OBJECTIVES: The Turkish population health status improved significantly with the implementation of the Health Transformation Programme (HTP) and reference pricing system in 2004.This study analyzed pharmaceutical industry dynamics due to these changes in Turkey since 2004. METHODS: Using data from the Turkish Statistical Institute Industry Database (2001-2011), trends in total, production and pharmaceutical industry production indexes were evaluated. Interrupted time series models were used to determine the effect of changes in 2004. Using the IMS LifeLink Health Plan Claims Dataset (2004-2011), pharmaceutical market growth rate trends were analyzed.  Subgroup analysis was performed for brand, generic, and 20-year old drugs.  Both domestic and imported drug shares (units, expenditures) were compared (2005-2011). RESULTS: The 2004 reference pricing system implementation negatively affected the pharmaceutical production index, with discounts ranging from 1% to 80% for approximately 1,000 medications based on comparisons of biologically-equivalent products and pharmaceutical prices in five, low-price European countries (p<0.01). There were no significant changes in total and production industry indexes. Although brand medication market shares remained constant across the years (2004: 42.2%, 2011: 42.6%), unit shares significantly increased, (2004: 12.4%, 2011: 16.9%). The opposite trend occurred in the generic market. Although generic medication expenditures slightly increased (2004: 14.6%, 2011: 16.2%), unit consumption decreased (2004: 13.6%, 2011: 9.7%). The 2004-2011 trends for unit and cost shares were not significantly different for 20-year old drugs (cost share: 43.3% vs. 41.2%, unit consumption: 74.0% vs. 73.4%, respectively). CONCLUSIONS: Changing the pricing systems with instantaneous amendments of the regulations impacts not only the reduction of drug prices and fiscal policy but also the structure and investments of the pharmaceutical industry. While solutions are being developed to increase drug expenses, long-term perspective of the industry’s situation and monitoring of effects are important with respect to sustainability.