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BMI's outlook for pharmaceutical companies operating in the Emerging Europe region has improved further over the past quarter, as shown by our updated Pharmaceuticals and Healthcare Business Environment Ratings (BERs) matrix. However, while Turkey's compound quarterly score has improved somewhat, its regional ranking has actually worsened to sixth (from fourth), overtaken by Russia and Hungary. Globally, Turkey remains 26th of the 83 pharmaceutical markets surveyed by BMI. While a number of major multinationals have indicated that Turkey is of major interest to them as a key emerging market, the recent pricing and reimbursement reforms will continue to weigh on the growth of market values, as will shortcomings in its intellectual property (IP) environment. In fact, during the most recent European Union (EU)-Turkey Association Council's meeting, the EU backed Turkey's constitutional amendments, a small step on the long road to accession. However, despite some positive moves, the EU stated concerns over many aspects of Turkey's business environment, including the pharmaceutical industry. The EU called for Turkey to establish legal certainty on regulatory data exclusivity, a theme also raised by the Pharmaceutical Research and Manufacturers of America (PhRMA)'s Special 301 report for 2010, which placed Turkey on the Priority Watch List. The EU has also requested that Turkey suspend new requirements on Good Manufacturing Practices (GMP), as they impose a 'de-facto ban' on imports of certain products, instead suggesting that Turkey develop its capacity in-line with international harmonisation initiatives for GMP. Turkey's pharmaceutical market was valued at TRY16.8bn (US$10.83bn) in 2009, making it the 14th largest market globally. Despite a blip in growth expected in 2010, through to 2014, we forecast a compound annual growth rate (CAGR) of % in local currency (and of % in US dollar terms), with the market reaching TRY24.25bn (US$20.38bn) at consumer prices. While the development of the generics segment will be stimulated by cost-containment pressures, international standards and IP protection requirements should also work in favour of patented drugs, which are expected to largely retain their share of the total market by value at the same level as in 2009. In the meantime, the economic rebound expected for Turkey should also stimulate the development of the pharmaceutical market ' in both volume and value terms ' once the effects of the 2009 pricing and reimbursement changes are fully digested. We stand by our view that Turkey is among the best positioned emerging markets over the long run. Turkey's domestically-oriented economic structure, diversified industrial sectors, healthy local capital market, pro-reform government and greater leverage potential all suggest that the economy is set to outperform its core emerging European peers, which are some of the other factors providing a solid base for investment in the country's pharmaceutical market.