CPhI Worldwide, part of UBM Live’s Pharmaceutical Portfolio, has announced the findings of its Pharma Insights report on Turkey ahead of an in-depth study to be published free of charge at CPhI Istanbul (June 4-6). The comprehensive analysis of the Turkish pharma market was conducted amongst all major Turkish manufacturers, evaluating conditions for both foreign and domestic companies, and was compiled with the help of research partner Global Business Reports.
Overall the report concludes that pricing challenges domestically have had a parallel effect of increasing the dynamism in the market and improving overall competitiveness of the sector. As a result, the country now boasts a highly price efficient manufacturing industry far cheaper than those in the West, coupled with a comparable regulatory standards, providing an ideal mix of factors to establish Turkey as the key regional pharma economy.
If reimbursement conditions improve, this should provide the right environment for a burgeoning healthcare industry, with Turkey having seen GDP per capita triple in the last 10-years alone. However, beyond the domestic reimbursement market, niche products and export led growth is also providing a significant avenue for greater revenues.
Investment in new facilities is now taking place across the market, which CPhI concludes will see Turkey establish itself as the definitive player and supplier of drugs across the MENA and CIS regions, with exports even as far reaching as the Baltic states. Ultimately, the country’s manufacturers are now aiming to begin supplying directly into Europe and even the US.
An increasingly prosperous population and a growing healthcare economy, coupled with a manufacturing base that has many FDA and EMEA approved sites means foreign direct investment is increasing.
As such, those that remain will increasingly form collaborations and partnerships that will be an essential driver of Turkey’s R&D sector, and international companies are again showing an increased interest in the Turkish market.
The Government is also helping to reduce the trade deficit and increase innovation by offering corporate tax relief, access to institutions including Tubitak, and R&D expenditure support which for accredited R&D centres covers 60 per cent of staff expenditures.
One conclusion, that some international companies may find surprising, is that the country has a very robust IP protection environment, with many Turkish owned manufacturers regularly patenting their own processes. In fact, in the recent International IP Report, published in January 2014 by The Global Intellectual Property Center (GIPC) under the US Chamber of Commerce, Turkey now ranks 10th out of 25 countries in terms of patents, related rights, and limitations. International companies are now catching up with this reality and a significant increase in manufacturing R&D work and contract manufacturing is being observed.
A major obstacle for growth (experienced universally) in the Turkish pharmaceutical industry is the Government’s price referencing system and a fixed euro-lira conversion rate- with low prices consequently putting increasing pressure on profit margins.
However, this has seen a dynamic approach emerge within the industry and manufactures are looking to new horizons like biologics, niche products and most significantly, at the export market particularly in central Asia and CIS regions. This new R&D focus is exemplified by the significant investment made in manufacturing facilities with Pharmactive ($120 million), Onko Koçsel (€70 millio), Beko pharma (€60 million) and Centurion (€20 million) having committed to huge facility developments.