Salah Mostafa and Yevgen Bobyk of Takeda
Pharmaceuticals outline the investment landscape in the
country’s healthcare sector
Turkey's healthcare sector is reforming itself. In March
2015, at a total cost of around €1.2 billion ($1.36
billion) the Turkish Ministry of Health (MOH) launched the
Bilkent PPP in Ankara. Covering over 1.2 million square metres,
the Bilkent campus is the largest greenfield healthcare scheme
in history. It's the third healthcare financing in Turkey to
reach financial close following Adana and Mersin.
The projects are all part of a drive by the government to
transform the country's means of providing healthcare to its
citizens. Such reforms are likely to impact Turkey's
pharmaceutical industry, so IFLR spoke to Salah Mostafa and
Yevgen Bobyk of Takeda Pharmaceuticals about the situation in
What are the most important aspects of Turkey's healthcare
and pharma regulations?
The country has a fairly advanced healthcare and pharma
regulatory framework compared to its peers in the Middle East.
This is mainly driven by Turkey's attempts to align its
institutions and legislation with the EU and has its origins in
the MOH's Health Transformation Project that was launched in
There are a number of laws worth highlighting: the R&D
Law provides tax incentives for companies setting up R&D
centres. There is also the legislation that allows for the
establishment of private cord blood banks in Turkey.
"Investors will need to invest substantially in
understanding how their local partners conduct
However, despite the potential, there are a number of
challenging regulations that international pharmaceutical
companies need to be aware of. Notably, the approval process
for the marketing of new drugs is problematic in Turkey.
Although the regulations stipulate that the Ministry of Health
(MOH) should register a new product within 210 days, the
process takes substantially longer in practice mainly due to
the MOH requirement that its own personnel has to conduct a GMP
audit of manufacturing sites.
Pharma pricing is also a big concern. Even though Law 1262,
on Pharmaceutical and Medical Preparations, states that the MOH
is empowered to confirm and approve the price of the drugs, the
MOH has construed the law to also extend to fixing prices.
The reference price system is becoming irrelevant given that
the periodic euro value used in the calculation of referenced
drug prices is determined by the Price Evaluation Commission
(PEC) which has the discretion to maintain or change the
foreign exchange rate and it was fixed at the 2009 levels until
last year. This was recently challenged in Turkish courts and
the matter is under review by the MOH.
What are the most pressing corporate regulatory
developments that affect investors looking into Turkey?
Turkey generally has a strong FDI regulatory framework. The
issue now is more geo-political in nature.
How has the Foreign Corrupt Practices Act (FCPA) been
deployed in Turkey?
Turkey is a signatory to the Convention on Combating Bribery
of Foreign Public Officials in International Business
Transactions. The Convention allows signatory states to
introduce into local laws a legally binding framework to
criminalise bribery of foreign public officials in
international business transactions. Turkey amended Article 252
of its Criminal Law to allow for the extraterritorial
application of certain foreign laws such as the FCPA.
Are there other anti-corruption points to be wary of in the
The legal framework in Turkey is robust when it comes to
anti-corruption. More on the practical side, when dealing with
local businesses, international investors will need to invest
substantially in understanding how their local partners conduct
business and putting in place robust compliance programs.
How has Turkey's competition law developed over the past 18
months following the moves to bring the country's regime more
in line with streamlined EU standards?
The Draft Law concerning Amendments to the Law on Protection
of Competition was included in the proposals list pending
before the Turkish Grand National Assembly by the beginning of
last year. The most significant matters that the Draft Law and
the amendments to the secondary legislation aim to introduce
(especially in terms of aligning local legislation with the EU
legislation) can be summarised as the de minimis rule
which allows the Competition Board to disregard competition
infringements that are below a certain value in order to better
allocate the Board's resources to more significant
In addition, the removal of negative clearance mechanism is
crucial. It may not be welcomed by those practicing competition
law and the relevant undertakings, but it is still in line with
the EU practice. Lastly, the Draft Regulation on Administrative
Monetary Fines brings calculation of the base administrative
fine fully in line with the calculation method in the EU
legislation and introduces serious amendments to the
calculation of monetary fines.
However, considering that the Draft Amendment Law and the
Draft Regulation on Fines are still pending before the Turkish
Grand National Assembly haven't been enacted, it is worth
noting that the efforts to align Turkish primary and secondary
legislation on competition with the EU legislation have not
paid off yet.
How would any future entry of Turkey into the EU affect
general counsel role at major corporates such as yours?
This will probably change the dynamics of how we provide
legal support in Turkey and – following a transition
phase – we will look into bringing in other EU
counsels to support our work in Turkey. This is looking quite
unlikely now though.
Could you explain how the Government Action Plan 2016 will
affect the pharmaceutical industry?
Under the plan, the Turkish Government has established a
number of localisation goals to promote the establishment of a
local and innovative pharmaceutical industry.
In this respect, the relevant local administrative bodies
are likely to enter into special reimbursement arrangements,
off-set agreements. In the near future in order to provide
certain incentives to the pharmaceutical companies who
undertake to localise production of their relevant products (by
way of technology transfer, employment of local technical
On the other side, although the action plan also includes
delisting of import products from reimbursement list as an
action point, the Turkish Government has not yet taken any
steps to this end and has also recently issued an announcement
to reassure the industry that the current steps taken do not
aim to delist any products from the reimbursement list and are
only intended to localise production of pharmaceuticals to the
extent possible in order to minimise trade deficit in the
Director, head of legal NEMEA
Salah Mostafa is a dual-qualified lawyer in Egypt
and in England & Wales with a broad experience in
corporate commercial work. During his career, he has
worked and lived in Cairo, Oman, Dubai, London and
Jeddah both in-house (PepsiCo & Takeda) and in
private practice (Trowers & Hamlins, Simmons &
Simmons and King & Spalding).
Mostafa has advised and worked closely with
international clients in the Pharmaceuticals, telecoms
and investment banking sectors on a broad range of
matters spanning from M&A transactions, commercial
work, regulatory matters, general advisory work and
corporate governance. He is currently the head of legal
of Takeda's Near East Middle East & Africa Region
and supported Takeda in an acquisition in Turkey in
Head of legal, Ukraine, Turkey &
T: +38 (0)44-390-0909 3524
Yevgen Bobyk joined Takeda Ukraine as head of legal,
also responsible for legal support of Takeda companies
in Turkey and Moldova.
Before joining Takeda Bobyk worked with AstraZeneca
in Ukraine for over three years as senior legal
counsel, also covering company's activities in Belarus,
Georgia and Kazakhstan.
He also has experience working for various law
firms, both local and international. He holds a
master's degree in European business law from Lund
University, Sweden and master's degree in International
Law from the National Law Academy of Ukraine,