When viewing the global economic changes in the last few years, one of the most prominent trends observed are the changing healthcare systems in emerging economies. These emerging and ever changing healthcare markets have, for some time now, been one of TforG’s main areas of focus and continuous subject of study.
In one of our latest research projects, we analyzed the Turkish healthcare tendering process in more detail, with the end goal of gaining a better understanding of this country’s commercial processes and dynamics.
A typical hospital tender in Turkey can last anywhere from 30 to 45 days. Complete finalization of the process can sometimes take up to 5 months. In some cases the tender can be delayed even longer, e.g. if a physician were to reject the product based on clinical grounds.
When looking at pricing, purchasers tend to look at various sources to help “benchmark” the amount they are willing to pay. Some sources typically used to come up with a “price range” include previous negotiation results (i.e. history with competitors) and the prices paid by other similar institutions.
During a typical tendering process, the approximate price range has to be determined upfront. In order to even be considered a valid candidate for participation, products must (in most cases) fall into an already pre-established price range.
Once the price range has been determined, the next step is for the tender to be made public, usually by announcing it on an online source e.g. www.saglikbank.com.
Once a final list of candidates has been determined, it is normally the role of a hospital commission to decide which company will win the tender. In most cases these commissions are made up of a combination of both clinical and finance profiles such as physicians/end users, department’s heads, procurement supervisors and pharmacy heads of department.
Generally, tender winners are required to fulfill a list of specific qualifications and “falling into the pre-determined” price range weighs heavily on the final decision. Some countries such as China, Brazil and Turkey favor their local industry and put pressure on international providers to offer low cost products or operate through local R&D, manufacturing or partnerships.
The process of setting up the specifications for different medical devices and equipment is getting more and more complex. As a result physicians need to be well informed about the products and well aware of new technologies. In this regard, published clinical trials and studies still play a critical role.
Despite the obvious economic complications, several emerging countries, Turkey being a prime example; show high growth markets supported by stable economic growth models and long term growth policies imposed by the government. These markets are characterized by reduced margins and a tougher competitive context as illustrated by their healthcare tendering processes.