The Turkish Competition Authority (“Authority”) published the Preliminary Report on the Pharmaceutical Sector Inquiry (“Preliminary Report”) in August 2026, which was prepared within the scope of the sector inquiry initiated by the decision of the Competition Board (“Board”) dated 08.12.2021 and numbered 21-59/844-M, with a view to examining the regulations governing the Turkish pharmaceutical sector and the current structure of the sector, identifying competitive concerns, and making recommendations for the enhancement of competition. Within the scope of the sector inquiry, information and documents were obtained from undertakings engaged in manufacturing, supply and distribution, sector representatives and public institutions; on-site inspections were also conducted at various undertakings operating in the sector.
The Preliminary Report assesses competitive dynamics across the pharmaceutical value chain, from the development of a pharmaceutical product through to its delivery to patients,, with respect to the production, market entry and distribution stages.
The Preliminary Report does not constitute a final decision and is a study through which the Authority aims, at this stage, to share its findings and assessments with the public.
I. General Overview of the Pharmaceutical Sector
The Preliminary Report states that the pharmaceutical sector is a strategic sector requiring substantial investment, technology and R&D, and that it differs from other markets due to its demand structure and extensive regulation. The fact that, in the pharmaceutical sector, the parties using a pharmaceutical product, deciding on its use and bearing its cost often consist of different actors, together with the low price elasticity of demand for pharmaceuticals, is considered among the key characteristics of the sector.
While the sales value of the pharmaceutical market in Türkiye was TRY 56 billion in 2020, it reached TRY 479 billion in 2025. In 2025, pharmaceutical products manufactured in Türkiye accounted for 89.98% of the total market in terms of units sold and 59.59% in terms of sales value.
This growth trend indicates that the pharmaceutical sector will continue to remain among the areas subject to the Authority’s supervision and monitoring. Indeed, the Preliminary Report was prepared as a result of a systematic inquiry covering the sector as a whole and contains structural findings concerning a large number of market participants.
II. Activities of the Authority Relating to the Pharmaceutical Sector
The Preliminary Report states that the pharmaceutical sector is one of the Authority’s priority areas of activity and assesses the Board’s decisions issued over the past ten years.
With respect to merger and acquisition control, it is stated that, under the regulation concerning technology undertakings, undertakings operating in the field of pharmacology are also subject to the special notification regime, and that the relevant regulations aim to prevent the early-stage concentration of market power in innovative and R&D-intensive sectors. The Authority also notes that, in merger and acquisition notifications, the submission of information regarding the parties’ potential competitive relationship may contribute to the faster completion of the review process.
This approach demonstrates that, in the pharmaceutical sector, the Authority focuses not only on the existing market structure, but also on the prospective competitive effects of the transaction. The expectation that information regarding potential competition be submitted at the notification stage indicates that pharmaceutical companies may need to structure their competition law analysis earlier and in a more comprehensive manner in M&A processes.
Although the ATC-3 and ATC-4 classifications are considered important reference points in the definition of the relevant product market, they are not regarded as determinative on their own; factors such as the therapeutic characteristics of the pharmaceutical product, prescribing habits, effects on patient groups, off-label use, pricing and reimbursement conditions should also be taken into account.
III. Competition at the Production Stage
In the Preliminary Report, competition at the production stage is addressed within the framework of the relationship between patent rights and competition law. The Authority states that certain unusual practices in the acquisition and exercise of patent rights may give rise to consequences under competition law. In this context, the Preliminary Report refers to conduct such as providing false or misleading information to patent authorities, using divisional patent applications in a manner that produces anticompetitive effects, patent clusters, withholding certain information from courts in preliminary injunction proceedings, disparaging competing products, and threatening competitors with litigation.
The Preliminary Report also addresses compulsory licensing as a mechanism serving to strike a balance between the exclusivity conferred by patent rights, on the one hand, and the public interest and the protection of competition, on the other. It is stated that, under Industrial Property Law No. 6769, compulsory licensing may arise where the patented invention is not used, where the public interest so requires on grounds of public health or national security, or where the patent holder exercises the patent right in a manner that prevents, distorts, or restricts competition. The Authority assesses that this mechanism may contribute to addressing competition concerns such as barriers to market entry and market foreclosure.
In addition, the Preliminary Report states that the Bolar exemption is a mechanism facilitating the market entry of generic pharmaceuticals following the expiry of patent protection; increasing access to patent information and transparency, as well as enhancing cooperation between the Turkish Patent and Trademark Office and the Authority, are also identified among the areas open to further consideration.
The Preliminary Report also examines the potential competition law implications of patent settlement agreements. In this context, the Authority reviewed approximately 350 patent lawsuits initiated since 2015 and conducted more detailed assessments and on-site inspections with respect to 26 identified cases. The reviews did not reveal any indication of the existence in Türkiye of “pay-for-delay” agreements involving payments in exchange for delaying market entry; however, the Authority stated that this area should be regarded as one of the priority areas requiring close monitoring.
The Authority’s express identification of this area as one that “should be monitored as a priority” suggests that the possibility of the pay-for-delay issue becoming the subject of a standalone investigation in the future should not be disregarded. In the European Union, infringement decisions issued by the European Commission in cases where patent settlement agreements were found to constitute pay-for-delay arrangements were most recently upheld by the Court of Justice of the European Union in 2023.
With respect to patent settlement agreements, it is considered that the terms of such agreements should be based on rational grounds, such as the patent term, uncertainties relating to the dispute, technical assessments, or fair licensing terms; should not involve disproportionate outcomes resulting in delayed market entry or financial benefits that cannot be explained by litigation costs; and should be limited solely to the patents subject to the dispute and the geographic market in which such patents provide protection.
The Authority also identifies increasing sector-wide transparency regarding information on patent disputes and enhancing cooperation between the Turkish Patent and Trademark Office and judicial authorities as areas open to further consideration.
At this point, the proposal to increase patent transparency should be assessed not only from a public policy perspective, but also in terms of its potential function of expanding the Authority’s data pool in the future.
IV. Competition at the Market Entry Stage
The Preliminary Report states that, while the licensing and reimbursement regulations applicable to the pharmaceutical sector serve legitimate objectives, in certain circumstances they may be used strategically to hinder competitors’ entry into the market or their activities in the market.
In the context of the pharmaceutical sector, the Preliminary Report expressly reaffirms a well-established principle of general competition law practice: formal compliance with sector-specific regulations, including licensing, pricing, and reimbursement mechanisms, does not, in itself, mean compliance with competition law; these two areas of compliance are assessed independently from one another. Indeed, as specifically emphasized in the Preliminary Report, the fact that conduct forming part of a strategy aimed at preventing competitors from entering or expanding in the market may appear to comply with sector-specific regulations will not preclude such conduct from being separately reviewed under the competition rules.
This finding demonstrates that even strategic conduct that appears to comply with applicable regulations may be scrutinized under the competition rules where it serves to exclude competitors or restrict competition. Accordingly, it is of significant importance for pharmaceutical companies to assess their strategic choices regarding licensing, pricing, and reimbursement processes not only from the perspective of sector-specific legislation, but also concurrently from a competition law perspective.
In this context, product hopping practices are addressed separately. The possibility that an originator pharmaceutical manufacturer may withdraw its existing pharmaceutical product from the market shortly before the expiration of patent protection, thereby preventing a generic pharmaceutical manufacturer from relying on that product as a reference in its own marketing authorization application, is assessed. The Authority states that the cancellation of a marketing authorization will not, in itself, be considered anticompetitive; rather, the market structure, the undertaking’s objective and other conduct, the economic and therapeutic benefits of the new product, and its effects on the conditions for generic pharmaceuticals’ market entry should be assessed together.
Product hopping strategies are among the practices examined by the Authority within the framework of its “holistic conduct” approach. The statement that a single cancellation of a marketing authorization will not, in itself, constitute an infringement should not be read as an assurance, but rather as a delineation of the scope requiring careful assessment: it is understood that the Authority will conduct a holistic assessment based on the relevant product market, the undertaking’s overall strategy, and the effects on generic competitors.
Within this framework, it is recommended that the legislation governing marketing authorization cancellation procedures be reviewed in light of product hopping strategies and, where deemed necessary, that consideration be given to a regulation allowing the relevant toxicological and pharmacological tests and clinical trial results to be used in generic pharmaceutical marketing authorization applications for a certain period even after the marketing authorization for the reference pharmaceutical product has been cancelled at the request of the marketing authorization holder.
With respect to reimbursement, it is identified that the continued presence in the reimbursement system of the lowest-priced pharmaceuticals that are not actually available on the market may prevent other pharmaceuticals from entering the fast-track reimbursement process. The Authority therefore recommends that the process for inclusion in the reimbursement list and the internal reference pricing system be reviewed by taking actual availability into account.
It is also assessed that the 1% market share threshold under the internal reference pricing system is not, by itself, sufficient to demonstrate a pharmaceutical product’s geographic distribution, continuity of supply, and availability in pharmacies or hospitals, and it is recommended that this threshold be set at a more meaningful level.
These recommendations appear to target the structure that results in a price reference that does not actually exist in the market being maintained at an unrealistically low level. Revising the dynamics of the reimbursement list and the threshold under the internal reference pricing system may have significant implications, particularly for initial market-entry pricing strategies.
The Preliminary Report specifically emphasizes that compliance with sector-specific regulations does not, in itself, mean compliance with the competition rules. Internalizing this distinction requires pharmaceutical companies to apply a competition law perspective in parallel when conducting their regulatory compliance processes.
V. Competition at the Distribution Stage
The Preliminary Report examines pharmaceutical distribution separately with respect to the retail pharmacy channel and the tender channel. It states that a limited number of large pharmaceutical warehouses hold high market shares in the retail pharmacy channel, and that economies of scale, purchasing power, logistics infrastructure, and financial capacity contribute to the persistence of this structure. Pharmacist cooperatives and regional warehouses are considered to constitute competitive counterweights to large pharmaceutical warehouses.
The Preliminary Report quantifies this concentration: among the wholesalers active in the retail pharmacy channel, the top two hold approximately two-thirds of the market by share, and the top five hold approximately 90 percent. The Preliminary Report also states that this concentration in the wholesale pharmacy market should be taken into account in requests for exemption of vertical agreements containing exclusivity between manufacturers and wholesalers.
- DMO Health Market Program
This shift in the distribution landscape is also reflected in the Authority’s own enforcement record: since 2021, the Board has issued markedly fewer exemption and negative clearance decisions in the sector, a trend the Preliminary Report attributes largely to the centralization of public pharmaceutical procurement under the Health Market Program. Because that program built the single-distributor requirement directly into the tender process, undertakings that previously sought individual exemptions for exclusivity arrangements in public tenders have had far less occasion to do so, reshaping the touchpoints between the pharmaceutical industry and the Authority.
With respect to public pharmaceutical procurement, the DMO Health Market Program and the province-based single authorized distributor model introduced within the scope of this program are examined in detail. The Authority states that, given the centralized and electronic structure of the Health Market Program, certain efficiencies previously claimed to have been achieved through the use of exclusive pharmaceutical warehouses are now largely provided by the system itself and that, therefore, the single authorized distributor requirement should be reassessed.
In this context, and noting that EU practice imposes no comparable single-
distributor requirement following the 2022 amendment to the EU Vertical Block
Exemption Regulation (VBER), it is recommended that, instead of a province-based single authorized distributor model, a shared exclusivity arrangement allowing up to five authorized distributors to be appointed per province be adopted, provided that authorized distribution rights for competing products are not concentrated in the same pharmaceutical warehouse.
The Authority also reviewed more than 50,000 procurement items relating to 175 active substances in 2022 and 2023 and found that discount rates increased in tenders with a higher number of participants; in this context, it assessed that intra-brand competition may generate consumer benefits.
- Exclusivities in the Private Hospital Channel
With respect to exclusive distribution agreements in the private hospital channel, it is assessed that, under the current circumstances, exclusivity has a limited impact on the high market shares of pharmaceutical warehouses. However, it is stated that the proliferation of such agreements or their concentration among a limited number of pharmaceutical warehouses may raise concerns under competition law.
The Authority also states that, in the exemption assessment of exclusive distribution agreements, general or hypothetical efficiency claims will not, in themselves, be sufficient; the efficiencies put forward must be supported by concrete data and elements that can be substantiated in detail.
- Public Institution Discount
The Preliminary Report identifies certain issues arising from the fact that the Public Institution Discount (“PID”) mechanism does not clearly regulate which market participant is responsible for applying the discount and at which stage it should be applied. It is stated that two different practices exist: applying the PID upfront to all products, and applying it retroactively after the pharmaceutical product has been delivered to the patient. The first method is stated to create additional costs for suppliers, while the second results in administrative burden and uncertainty for pharmacies.
It is also assessed that the retroactive application may raise concerns regarding the security of personal data and trade secrets, as well as the sharing of competitively sensitive information.
This point also warrants particular attention: the integrated data-sharing infrastructure to be established between MEDULA and the Pharmaceutical Track and Trace System for the operation of the retroactive PID process would create a systemic flow of data. Whether such infrastructure could affect the security of personal data and trade secrets, and whether it could create a risk of access to competitively sensitive information, constitutes a separate compliance consideration for the undertakings that will participate in this infrastructure.
For this reason, the Authority recommends that the PID be applied only to prescriptions reimbursed by the Social Security Institution and approved through the MEDULA system, that it be expressly regulated that the financial responsibility rests with the supplier undertaking the PID obligation, and that the verification process be carried out through the integrated data-sharing infrastructure to be established between MEDULA and the Pharmaceutical Track and Trace System.
With respect to the non-application or under-application of the PID, it is further recommended that a security account be established before the Social Security Institution and used to compensate pharmacies for losses incurred, and that sanction and incentive mechanisms be developed.
VI. Conclusion
The assessments set out in the Preliminary Report are grouped under three main headings: (i) atypical competition law infringements that may be carried out by taking advantage of regulatory frameworks such as patent, marketing authorization, and reimbursement legislation, (ii) exclusivity practices between pharmaceutical manufacturers and pharmaceutical warehouses, and (iii) regulatory improvements aimed at enhancing the competitive structure without fundamentally changing the existing legal, administrative, and financial framework.
In this context, the Authority recommends strengthening the regulations of the Turkish Medicines and Medical Devices Agency and the Social Security Institution against potential abuses, enabling intra-brand competition in the Health Market Program through shared exclusivity, and addressing the issues arising from the PID mechanism through measures such as a security account and an integrated data-sharing infrastructure.
Although the Preliminary Report is not yet final in nature, it constitutes a source that should be closely monitored, as it systematically sets out the Authority’s findings and recommendations concerning the pharmaceutical sector. If the proposed regulatory approach and potential legislative amendments are implemented, the operations and practices of market participants in the pharmaceutical supply chain, including manufacturers and suppliers, pharmaceutical warehouses, and pharmacies, may be directly affected.
It is important for undertakings operating in the sector to closely monitor these developments and assess their practical implications within the framework of their own business models.
