Drug firms complain of lira’s fall

ISTANBUL- Hürriyet Daily News

Drug makers are still not smiling despite a recent increases in prices. DAILY NEWS photo

The Turkish government’s recent reduction in the value added tax (VAT) on drugs and increase in drug prices have not solved an ongoing dispute between the Health Ministry and drug makers, according to leading drug associations in the country.

Drug manufacturers have significant losses due to the Turkish Lira’s depreciation against the euro and U.S. dollar and the government’s recent decision does not cover the more than $1 billion in losses due to the currency depreciation, said Association of Research-Based Pharmaceutical Companies (AİFD), Pharmaceutical Manufacturers Association of Turkey (IEIS) and Turkish Pharmaceutical Manufacturers Association (TİSD) in a joint email statement.

Foreign exchange fluctuations cause serious financial loss in the industry and patients are also hurt, the statement read yesterday.

The government fixed the exchange rate applied in drug imports at 1.95 liras per euro in 1999. The lira was trading at 2.46 per euro yesterday afternoon.

Due to lira depreciation since 1999, drug manufacturers in the country have lost 2.5 billion liras ($1.32 billion), according to the statement. Pharmacy revenues have also declined by as much as 20 percent, according to the statement.The pricing dispute between the government and drug manufacturers was resolved, said Murat Karaşen, general manager of the country’s Social Security Institution (SGK) on Dec.19.