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Introduction: Pharmaceutical Distribution Networks Are Now Fully Multinational

Biotechnology and pharmaceutical companies often use distribution agreements, also known as distribution contracts , to distribute their products to different countries . These agreements regulate many critical issues, from product storage and distribution to sales, marketing, and inventory management.

By 2025, the biggest problem in contracts between multinational pharmaceutical companies and Turkey the choice of jurisdiction and applicable law. This is because distribution activities:

• Competition law,

• Drug advertising bans,

• Pharmacovigilance obligations,

• Supply chain responsibilities,

• Product safety and recall processes

It is subject to stringent regulations, many of which are mandatory rules of Turkish law. Therefore, it requires special sensitivity in the application of the Private International Law Act.

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1. Is it possible to choose the legal partner in pharmaceutical distribution contracts?

Yes. The parties generally:

• English law,

• Swiss law,

• Delaware (US) law,

• German law

It chooses the preferred legal system in commercial disputes such as these.

However, according to Article 24 of the Private International Law Act:

Choice of law cannot override mandatory Turkish legal provisions.

In this context, the following areas are subject to Turkish law in all cases:

• Product safety

• Withdrawal decisions

• TİTCK advertising bans

• Pharmacovigilance obligations

• Non-compete clause and abuse of dominant position

• Storage and distribution standards (GDP)

• Pricing and refund policies

Therefore, even if it is stated that "English law will apply," these provisions will be absolutely applicable.

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2. Jurisdiction Clause in Distribution Agreements: Can Turkish Courts Be Bypassed?

The parties often:

• ICC Arbitration,

• London Arbitration Court (LCIA),

• Swiss Arbitration,

• German courts

It defines authority in this way.

However, Turkish courts still have jurisdiction in the following cases:

A. If there is a claim for damages arising from the product

Consumers and patients can file lawsuits directly in Turkish courts.
Jurisdiction requirements do not bind them.

B. If the distribution chain is run in Türkiye

According to Article 40 of the Private International Law Act, the lawsuit can be filed in Türkiye.

C. If there is a violation of public order

For example, violating the advertising ban in Türkiye.

D. Violations of competition law

The Competition Authority has absolute authority.

E. Cases arising from GDPR (Drug Distribution Standards) violations

Due to the activity taking place in Türkiye, Turkish courts may have jurisdiction.

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3. The Most Critical Clauses of Distribution Agreements: An Evaluation from the Perspective of Private International Law

The following topics carry the highest risk in international disputes:

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A. Exclusive Distribution

This provision poses a risk from a competition law perspective.
Since Turkish competition rules are mandatory, they cannot be circumvented through choice of law.

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B. Promotion and Marketing Restrictions

Regulations of the Turkish Medicines and Medical Devices Agency (TİTCK) are of a public order nature.
Even if a choice of foreign law is valid, it is not applicable in Turkey.

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C. Recall procedure

Product safety is a matter of public order in Turkey.
British law cannot change that.

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D. PV obligations

Although pharmacovigilance notifications are international in nature, the regulations in force in Türkiye take precedence.

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E. Pricing and discount provisions

In Türkiye, drug pricing is determined by the state → Foreign law does not apply.

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4. How is the competent court determined in case of a dispute in distribution agreements?

The type of dispute is the determining factor:

A. Disputes arising from the contract

→ The arbitration/court chosen by the parties shall prevail.

B. Product liability lawsuit

Turkish courts have exclusive jurisdiction.

C. Violation of competition law

→ Competition Authority and Turkish courts.

D. Administrative sanctions (Turkish Commercial Code)

→ Türkiye's authority is absolute.

E. Consumer lawsuit

→ Turkish courts have jurisdiction in favor of the consumer.

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5. Enforcement of Foreign Court or Arbitration Decisions in Türkiye

Enforcement is riskiest in the following areas:

A. Decisions regarding violations of advertising bans

It can be rejected on the grounds of being contrary to public order.

B. Decisions interfering with the pricing regime

It is against mandatory rules.

C. Misjudgment of PV obligations

Because it concerns public health, strict controls are in place.

D. Misjudgment regarding product safety

It cannot be enforced in Türkiye.

E. Competition law aspects of distribution chain violations

Decisions that violate Turkish competition law cannot be enforced.

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6. The Most Frequent Lawsuits Filed by Turkish Distributors Against Foreign Companies

The most common types of disputes according to 2025 data are:

• Unjustified termination

• Unfair competition

• Violation of exclusivity

• Contractual compensations

• Commission and receivables lawsuits

• Recourse lawsuits due to product safety issues

In these cases, Turkish courts to interpret the choice of law clause in contracts narrowly .

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7. Recommendations for Reducing Risks in Distribution Contracts

• The authorization requirement should be regulated in a way that does not violate public order

• The mandatory Turkish provisions must be clearly stated

• PV and recall processes should be written specifically for Türkiye

• Exclusivity should be left within the boundaries of competition law

• Data transfer must be compliant with KVKK/GDPR

• Termination clauses must be consistent with the Turkish Code of Obligations

• Insurance policies must be valid in Türkiye

• The arbitration clause must be clear and enforceable

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8. Conclusion: Distribution contracts are one of the riskiest commercial areas from the perspective of Private International Law

The pharmaceutical industry differs from other commercial contracts in that:

• Competition law,

• Product safety,

• Pharmacovigilance,

• Advertising bans,

• Storage and distribution standards

It has areas that are primarily focused on public order, such as those mentioned.

Therefore, even if the choice of law and jurisdiction conditions are met:

Mandatory Turkish provisions shall apply.
Turkish courts may also have jurisdiction in many cases.

Distribution agreements carry high legal risk and enforcement uncertainty for companies. Professional analyses under the Private International Law Act are therefore essential.