronic systems 6 for managing patient records and other healthcare-related administrative functions. Beginning in 2005, the Ministry of Health launched an initiative in which they partnered with private industry for custom software development. In addition to the typical record-keeping functionality, Turkey will establish a tele-medicine system for reaching remote areas. In the overarching plan, all elements of the Turkish healthcare system will be integrated into a single electronic system. This ambitious plan leaves plenty of room for US companies to offer superior solutions to Turkey’s healthcare integration project.
- EU membership? Turkey is a candidate country for EU membership. To be sure, a number of complications 13 must be resolved for Turkish accession to the EU. However, EU inclusion of Turkey would mean unfettered access to EU markets from a base of operations in Turkey.
- EU MDD. Turkey recognizes EU medical device directives (MDD). Therefore, if you’ve already cleared your medical devices for the EU market, you’re only a few formalities away from being able to sell in Turkey.
How to sell medical devices in Turkey
In light of all the reasons in favor, penetration of the Turkish medical devices market is not without its hurdles. These are mostly red tape and localization issues, with a couple logistical complications thrown in for good measure. Note that the Turkish Ministry of Health does not allow foreign companies to sell used or refurbished medical devices in the country.
- CE marking. To sell your medical devices in Turkey, you must have the CE 5 (Conformité Européenne) marking. The upside of this requirement: if you’re selling your medical devices in Europe, this is one less hoop to jump through. CE marking represents a stamp of conformity to applicable EC (European Community) directives that regulate commerce within the EEA (European Economic Area). The CE mark consists of the CE logo, and, typically, a four-digit ID number that indicates which notified body performed the assessment of conformity on the product. A rather vague category of “custom-made medical devices,” —intended for specialist trials, exhibitions, and highly specialized applications— enjoys exemption from the CE marking requirement. If you think your medical device might fall under the “custom-made” exemption, consult with a Turkish law firm, such as Gün + Partners, that understands the Turkish healthcare regulatory system. To get the CE marking on your medical device, go through the following steps.
- Do enough research to know which directives and standards apply to your particular product
- Based on your research, determine if an independent conformity assessment is required
- If the conformity assessment is required, have it performed (as many times as necessary, fixing nonconformities if found)
- Compile and keep all required technical documentation at the ready
- Place the CE marking and complete the EU Declaration of Conformity, a signatory document
- Localization. Translate all manuals, placards, labels, promotional materials, and other documentation into Turkish. This must be done by an English-to-Turkish translator who holds a Turkish Ministry of Health certification. To belabor the point, it is not sufficient that translators have fluency in both English and Turkish, even if they are industry experts. They must have taken a MoH-approved certification course and received their certificate.
- Registration. Register your medical device with the Ministry of Health. If you want to be eligible for insurance reimbursement, that is. Which you do. Reimbursement is handled by the SGK, the Turkish Social Security Institute. The SGK will assign a set reimbursement value based on their Healthcare Implementation Communique (SUT), a compilation of medical technologies and their associated reimbursement schedules. Every few years, SGK updates SUT to include the latest medical technologies and procedures. If your medical device is not listed in SUT, you will need to appeal to SGK for acceptance of your product into SUT. Should you be tempted to skip this MoH-SGK-SUT bureaucracy entirely, just remember that you would then be cut off from the large public sector and would be limited to the private sector that comprises only 2-3% of the Turkish healthcare market. Additionally, your product will need to be registered in the Turkish Pharmaceutical and Medical Device National Databank (TITUBB). Further information can be found here.
- Sales presence. A US medical device manufacturer, in order to sell in Turkey 6, must either establish an operation in-country, such as a sales office, or partner with a Turkish firm that can act as a distributor. For most SMBs, the latter will be the most attractive option, as it poses the lowest barrier to entry. One benefit of such a distributor partnership: the distributor can handle many or all of the Turkish registration and conformity processes.
- Advertising. Pay attention to advertising restrictions 14. The Regulation on Sales, Advertising and Promotion of Medical Devices (2014) forbids advertising medical devices to the general public if those devices are intended for use by healthcare professionals. Certain restrictions apply to the advertisement of medical devices to healthcare professionals, as well. Again, a Turkish law firm familiar with the commercial regulatory environment can be invaluable for navigating these waters.
What medical devices to sell in Turkey
About 6,000 companies 6 operate within the Turkish healthcare market. Of these, approximately 100 manufacture medical devices & equipment. Most of these domestic manufacturers make relatively low-tech items 15 such as hospital furniture, surgical tools, disposable items, stents and the like. While Turkish R&D is producing some high-tech medical devices (e.g., the Robogait), significant space exists for US manufacturers to market medical devices of higher sophistication, greater complexity, lesser invasiveness or more recent invention. Specifically, market research by such organizations as the US Department of Commerce and the Emergo Group reveal a demand in the Turkish market for the following:
- Diagnostics and imaging. From MRIs to molecular imaging to cytogenetic pathology tests, cutting-edge diagnostic technologies are poised to do well in the Turkish healthcare sector.
- Point-of-care. Minimally invasive point-of-care technologies are in demand. Such rapid-result solutions as pulse oximetry, portable ultrasonography and malaria antigen detection tests continue to advance in sophistication and accuracy. And, the Turkish medical market welcomes each improvement.
- Advanced surgery. Turkish surgeons want the latest in robotics-assisted surgery, as well as other surgical devices. If it improves patient outcomes and/or makes a surgery faster, safer, or more precise, it will find a ready market in Turkey.
- Cancer. Turkish oncologists and cancer centers want the latest US product advances in needle-free drug transfer, IV management, and anesthesia delivery, in addition to other cancer-related technologies.
- Clinical. As US biomedical equipment manufacturers continue to innovate, Turkish healthcare R&D firms want the latest clinical chemistry, bioanalysis and reagent technologies.
- E-health and M-health. Systems and technologies for improving electronic database administration, health informatics, telemedicine and mobile health technologies will be able to augment —or in many cases edge out— technologies used by the Turkish Ministry of Health as they push toward a completely integrated electronic health system.
- Implants. US biomedical innovation companies tend to develop the most cutting edge prosthetics, orthopedic implants, and trauma-related implants. Such innovations in surgical implant technology are finding their way into the operating rooms of Turkish orthopedic surgeons and other specialists.
- Remote monitoring. With many Turkish healthcare patients outside of major cities, remote monitoring will grow in prevalence. Via remote technologies, doctors will have vital health data from remote populations at their fingertips. Smaller, far-flung clinics will be armed with vital information about the physical condition of their constituents, allowing them to prioritize their limited resources. Disruptive or improved monitoring technologies will have an excellent shot at edging into Turkey’s market.
Summary of Turkish Medical Device Market Conditions
Now is the time to enter the Turkish healthcare market. Turkish manufacturers of medical devices, for the most part, focus “on low value added products,19.” Most likely, this is because they lack the substantial advantages that US and European companies enjoy with their countries’ research and development legacies. To fill the gap, European and American corporations have entered the Turkish healthcare market, but the Turkey’s need for advanced medical devices remains far from filled. In fact, the opposite appears to be true —the demand for specific medical devices technology (detailed above) seems to be greater than ever. Making the move to sell medical devices in Turkey requires some time, expense and difficulty; significant research is advisable. If you decide, based on your findings, that your product fills a demand in the Turkish healthcare market, any barriers to entry should offer a huge return on investment.
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