Who do you think might want to prevent Turkey from becoming a high-tech economy? Just take a look at the parliament’s meeting minutes.

I have never been able to forget something I once heard from a statesman: that the state is doing a thing well at the time being does not necessarily mean that thing is done right. A problem will transpire eventually, defects unveil. Take the current health policy and the public sector’s drug pricing policy. I have been calling it the legacy of the 1930s for a reason. Let me illustrate my argument with an example and then you decide.

It was thanks to cancer patient Dilek Özçelik that Turkey learned about inaccessible drugs. But then forgot it all again. Actually, the backlash came not because the young lady asked the help of the Minister of Environment and Urbanization. It came because the minister, in response to the young lady who asked for help in acquiring the drugs from abroad, offered her pocket money. But Dilek Özçelik wanted to say that she was not able to get the drugs from abroad even if she paid for them. In Turkey, mainly the state pays for drugs and sets the price as the main buyer. It sets the rate of discount for each and every drug. If it sets the price wrong, no one can acquire the drug in the domestic market. This is the very story Dilek Özçelik was trying to tell: no company is willing to import and sell certain drugs due to the respective pricing and discount policies. If the state tries to import and sell those drugs, patients end up waiting for hours in long queues. There is a system design problem here.

Again, what was Dilek Özçelik's problem when she asked the help of minister Bayraktar? Let’s take a look at a recent study by TEPAV analyst Selin Arslanhan Memiş. Dilek Özçelik was unable to find a drug called Deticene on the market. The drug, which has the active substance dacarbazine, is used to treat of malign melanoma, Hodgkins and non-Hodgkins lymphoma. The drug is produced by a French company. Due to the current pricing policy, it cannot be imported to Turkey with normal procedures. But for some time now, the state has intervened to ensure that the drug is delivered to patients. The price is paid by the Social Security Institution (SSI) since the drug is on its official list. In 2006, the cost of Deticene for Turkey  (100 mg 10 flacons/box) was 97 liras in 2006. Thanks to the current health policy, which is the legacy of 1930s statism, the Ministry of Health first drifted toward a God syndrome and then ran out of financial resources. It started to ask private hospitals and pharmaceuticals companies for discounts. By the end of 2011, the state’s purchase price decreased to 37.5 liras. Later in 1 May 2013, it rose back to 41.5 liras, but what’s done was done: the flow of the drug to Turkey on private channels ceased. The tragicomic part is that today the state imports the drug and the SSI pays 48 Euros for it! It is around 106 liras. The cost of the drug increased from 97 to 106 liras due to the policy. What is more, you cannot find the drug on the market when you need it, as Dilek Özçelik complained. It must be a joke!  Why attempt to do it if you do not know how to?

The worst consequence of the 1930s-model health policy is not that the drug was off the market temporarily. Neither is it the rising share of the state in the distribution channel. The major challenge today is that the future of health policy and the pharmaceuticals industry is not designed and considered from a budget-oriented perspective. I occasionally have the chance to talk with representatives of pharmaceuticals companies. They often talk as if the future of the sector depends on the pricing policy of the state. I speak with decision makers; they talk as if pricing is the most critical dimension of the issue. It is not. Remember, in the 1990s, in line with the standby agreements signed with the IMF, Turkey redesigned its social security system within a budgetary framework. This was a mistake also then. We keep on making the same mistake today.

If people have difficulty in acquiring certain drugs, then the pricing policy must have a flaw. It appears that the state has created a gap that it is not able to fill. Second, biotechnology might be an important instrument for Turkey’s shift to high-technology sectors. The pharmaceuticals sector is critical for this shift. The pricing policy, however, sabotages the country’s future. On top of it, the new Patents Law currently being negotiated in the National Assembly excludes biotechnological research and inventions. Who do you think might want to prevent Turkey from becoming a high-tech economy? Just take a look at the parliament’s meeting minutes. Maybe you can tell me what is going on, because I have absolutely cannot understand.

This commentary was published in Radikal daily on 14.05.2013