The AKP between populism and neoliberalism: lessons from pharmaceutical policy

Abstract

In September 2009, Turkey experienced a major reform of its pharmaceutical expenditure and price policy. By introducing a global budget, Turkey saved some 20 billion TL in public pharmaceutical expenditure in the 2010-2012 period. The lion's share of this was achieved by introducing stricter price controls that reduced the profit margins of pharmaceutical producers and distributors (the populist policy solution), rather than by privatizing the cost of medicines through, for example, raising out-of-pocket payments (the neoliberal policy solution). This is a puzzle, given the Justice and Development Party (Adalet ve Kalkinma Partisi, AKP) government's usual preference for lenient and business-friendly regulation. This article explains the policy reform with reference to (i) the pronounced electoral interests of the AKP's political leadership in not substantially reducing access to public health services, (ii) the absence of powerful business interests in high medicine prices, and (iii) the absence of a developmentalist commitment to an industrial policy strategy for the pharmaceutical sector. This case study holds important lessons for scholars of Turkish politics. It suggests that externally the AKP's economic and social policies are driven by the interests of its two major constituencies (namely, lower-class voters and "Anatolian capital"), while internally they are shaped by two camps of policy makers (namely, neoliberal-minded technocrats and election-focused party leaders).