US cautions Turkey on failure to pay healthcare debts

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US pharmaceutical companies would consider exiting the Turkish market unless Turkey’s government hospitals fully pay the outstanding debt owed the manufacturers, the US ambassador to Turkey said on Wednesday.

According to the report of Financial Times, speaking at an online trade conference hosted by the US-Turkey Business Council, Ambassador David Satterfield said the non-payment of debts owed to pharmaceutical and medical equipment companies from the US and elsewhere had become a “significant issue” in trade relations between the two countries.

“Companies will consider departing the Turkish market or will reduce exposure to the Turkish market. This is not a direction which serves the interests of Turkey, its businesspersons or its citizens, and it needs to be addressed and addressed promptly,” Satterfield was quoted by Financial Times as saying at the event.

The ambassador added that the debts owed to US companies by Turkish state hospitals had now snowballed to $2.3 billion, while totaling only $230 million last year.

Contrary to payment assurances given last year by Turkish President Recep Tayyip Erdoğan and his son-in-law, Finance Minister Berat Albayrak, to US Commerce Secretary Wilbur Ross, Turkey’s ruling Justice and Development Party (AKP) was now asking US companies to accept a significant reduction in the outstanding debt, Satterfield claimed.

The US ambassador warned there would be consequences for non-payment of the amount owing or a reduction in payments.

According to reports Turkish pharmaceutical and medical equipment companies have also been struggling to collect around 19 billion Turkish lira (around $2.5 billion) in debts owed them by Turkish state hospitals.

Erkin Delikanlı, vice president of the Federation of Medical Device Manufacturers and Suppliers (TÜMDEF), announced that the sector had not received any payment from state hospitals for 16 months and from university hospitals for 36 months.

Delikanlı claimed that the Turkish government was asking local companies to accept a 30 percent reduction in the amount owed.

“With this [reduction], the industry [pharmaceutical and medical equipment sector] would be destroyed. Patients will not even be able to get a cast [if this happens],” he said.

Delikanlı wrote a letter to Turkish Health Minister Fahrettin Koca, sending a symbolic key to the sector in protest.

According to some critics, the debt accumulation is the result of the privatization of Turkey’s healthcare system.

Gönül Erden, co-chair of Workers Union for Health and Social Services (SES), told the Gazete Duvar news website earlier in September that the country’s healthcare services should be provided totally by the state and free of charge in order to prevent such debt crises.

The AKP government has recently drawn criticism for its building of giant hospitals in city centers across the country. The move has been a huge financial burden on the Turkish state as the hospitals have been constructed under a public-private partnership.

The late payment of debt has become more of an issue since 2018, when a currency crisis tipped the economy into another recession that wiped out almost 30 per cent of the value of the lira.

Besides economic policies run by the government, Turkish officials have also been criticized for their remarks on critics who express negative thoughts about Turkey’s economy. Speaking to the press in Ordu in November of last year, Turkey’s finance minister equated such critics with terrorists.

“People with titles like ‘economist’ and ‘professor’ who try to harm this country by painting a gloomy picture [of Turkey’s current economy] and scare people are no different than members of the groups that engage in terrorist activities,” Erdoğan’s son-in-law had said at the time.

Source: SCF

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