Weakened Currency Is Number-One Threat For Foreign Drugmakers

BMI View: While the Turkish pharmaceutical industry has achieved some concessions following additional price cuts and public discounts announced in November 2011, the impact of the November decree remains negative. That aside, BMI emphasises that the number-one concern for drugmakers in 2012 should be lira weakness. BMI's Country Risk team have further revised down our expectations for the lira in 2012. With publicly purchased drug prices tied to a historic lira/euro exchange rate, there is no way drugmakers can raise prices to offset the weakness of the local currency and ensure stable repatriated revenues. This means global drugmakers in Turkey are completely exposed to lira weakness and this will add to the list of challenges already faced by the industry.

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