Turkish Medicines and Medical Devices Agency Published the Industry Report on Medical Devices
Turkish Medicines and Medical Devices Agency Published the Industry Report on Medical Devices
Publication | Update:
Apr 2024
On April 4, 2024, the Industry Report on Medical Devices, prepared by the Turkish Medicines and Medical Devices Agency ("Agency") to present the current state of the market together with recent developments in the medical device industry, was published on the Agency’s website.
The Industry Report on Medical Devices includes assessments of global developments in the medical device industry, statistical information on the Turkish market, and explanations of the current activities of the Agency.
In the chart on health expenditures in Turkey between 2012 and 2022, prepared with the data obtained by the Turkish Statistical Institute in the Industry Report on Medical Devices, it is stated that health expenditures were approximately TRY 354 billion in 2021 and that spending increased by 71.5% in 2022, exceeding TRY 606 billion. It is observed that, similar to global trends, there is a continuous increase in all indicators of health expenditures in our country. In Turkey, the largest share of medical device purchases belongs to the public sector, and most of these purchases are made by the General Directorate of Public Hospitals of Turkey.
The Industry Report on Medical Devices also includes market distribution data prepared by Fitch Solutions, which is generating insights, data, and analyses in ever-changing markets in 2022. According to the data, medical devices in the Turkish market are categorized as consumables (26%), diagnostic imaging (18%), orthotics and prosthetics (9%), patient aid products (hearing aids, respiratory devices, pacemakers, etc.) (10%), dental supplies (8%), and other devices (29%). The value of the Turkish medical device market exceeded USD 2.5 billion in 2021 and is expected to reach USD 2.6 billion by 2026. However, it is noted that the market predominantly comprises imported products, and the majority of domestically produced devices are of low to medium technology. Analysis of the data from 2017 to 2023 shows that medical device exports' growth momentum is higher than imports.
The Industry Report on Medical Devices summarizes the investment incentives to increase Turkey’s competitiveness against other countries in the medical device sector. Notably, the investment incentive system established under the "Decision on State Aids in Investments" numbered 2012/3305 was introduced to increase R&D investments. According to January 2024 data from the Ministry of Industry and Technology, TRY 4.2 million in investment incentives were granted in 2023, and 2.170 people were employed in the sector. However, it was pointed out that compared to OECD countries, R&D expenditures in our country are low, and various policies should be developed to increase this amount.
In addition to these general statements about the medical device market, the sectoral activities of the Agency have also been included. Within this scope, the legislative efforts to harmonize the medical device legislation with the European Union legislation, the publication of the Medical Devices Regulation, and the transition process of the In Vitro Diagnostic Medical Devices Regulation have been explained. Within the legislative framework, seven notified bodies have been appointed in Turkey. Regarding Product Tracking System (“UTS”) registration activities, it is stated that 478,246 medical devices, constituting 92% of the 517,944 registered products, have been certified by domestic notified bodies authorized by the Agency. It is determined that the majority of the products manufactured and certified in Turkey belong to Class IIa Device and Class IIb Device risk classes. In 2023, the Agency responded to 235 product risk class assessment applications.
Statistical data related to clinical research indicate that the number of medical device clinical trial applications, which was 185 in 2021, has shown an increasing trend to 204 in 2022 and 240 in 2023. Corresponding to the increase in the number of products registered in the UTS, the total number of products inspected as part of market surveillance and inspection activities reached 4,142 in 2023, while the number of adverse event reports rose to 2,746.
The Regulatory Calendar for Implementation attached to the Industry Report on Medical Devices includes the upcoming deadlines for obligations to be complied with by the Medical Device Regulation and other legislation in May 2024 and beyond. In parallel with the dynamics of the sector, it is possible to say that there will be intensive legislative updates and studies in the coming years. In addition to the need to update the legislation under the mandate of the Agency, sector stakeholders also expect the rules regarding the reimbursement processes at the Social Security Institution to be revised.
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This study has assimilated knowledge and insight from business and subject-matter experts, and from a broad spectrum of market initiatives. Building on this research, the objectives of this market research report is to provide actionable intelligence on opportunities alongside the market size of various segments, as well as fact-based information on key factors influencing the market- growth drivers, industry-specific challenges and other critical issues in terms of detailed analysis and impact.
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The Global Economic Model is covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes,
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We aim update our market forecast to include the latest market developments and trends.
Review of independent forecasts for the main macroeconomic variables by the following organizations provide a holistic overview of the range of alternative opinions:
As a result, the reported forecasts derive from different forecasters and may not represent the view of any one forecaster over the whole of the forecast period. These projections provide an indication of what is, in our view most likely to happen, not what it will definitely happen.
Short- and medium-term forecasts are based on a “demand-side” forecasting framework, under the assumption that supply adjusts to meet demand either directly through changes in output or through the depletion of inventories.
Long-term projections rely on a supply-side framework, in which output is determined by the availability of labour and capital equipment and the growth in productivity.
Long-term growth prospects, are impacted by factors including the workforce capabilities, the openness of the economy to trade, the legal framework, fiscal policy, the degree of government regulation.
Direct contribution to GDP
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Revenues
Our market segments reflect major categories and subcategories of the global market, followed by an analysis of statistical data covering national spending and international trade relations and patterns. Market values reflect revenues paid by the final customer / end user to vendors and service providers either directly or through distribution channels, excluding VAT. Local currencies are converted to USD using the yearly average exchange rates of local currencies to the USD for the respective year as provided by the IMF World Economic Outlook Database.
Industry Life Cycle Market Phase
Market phase is determined using factors in the Industry Life Cycle model. The adapted market phase definitions are as follows:
The Global Economic Model
The Global Economic Model brings together macroeconomic and sectoral forecasts for quantifying the key relationships.
The model is a hybrid statistical model that uses macroeconomic variables and inter-industry linkages to forecast sectoral output. The model is used to forecast not just output, but prices, wages, employment and investment. The principal variables driving the industry model are the components of final demand, which directly or indirectly determine the demand facing each industry. However, other macroeconomic assumptions — in particular exchange rates, as well as world commodity prices — also enter into the equation, as well as other industry specific factors that have been or are expected to impact.
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Elasticity measures the response of one economic variable to a change in another economic variable, whether the good or service is demanded as an input into a final product or whether it is the final product, and provides insight into the proportional impact of different economic actions and policy decisions.
Demand elasticities measure the change in the quantity demanded of a particular good or service as a result of changes to other economic variables, such as its own price, the price of competing or complementary goods and services, income levels, taxes.
Demand elasticities can be influenced by several factors. Each of these factors, along with the specific characteristics of the product, will interact to determine its overall responsiveness of demand to changes in prices and incomes.
The individual characteristics of a good or service will have an impact, but there are also a number of general factors that will typically affect the sensitivity of demand, such as the availability of substitutes, whereby the elasticity is typically higher the greater the number of available substitutes, as consumers can easily switch between different products.
The degree of necessity. Luxury products and habit forming ones, typically have a higher elasticity.
Proportion of the budget consumed by the item. Products that consume a large portion of the
consumer’s budget tend to have greater elasticity.
Elasticities tend to be greater over the long run because consumers have more time to adjust their behaviour.
Finally, if the product or service is an input into a final product then the price elasticity will depend on the price elasticity of the final product, its cost share in the production costs, and the availability of substitutes for that good or service.
Prices
Prices are also forecast using an input-output framework. Input costs have two components; labour costs are driven by wages, while intermediate costs are computed as an input-output weighted aggregate of input sectors’ prices. Employment is a function of output and real sectoral wages, that are forecast as a function of whole economy growth in wages. Investment is forecast as a function of output and aggregate level business investment.