Turkey’s efforts to control rising rates of COVID-19 are compromising the ability of hospitals to pay their debts to medtech and pharmaceutical companies. The government has devised a payments plan, but there is catch.

The Turkish medtech industry’s ongoing hospital payments problems appeared likely to come back onto the government’s agenda, with the national economy recovering somewhat in late 2019. But COVID-19 dashed those hopes.

Growth prospects for Turkey’s medical technology market are significant, but local companies have complained about public policies that are harmful to business and about the ongoing crisis in the hospital system. Now, international medtechs are starting to react, with some downscaling local operations and portfolios. Association of Research Based Medical Technologies Manufacturers president Umut Gokalp laid out the problems being faced by industry, and what action he thinks the government should take.

The Turkish government’s drive to establish domestic manufacturing for vaccines is showing tentative signs of getting off the ground. New partnerships are forming between Turkish and international partners. However, lack of local know-how is hampering progress.

Late payments of medtech bills by hospitals combined with persistently low reimbursement prices have pushed Turkish device manufacturers to the brink. But after a recent intervention from the industry, the government has finally done something to address industry’s calls for systematic and comprehensive improvement of medtech reimbursement prices.

The Turkish Government’s carrot-and-stick “localization” policy has started to yield results with some multinational pharma companies including GSK and Sanofi disclosing joint production ventures with local companies, but these ventures have been limited by difficult economic conditions and worsening investment environment, and the fixed euro rate.