EU wins WTO case against Turkey's “discriminatory practices” regarding pharmaceutical products

Turkey must remove its localization and prioritization measures.

“Discriminatory practices” regarding pharmaceutical products

The European Commission (EC) issued a release announcing an appeal arbitration award by the World Trade Organization (WTO) in the case the EU brought against Turkey on pharmaceutical products.

According to the EC release, the appeal award finds that Turkey’s localization measure discriminates against foreign pharmaceutical products, as it is not a form of government procurement of pharmaceutical products, and it is not designed to achieve public health objectives nor to secure compliance with laws requiring Turkey to confirm accessible, effective and financially sustainable healthcare for its population.

  • The discriminatory practices constitute the requirement for foreign producers of pharmaceuticals to move their production to Turkey for those pharmaceuticals to be eligible for reimbursement under Turkish social security schemes. As such, it is incompatible with Turkey's WTO commitments.  
  • The panel also found that Turkey cannot prioritise reimbursement reviews and marketing applications of domestic pharmaceuticals over foreign ones. 

The ruling is the first WTO appeal arbitration award under Article 25 of the WTO dispute settlement understanding (DSU) and the first WTO appeal ruling in more than two years

Next steps

Turkey must remove its localization and prioritization measures either immediately or within a period of time negotiated with the EU or fixed by a WTO arbitrator.
 

For more information, contact a professional with KPMG’s Trade & Customs services:

Doug Zuvich
Partner and Global Practice Leader
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
E: labad@kpmg.com

Irina Vaysfeld
Principal
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
E: aahanchian@kpmg.com

Christopher Young
Principal
E: christopheryoung@kpmg.com

Gisele Belotto
Principal
E: gbelotto@kpmg.com

George Zaharatos
Principal
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
E: adoornaert@kpmg.com

Jessica Libby
Principal
E: jlibby@kpmg.com

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