ELECTRO MEDICALS MARKET IN TURKEY

Contents

2

Healthcare Industry Overview - 3

Healthcare System - 5

Medical Devices Market - 8

Demand for Electro Medical Products in Turkey - 10

Major Sources of Demand - 12

Supply of Electro Medicals - 14

Major Suppliers and Position of Italy - 17

Opportunities in The Market - 21

Distribution Channels and Procurement - 22

Regulatory Framework - 24

Customs Duties - 26

Major Stakeholders in The Industry - 27

Healthcare Industry Overview

3

Increasingincomes,changingdemographicsandwidespreadaccesstohealthcareservicesaretheenginesofgrowthintheTurkishhealthcaresystem.Thehealthcareindustryhasbeenexpandingandisexpectedtocon<nueitsexpansionduetothebelowindicators:

Increasing Population

Ageing Population

Higher incidence of chronic diseases

Wider health insurance coverage

Increasing economic welfare

Changing Disease Profile

The growing popula<on and ageing demographicscontribute to the need to upgrade healthcareinfrastructureandincreasespending.

Investment Support and Promotion Agency of Turkey 23

The growing population and ageing demographics contribute to the need to upgrade healthcare infrastructure and increase spending

Figure 22: Population Dynamics in Turkey

Source: TurkStat, Deloitte Analysis

f: forecast, Note: There may exist differences due to rounding.

6% 7% 8% 8% 10% 21%

28%

60% 63% 66% 68% 69%

63% 58%

34% 30% 26% 25% 21% 16% 15%

0%

20%

40%

60%

80%

100%

1990 2000 2010 2013f 2023f 2050f 2075f

0-14

15-64

65+

70,6 75,6 84,2

93,5

0

20

40

60

80

100

2007 2012 2023* 2050*Source: TurkStat, Deloitte Analysis

* Forecast, Note: There may exist differences due to rounding.

Figure 21: Population of Turkey, (million people)

• The Turkish population is expected to grow at a

CAGR of 4.3% between 2012 and 2050 to an

estimated 93.5 million in 2050.

• Even though Turkey will continue to have one of

the youngest populations in Europe, its median age

will reach 34 in 2023, 42.9 in 2050 and 47.4 in

2075. Therefore, more than half of the population

will be over 47 years of age by 2075.

• The percentage of the population over the age of

65 is also on a rise as it will reach 10% of the total

population in 2023 and 28% in 2075.

• There is a positive correlation between age and the

possibility of suffering from chronic disease

requiring lifelong care which would also incur higher

medical costs. An ageing population coupled with

continued population growth would result in

increases in Turkey’s healthcare spending.

Investment Tip: An ageing population would result in an increased need for

skilled nursing facilities and certain other public buildings, such as schools. These would be designed with a view toward conversion into healthcare facilities in

the future.

CAGR

5.8%

Source: Turkish Statistical Institute, Deloitte Analysis

AgeGroups

Healthcare Industry Overview

4

The Turkish economy rapidly expanded in the last decadewith per capitaGDP* expanding at a CAGR ofmorethan20%between2002and2015.Inlinewithincreasedeconomicwelfare,healthcarespendingpercapitagrewataCAGR*of30%inthesameperioduptoalevelofUSD800.

Investment Support and Promotion Agency of Turkey

186 235 307 374 436 545

620 567 668 701 707 734 751 796 847 912

0

2

4

6

8

10

12

14

0

150

300

450

600

750

900

1050

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f 2014f 2015f 2016f 2017f

US

D T

hou

sand

Healthcare Spending per Capita GDP per Capita

25

As economic welfare increased, Turkey’s healthcare spending grew at a CAGR of 30.6% between 2002-2012

• There is a strong correlation between economic welfare and the level of healthcare spending. As economic welfare increases, so do expectations for readily accessible and higher quality healthcare.

• The Turkish economy rapidly expanded in the last decade with per capita GDP expanding at a CAGR of 25.1% between 2002 and 2012 from USD 3,439 in 2002 to USD 10,550 in 2012. In line with increased economic welfare, healthcare spending per capita grew at a CAGR of 30.6% between 2002-2012 from USD 186 to USD 707.

Figure 25: Healthcare Spending per Capita and GDP per Capita in Turkey

• The Turkish economy is expected to continue its rapid expansion with GDP per capita reaching USD 13,303 in 2017. GDP per capita is projected to grow at a CAGR of 4.3% between 2012-2017, registering an increase of around USD 2,500.

• Healthcare spending will grow in line with improvements in economic welfare as it increases at a CAGR of 5.2% from USD 707 in 2012 to USD 912 in 2017. There is especially strong growth between 2015-2017, giving an indication that growth in healthcare spending per capita will continue to increase in the long term as well.

F: forecast Source: Economic Intelligence Unit

US

D

TotalhealthcareexpendituresinTurkeyiscurrentlymorethanUSD60Billion,whichaccountsfor7%oftheGDP.Around75%oftheexpendituresaregeneratedinPublicSector.

*CAGR: Compound Annual Growth Rate *GDP: Gross Domestic Product

Healthcare System

5

Turkeyhasa2-levelapproachtothedeliveryofpublichealthcareservices.First-leveltreatmentisdeliveredbyfamilyprac<<onerswhoareappointedtopopula<ongroupsof3,000peoplelivinginthesamearea.Forillnessesrequiringfurthertreatment,pa<entsarereferredbyfamilyprac<<onerstosecond-leveltreatmentfacili<es,whichare‘state’and‘university’hospitals.

TheMinistryofHealth(MoH)buildsandoperatesthe‘statehospitals’whichcons<tute59%ofthecurrenthospitalstockand62%ofcurrenthospitalbedcapacityinTurkey.

Ministry of Health,

874

University, 69

Private, 550

Ministry of Health, 123,703

University, 36,616

Private, 39,782

NumberofHospitals-2014 NumberofBeds-2014

Source: Ministry of Health (MoH)

Healthcare System

6

ThemajorityofprivatehospitalsarelocatedinwesternTurkey,withIstanbul(30%),Ankara(6%),Antalya(5%) and Izmir (4%) leading theway. The concentra<onofprivatehospitals ispropor<onal topopula<ondensity;Istanbul,Turkey’slargestcity,hasthehighestnumberofprivatehospitalsatmorethan150.

Inaddi<on,currently37%ofallhospitalsinTurkeyareprivate,asopposedto59%opera<ngundertheMoH(Ministry ofHealth)mandate. This also indicates the fairly highmarket penetra<onof private healthcareins<tu<onsinTurkey.

Investment Support and Promotion Agency of Turkey 34

Private hospitals in Turkey are concentrated in the western region, with the highest concentration in Istanbul

• The majority of private hospitals are located in western Turkey, with Istanbul (30%), Ankara (6%), Antalya (5%) and Izmir (4%) leading the way. The concentration of private hospitals is proportional to population density; Istanbul, Turkey’s largest city, has the highest number of private hospitals at 152.

• Other cities with high populations also have a high number of private hospitals. Ankara, the second largest city in Turkey after Istanbul, has 29 private hospitals, whereas Antalya and Izmir house 26 and 20 private hospitals respectively.

• Yet, the market penetration for private healthcare institutions is significant all over Turkey. There is at least 1 private hospital in every province, with 17 provinces having more than 10 private hospitals.

• In addition, as of 2012, 37% of all hospitals in Turkey are private, as opposed to 56% operating under the MoH mandate. This, yet again, demonstrates the fairly high market penetration of private healthcare institutions in Turkey.

Figure 33: Regional Distribution of Private Hospitals in Turkey, 2012

Source: TurkStat

37%

56%

4% 3%

Private

MoH

University

Other

Figure 34: Percentage of Private Hospitals in Turkey, 2012

Source: MoH

Source: Turkish Statistical Institute

NumberofHospitals

Healthcare System

7

Thelargestcapacityaddi<onsweretointensivecareunit(ICU)andqualifiedbeds.ThenumberofintensivecarebedsincreasedbytheremarkableCAGRof55%inthelast13years,demonstra<ngthatinvestmentsininfrastructurewerenotonlyfocusedonincreasingquan<ty,butweresignificantlyaimedat increasingthequalityofthehealthcareinfrastructure.

3,426 16,020 23,689 28,235

164,471 183,200

200,072 200,101

2002 2009 2012 2014

ICU Beds Total Beds

There is an emerging groupof hospitals thatwill be built andmanagedby the Public-Private-Partnership(PPP)model.TheMoH,whichhadbeenthesolebuilderofstatehospitals,hasrecentlybeencontrac<ngouttheconstruc<onandmanagementof29healthcarecampusesaroundTurkey.Eachcampuswillhouse2,000to4,000bedsdividedamonggeneralandspecializedhospitals,laboratories,andaccompanyingrecrea<onalareas.Whenconstruc<onofallthesecampusesisfinished,45,000bedswillhavebeenrenovated.

Source: Ministry of Health ICU: Intensive Care Unit

Medical Devices Market

8

Turkish medical devices market has been growinggraduallyandisrankedasthelargestintheregionoftheMiddle East and Africa. According to BMI Espicom, theTurkishmedicaldevicemarketcurrentlyreachedtoUSD3billion.Moreover, it is forecasted to grow at aCAGR of8.5% through 2018, buoyed by strong imports. Theexpansion of healthcare facili<es and rising healthexpenditure will be the main drivers of projected fast-pacedgrowth.

2,438 2,675 2,933 3,172

3,412 3,669

2013 2014 2015 2016 2017 2018

Medical Devices Market (USD Million)

Source: BMI Espicom Research Company

Investment Support and Promotion Agency of Turkey 55

The Turkish medical device sector is expected to expand at a CAGR of 8.5% over 2013-2018

0

5

10

15

20

25

30

35

40

45

50

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

2008 2009 2010 2011 2012 2013f 2014f 2015f 2016f 2017f 2018f

%

USD

Milli

on

Consumables Diagnostic Imaging Dental Products

Orthopaedics & Prosthetics Patinet Aids Other

USD Per Capita

2008-2012

CAGR: 2.1%

2013-2018

CAGR: 8.5%

Other items include: Wheelchairs, ophthalmic instruments, anesthesia equipment, dialysis equipment, blood pressure monitors,

endoscopy monitors and hospital furniture.

Source: BMI Espicom

• Turkey medical device market has been growing gradually and is ranked as the largest in the region of the

Middle East and Africa. According to BMI Espicom, the Turkish medical device market reached over USD 2.2

billion in 2012. Moreover, it is forecasted to grow at a CAGR of 8.5% through 2018, buoyed by strong imports.

The expansion of healthcare facilities and rising health expenditure will be the main drivers of projected fast-

paced growth.

Figure 50: Medical Device Market in Turkey, 2008-2018

Medical Devices Market

9

Consumable products have the highest share of 22% inoverallmedicaldevicesmarketwithUSD650millionmarketsize, which is followed by diagnos<c imaging devices withUSD550millionmarketsizeand20%share.

Chart below shows the forecasts for the medical devicesmarket in different product categorieswith a yearly growthof8,5%un<l2018.In2018,marketsizeofdiagnos<cimagingdevices is forecasted to increase up to USD 750 million.Along with the other related products, the overall electromedicalsmarketwillreachtoasizeofUSD1.5billion.

Consumables, 22%

Diagnostic Imaging,

20% Dental Products,

8%

Orthopedics and

Prosthetics, 15%

Patient Aids, 9%

Others, 26%

Source: BMI Espicom Research Company

Demand for Electro Medical Products in Turkey

10

AsTurkey’smedicaldeviceindustrygrows,sodoestheneedforhightechnologymedicaldevicesinparallelwiththeplannedexpansioninhealthcareinfrastructure.ThenumberofMRIandCTdevicesper1millionpopula<onis10.4and14.1,respec<vely.AlthoughTurkeyisabovemanyoftheupperincomecountries,its<lllagsbehindtheOECDaverage.Consideringtheprojectedgrowthpoten<al,itisexpectedthatTurkeywillfollowglobaltrendsandincreasethenumberofitsMRIandCTdevicestosa<sfyincreasingneed.

46.9

34.5

23.5

23.5

19.1

22.9

21.8

21.6

20.8

15.4

14.8

13.9

11.8

11.3

10.6

10.4

8.8

8.7

6.8

3 2.8

2.2

101.

3

50.5

33.3

37.1

50.5

34.8

40.5

21.8

34.6

29.3

17.1

23.7

10.9

18.6

14.3

14.1

14.6

13.5

8.7

9.2

7.7

5.1

0

20

40

60

80

100

120

MRI CT

Source: BMI Espicom Research Company

Demand for Electro Medical Products in Turkey

11

Sta<s<cofotherelectromedicaldevicesalsoindicateahugepoten<alinTurkishmarketcomparedtotheotherdevelopedcountries.Electromedicaldevicecountsofcountriespermillionpeopleareasfollows:Ø  PETDevices:Denmark:6,1–USA:5-SouthKorea:4,1–Japan:3,65–OECDAverage:1,56–Turkey:0,94-Chili:0,46–

Hungary:0,4-Mexico:0,26Ø  Radia[onTreatmentEquipment:Switzerland:16,7–Denmark:13,4–USA:12,5–Iceland:12,5–OECDAverage:5,5

–Turkey:2,4–Chili:1,9–Mexico:1,5–Israel:0,37Ø  Mammography Devices: Greece: 57,8 – South Korea: 55,7 – USA: 40,2 – OECD Average: 17,4 – Turkey: 12,5 –

Luxemburg:9,2–Mexico:9–UK:8,6–Netherland:3,9Ø  GammaCameraDevices:USA:47,2–Canada:20,6–Australia:19,9–OECDAverage:8,7–Estonia:2,3-Turkey:2,1–

Chili:1,5–Mexico:0,5

Source: Ministry of Health

562 625 678 709 750 798759 838 904 974 1,037 1,080

1,005

2,117 2,283 2,4363,775 4,282 4,756

681

1,0951,251 1,397

2,0912,480

2,793

259

689791

881

1,181

1,379

1,542

2002 2008 2009 2010 2011 2012 2013

MRI CT Ultrasound DopplerUltrasound Echo

Major Sources of Demand

12

Asmen<oned in the previous sec<ons, public ins<tu<ons governed byMinistry ofHealth dominate theTurkish healthcare market with the shares of 59% of the current hospital stock and 62% of currenthospitalbedcapacity.However,everincreasingpenetra<onofprivateins<tu<onsinthemarkethasalsoreachedtoremarkablelevels.

7,351 8,239 9,581 10,321 10,953 11,874

3,486 3,7263,890 4,236 4,917 5,129

2,204

5,1836,344

7,5069,132

10,09411,232

2002 2009 2010 2011 2012 2013 2014

MinistryofHealth University PrivateICUBedCounts

Althoughthepublicins<tu<onshavetheleadintotalnumberofbedswith%62share,correla<onofthisindicatorwiththeelectromedicaldeviceuseisweak.ComparingtheICUbedcountsismoremeaningfultoassesstheelectromedicaldeviceuseinpublicandprivateins<tu<ons.Abovechartpresentsaclearerviewtothemarketpenetra<onofprivateins<tu<ons,wheretheyhavea40%shareintermsofICUBedswhilepublicins[tu[onshave42%.

Source: Ministry of Health

Major Sources of Demand

13

University hospitals are ter<ary, yet an important source for the electromedical device demandwith astable growthof facili<es and ICU/qualifiedbeds. The currentdistribu<onof selecteddevices in Turkishhealthcaresystemwillgiveabekerinsightaboutthemarketstructure.

251 436

2,648

1,459

711323

95116

502

332

221

76452

528

1,606

1,002

610

506

MRI CT Ultrasound DopplerUltrasound Echo Mammography

MoH University Private

Source: Ministry of Health

Supply of Electro Medicals: Local Production

14

Theproduc+onofmedicaldevicesislimitedinTurkeyandthemajorityoftheincreasingdemandismetbyimports. Local produc<on is expected to increase in line with themoderniza<on of healthcare system,integra<on of EU standards and the expansion of healthcare service providers. Development of localproduc<onisalsobeingsupportedbythegovernment’stargetstospurmedicaldeviceexports.

Source: Ministry of Health *PPP: Public Private Partnership

The new PPP* legisla.on adopted in 2013 requires that at least 20% of the medicalequipmentusedinPPPbuilthealthcarefacili.estobesourcedbylocalmanufacture.

The local produc[on is strong especially inconsumableproductsanddentalproductsinmedicaldevices category, which have low value-add.However, there is significantly limitedknowhowandtechnology development in electromedical devices.Therefore, the overall share of local produc<on inmedicaldevicesis15%.

85%

15%

Imports Local Production

Supply of Electro Medicals: Imports

15

OverallmedicaldeviceimportsinTurkeyreachedtoasizeofEUR2.5Billion,where theelectromedicalproductshasanapproximateshareof50%.

Consumables and orthopedic devices/prosthesishave the leading share in the total medical deviceimportsduetothewideandmassuse.

However, electro medical products such asdiagnos[cmonitoring devices and other electronicequipment used for medical, surgical and dentalpurposes are gaining significance every year andincreasingtheirshareintotalimports.

Analyzing the electro medical products imports;diagnos[c monitoring, hemodialysis and otherelectronicdeviceshaveasignificantshareof68%inoverall electro medical product imports. It isfollowed byX, Alfa, Beta andGammaRayDeviceswithashareof20%.

22%

15%

14% 12%

9%

8%

7% 4%

9%

Consumables

Orthopedic Devices

Other Medical Devices Diagnostic Monitoring Devices Other Electronic Devices Glasses and Lenses

Dental Devices

Therapeutic Devices

Others

68%

20%

12%

Diagnostic Monitoring, Hemodialysis, etc.

X-Ray, etc.

Other Electro-medicals

Source: Turkish Statistical Institute

Supply of Electro Medicals: Imports

16

Yearlyimportvolumesofelectromedicalproductsaregiveninbelowchart,indica<ngayearlygrowthof8,4%,whichisalsoinlinewiththeexpectedgrowthofthemarket.

Highest growthwas experiences in X-Ray product imports with a CAGR of 16,7%, where the yearlygrowthofdiagnos<cmonitoring,hemodialysisandotherdeviceswas5,8%inthelast3years.

748 841 835

182 189 242 121 132 150

2013 2014 2015

EUR

Mill

ion

Diagnostic Monitoring, Hemodialisis X-Ray, etc. Other Electro-medicals

Source: Turkish Statistical Institute

Major Suppliers and Position of Italy

17

USA,GermanyandChinahavetheleadingshareinelectromedicalimportsmakinguparound54%ofthetotal.ThesecountrieshavelongyearsofpresenceinTurkishMarket,ac<velysupplyingtobothpublicandprivate healthcare ins<tu<ons. Compared to thesemarket leaders, Italy has a limited share of 4% andkeepsastablegrowth.

To increasetheirmarketshare, Italiansuppliersshouldclearly focusonalterna<vesalesanddistribu<onchannelsandac<velypar<cipateinpublictenderprocesses.

USA 22%

Germany 19%

China 13%

Japan 6%

Italy 4%

Others 36%

Source: Turkish Statistical Institute

Major Suppliers and Position of Italy

18

TradeinelectromedicalproductsbetweenItalyandTurkeyshowsthatTurkeyisanetimporterandthetrade balance indicates a stable growth in favor of Italy. Below analysis of Italian imports by productspresentstheopportuni<esforItaliansupplierstotargetcategorieswithlowmarketshare.

3,672 4,619 7,004

38,710 38,548 42,500

2013 2014 2015

1.00

0 EU

R

Export Import

Source: Turkish Statistical Institute

Major Suppliers: Importers and Distributors

19

Globally renowned companies are among the major players of medical device industry of Turkey assupplier.LeadingglobalmedicaldeviceproducershavechosenTurkeyfortheirregionalheadquarters,R&Dcenter(s)and/orfortheirproduc<onfacili<es.

Investment Support and Promotion Agency of Turkey 61 61

Major Players

• Leading global medical device producers have chosen Turkey for their regional headquarters, R&D center(s) and/or for their production facilities.

• Abbott and Siemens have production and R&D centers in Turkey, whereas Bayer and Alvimedica have corporate offices. GE has moved its headquarters for the EAGM region to Istanbul. Siemens opened a new production plant worth USD 76 Million to the Gebze Industrial Zone. Baxter has formed a partnership with Eczacıbaşı.

• Globally renowned companies are among the major players of medical device industry of Turkey as supplier.

• Some of these companies include Johnson & Johnson, Boston Scientific, CareFusion, Becton Dickinson & Company, Covidien, 3M, Philips and Olympus.

Investment Tip: Construction of new, city hospital complexes provide significant

opportunities for medical device companies that are being commissioned to equip the

facilities.

Investment Support and Promotion Agency of Turkey 61 61

Major Players

• Leading global medical device producers have chosen Turkey for their regional headquarters, R&D center(s) and/or for their production facilities.

• Abbott and Siemens have production and R&D centers in Turkey, whereas Bayer and Alvimedica have corporate offices. GE has moved its headquarters for the EAGM region to Istanbul. Siemens opened a new production plant worth USD 76 Million to the Gebze Industrial Zone. Baxter has formed a partnership with Eczacıbaşı.

• Globally renowned companies are among the major players of medical device industry of Turkey as supplier.

• Some of these companies include Johnson & Johnson, Boston Scientific, CareFusion, Becton Dickinson & Company, Covidien, 3M, Philips and Olympus.

Investment Tip: Construction of new, city hospital complexes provide significant

opportunities for medical device companies that are being commissioned to equip the

facilities.

Abbo_ and Siemenshave produc<on and R&D centers in Turkey,whereasBayer and Alvimedicahavecorporateoffices.GEhasmoveditsheadquartersfortheEAGMregiontoIstanbul.Siemensopenedanewproduc<onplantworthUSD76MillionintheGebzeIndustrialZone.BaxterhasformedapartnershipwithEczacıbaşı.

Major Suppliers: Importers and Distributors

20

Company Country DetailsBostonScien[fic USA Thecompanydoesnotmanufacturedevicesinthecountrybuthasarepresenta<veofficeinIstanbul.

Covidien IrelandThecompanyhasarepresenta<veoffice,CovidienSaglikA.S.İnIstanbul,butthereisnomanufacturingac<vity.Productsareimported.CovidienrecentlyestablishedaninovasioncenterinIstanbulwithaninvestmentofUSD21million.

Fresenius GermanyFreseniusMedikalHizmetlermanufacturesconcentratesforhaemodialysis.TheheadofficeisbasedinIstanbul.ThereareothersalesofficeslocatedinAnkara,IzmirandAdana.RevenuesamountedtoUSD75.5millionin2012.Freseniusoperates53dialysiscentresacrossTurkey,whichhavereceivedinvestmentofmorethanEUR125million.

GeneralElectric USASince2008,thecompanyhashadaninterna<onalofficeinIstanbulcoveringtheEAGMmarket(CentralAsia,MidddleEast,Africa,RussiaandCommonwealthofindependentstates,orCIS).InJune2009,thecompanyannouncedplanstoinvestinanewmedicalproduc<onplantinAnkara.Nofiguresorfurtherdetailsoftheinvestmentwereannounced.Thecompanymen<onedthattheproduc<onwillbegearedmainlyforexports.

Johnson&Johnson USA Thecompanyhasarepresenta<veoffice,Johnson&JohnsonProfessional,inIstanbul.Thereisnoknownmedical

deviceproduc<oninTurkey.

Medtronic USA-Ireland Thecompanyhasnomanufacturingplantorrepresenta<veofficeinthecountry;productsareimported.In2015,thecompanyacquiredCovidienandmoveditsheadquarterstoIreland.

Philips USA PhilipsHealthcareTurkiye(MedikalSistemler)isthemainrepresenta<veofficelocatedinIstanbul.Thereisnolocalmanufacturing,productsareimported.

Siemens Germany

SiemenshasastrongpresenceinTurkey.TheheadofficeisbasedinIstanbul,whichisalsotheloca<onfortwomanufacturingfacili<es,butthesedonotproducemedicaldevices.ThecompanyhasfourregionalofficesinBursa,Izmir,AnkaraandAdanaaswellassub-officesinMalatya,Trabzon,Kayseri,Gaziantep,Kocaeli,Konya,EskişehirandAntalya.In2012,SiemenssignedadealwithAcibademHospitalinAnkaratoprovidestate-of-the-artmedicalequipmentworthEUR9million,aspartofthehospital'srenova<onproject.SiemensalsocompletedprojectsforMoH,deliveringaCTpackageworthEUR5.4milllionandanagiography/X-raypackageworthEUR8.4million.Inaddi<on,akeyprojectwassignedwiththeAmericanHospitalinIstanbultoprovideaSOMATOMDefini<onCTDualSource.TheprojectisvaluedatEUR2.1million.

Smith&Nephew UK Thecompanyhanomanufacturingplantorrepresenta<veofficeinthecountry;productsareimported.

Stryker USA Thecompanyhanomanufacturingplantorrepresenta<veofficeinthecountry;productsareimported.

Opportunities in The Market

21

Thereareabout6,000companiesopera<ngintheTurkishmedicalequipmentanddevicesmarket.Thereare about 100 medical equipment manufacturers in the country, most of which are manufacturingdisposables, surgical tools, stents, prosthe<cs and hospital furniture. In general, all major categories ofmedical devices are present in the market both in private and public hospitals. At this point, theseins<tu<ons lookforstate-of-the-artand innova[ve,wherepossible,minimally invasiveornon-invasive,medicalequipmentandsolu<ons.Thereispoten<alforthefollowingmedicalequipment:

Advancedpre-screening,imaginganddiagnos[csdevices

Advancedpoint-of-caredevices

Advancedsurgicaldevicesusingrobo[cstechnology

Cancertreatmentdevices

Clinicalchemistryandlaboratorydevicesandreagents

E-healthandM-healthsystems

Implantsusedinorthopedicsandtrauma

Remotepa[entmonitoringdevices

Telemedicinesystems

Distribution Channels and Procurement Methods

22

Foreign Brand

Local Brand Rep. Office Importer/Distributor

Tender Process Direct Procurement

MoH Military Hospitals Private Sector

Primary/Secondary

Healthcare Units

University Hospitals

Distribution Channels and Procurement Methods

23

Significantweightofthepublicsectorinhealthcareindustryarisesdifferentsalesanddistribu<onschemescomparedtotheotherindustries,wheretheprivatesectordominates.

Majorcustomersofelectromedicalscanbegroupedas;Primary/SecondaryLevelHealthcareUnitsunderMoHmanagement,MoH (massprocurements),UniversityHospitals,MilitaryHospitals (underMinistryofDefensemanagement)andPrivateSector.

Ø  Medicalequipmentanddevicesarepurchasedbyfamilyphysiciansworkinginprimarycareunits.Theequipmentordevicesarepurchasedthroughacompe[[vetenderingprocessorareleasedfromtheprivatesector.

Ø  Medical devices and equipment for secondary and ter[ary levels of careare purchased or leasedthroughapubliccompe<<vetenderingprocess.

Ø  As theMoHprocures a large number ofmedical devices and services for its facili<es, theMedicalDeviceServiceProcurementTendersModulehasbeenestablished fordetailedmonitoring. In2015,MoH signed a protocol with YOK (Council of Higher Educa<on) and started to supply UniversityHospitalsfortheirmedicalsupplyneeds.

Ø  MilitaryHospitalsalsopurchasemedicaldevicesthroughacompe[[vetenderingprocess,which isfundedbyMinistryofDefense.

Ø  PrivateHospitalsgenerallymakespurchasesthroughdirectprocurementmethod.

Regulatory Framework

24

AsamemberoftheEUCustomsUnion,TurkeyhasadoptedtheMedicalDevicesDirec[ve,theAc[veImplantableMedicalDevicesDirec[veandtheInVitroDiagnos[csDirec[vesoftheEU.Therefore,allproductsthataredeemedtofallundertheEUdirec<veswouldneedtoconformtothedirec<vesinordertobemanufacturedormarketedinTurkey.

Thus,TurkeyrecognizesEuropeanCEmarkingformedicaldevices.CEmarkingforallmedicaldevicesrequirestechnicaldocumenta<on,riskanalysis,proofofcompliancewiththeessen<alrequirementsofthedirec<ves,andaproductrelateddeclara<onofconformityissuedbythemanufacturer.

TheTurkishStandardsIns<tuteassessesandinspectsCEconformitybothforlocallyproducedproductsandimportedproducts.

TheDrugandDeviceIns[tute,whichisapartoftheMinistryofHealthinTurkeyisresponsibleforcer<fyingthatadevicemanufacturerhastakenstepstoensurecompliancewiththeregula[ons.

Allmedicaldevicesneedtoberegisteredinthena[onaldatabase(TITUBB)maintainedbytheDrugandDeviceIns<tute.

Publicprocurementlawsregulatethemajorityofservicesthatofferdiagnosisandcuresaswellasthepurchaseofdrugsandmedicalsupplies.ThePublicProcurementAuthorityoverseestheseac<vi<estoinsuretheyfollowtheregula<ons.

Regulatory Framework

25

• Medical Device Regulation (93/42/EEC) • Active Implantable Medical Device Regulation (90/385/EEC) • In Vitro Medical Diagnosis Devices Regulation (98/79/EC)

Medical Devices in the scope of;

• Declaration of Conformity • EC certification: given by a Notified Body authorized by EU

(exceptions: class I-other for MDR, IVD-other for IVMDDR). • Turkish translations of above documents. • Only a notification/online registration is required to Turkish Medicines

and Medical Devices National Databank to sell a medical device in Turkey.

• Manufacturers should place the medical devices in the market under their own name. If located abroad, should designate an Authorized Representative/distributor in Turkey.

Should hold a CE sign and should have;

Customs Duties

26

Customsdutyis0%fortheimportedelectromedicalproductsfromEUcountriesandtheVATrateis8%forthemajorityoftheproducts.Excep<onswith18%VATratearelistedbelowontheright.

Productswith18%VAT9019.10.10.00.159019.10.90.00.259019.20.00.00.259020.00.00.00.159020.00.00.00.189022.19.00.00.009022.29.00.00.009022.30.00.00.009022.90.00.10.009022.90.00.90.119022.90.00.90.129022.90.00.90.199402.10.00.00.199402.10.00.00.219402.90.00.00.21

Source: Ministry of Customs and Trade

CustomsCode Product CustomsDuty(EU) VAT

84.19.20 Medical,SurgicalorLaboratorySterilizers 0% 8%

9012 Microscopes,diffractapparatus,parts 0% 18%

9018Diagnos<c,surgical,dentalequipments

0% 8%

9019 Mech-ther,massage,psychtest,ozoneappequipments

0% 8%

9020 Breathingdevices,gasmasksandparts 0% 8%

9022 X,Alfa,BetaandGammaRaydevices,tubesandparts

0% 8%

9402 Medical,surgical,dentalorveterinaryfurnituresetc

0% 8%

Major Stakeholders in The Industry

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