AMSTERDAM and ISTANBUL, May 29, 2014 /PRNewswire/ --
CPhI Pharma Insights: Turkey report
Report warns that the Country's recent dynamism is being restricted by current Government reimbursement model
- Turkish market consists of 300 pharma companies, producing over 8000 drugs and employing 30000 people with a $7Bn turnover
- Turkish manufacturers are investing heavily in new facilities: Onko Koçsel investing €70 million on a new oncological manufacturing facility; Beko pharma investing in third €60 production site; Centurion spending €20 on its first facility. Even Turkey's largest pharmaceutical wholesaler, Pharmactive has entered into the market through a $120 million investment
- IP protection in country seen as underrated strength with many generics manufacturers now patenting their own processes
- Turkey a key destination for foreign investment with big pharma increasingly looking at facilities within the country, next 5 years should see renewed multinational investment
- Local manufacturers need to diversify product portfolios in order to prevent their facilities being acquired
- Turbitak grants helping R&D and domestic manufacturing innovation, which is now seen as vital in the next stage in industry's development
- Export led growth throughout MENA and East Europe regions seen as major driver of sales
- Overall growth forecast at 6% per annum, with Turkey's largest exporters seeing a double digit sales growth
CPhI Worldwide, part of UBM Live's Pharmaceutical Portfolio, announce 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 4-6th). 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 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 USA. For example, Nobel Pharmaceuticals last year accrued over $100 million in sales to foreign markets and growth at Onko Koçsel predicted to be a staggering 38% in 2014. Mustafa Nevzat is forecasting similar near-term growth to $50 million in international sales across an impressive 40 countries.
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.
Vefik Koral, Owner of Farkim, highlighted this growing trend, commenting: "The foreign/multinational companies now dominate with the larger Turkish firms acquired. There are only a few large-scale Turkish companies left in the market."
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. For example, Mustafa Nevzat is partnering with Amgen to increase its work in biotechnology.
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% 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[i]-with low prices consequently putting increasing pressure on profit margins.
However, this has seen a dynamic approach emerge within the industry and manufacturers 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.
"This comprehensive market report of the Turkish pharma economy is launching alongside the first ever CPhI Istanbul and the outlook both for the near and long term points strongly towards an increasingly prosperous and innovative marketplace. Growth domestically and as key regional hub for pharma products supply has firmly put Turkey on the global pharma map. What we are now seeing is an evolution of the industry internally with bold investments being made in biologics and even R&D programs. It's a rapidly changing country that is quickly moving beyond generics into new more advanced fields of manufacturing. The investment in this region over the next few years and the collaborations between international pharma and regional companies shows we are now witnessing the sorts of deals that are not only going to affect the Turkish healthcare economy but the entire MENA region." Chris Kilbee, Group Director Pharma.
Full report: a copy of Pharma insights report (shortened copy) is available online at
Attendees at CPhI Istanbul 2014 will also be able to receive a free printed version of the full length report including complete interview transcripts.
Notes to editors
Report respondents included: Pharmaceuticals Manufacturers Association of Turkey (İEİS); Abdi İbrahim; Ali Raif; Berko Pharmaceuticals; Biofarma; Centurion; Deva Holding; Ejder Kimya; Ekin Kimya; ERA Pharma; Farkim; Koç University; Onko Koçsel; Pharma Vision; Pharmactive; Yüksel Karkın Küçük; Mustafa Nevzat
About CPhI Istanbul
CPhI Istanbul and co-located events P-MEC, InnoPack and ICSE will bring together local Turkish and regional drug manufacturers with global suppliers of raw materials, machinery, packaging solutions and contract services. The events will host 100+ exhibitors and is expected to attract more than 3,500 visitors from the region looking for suppliers and manufacturing partners to bring cost-competitive pharmaceuticals to their individual markets.
CPhI drives growth and innovation at every step of the global pharmaceutical supply chain from drug discovery to finished dosage. Through exhibitions, conferences and online communities, CPhI brings together more than 100,000 pharmaceutical professionals each year to network, identify business opportunities and expand the global market. CPhI hosts events in Europe, China, India, Japan, Korea, Southeast Asia, Istanbul, Russia and South America and co-locates with ICSE for contract services, P-MEC for machinery, equipment & technology, InnoPack for pharmaceutical packaging and BioPh for biopharma. CPhI provides an online buyer & supplier directory at CPhI-Online.com.
For more information visit: http://www.cphi.com
The UBM Live annual schedule of Pharmaceutical events also includes CPhI Istanbul (4-6 June, 2014, at the LutfiKirdar Convention and Exhibition Centre- Turkey); CPhI, Hi and Fi, ICSE, P-MEC, BioPh and LabWorld China (26-28 June, 2014 at SNIEC- Shanghai, China); CPhI South America (5-7 August 2014 at Expo Centre Norte, Sao Paulo- Brazil); CPhI, ICSE Korea (2-3 September, 2014 at the COEX- Seoul, South Korea); CPhI, ICSE, P-MEC and InnoPack Worldwide (7-9 October 2014, Paris Nord Villepinte- France); CPhI and P-MEC India (2-4 December, 2014 at the Bombay Exhibition Centre- Mumbai); CPhI, ICSE, P-MEC, BioPh and Pharmatec Japan (22-24 April, 2015 at the Big Sight Exhibition Centre- Tokyo).CPhI Russia and IPhEB (27-29 April, 2015 at the VVC, Pavilion Nr 75, Moscow Russia); CPhI, P-MEC and Innopack South East Asia (26-28 May, 2015 at the Jakarta International Expo- Jakarta, Indonesia).
About UBM Live
UBM Live connects people and creates opportunities for companies across five continents to develop new business, meet customers, launch new products, promote their brands, and expand their market. Through premier brands such as TFM&A, Internet World, IFSEC, MD&M, CPhI, Cruise Shipping Miami, the Concrete Show, and many others, UBM Live exhibitions, conferences, awards programs, publications, Websites, and training and certification programs are an integral part of the marketing plans of companies across more than 20 industry sectors.
Headquartered in Singapore and with offices in Istanbul, Global Business Reports (GBR) was established in 2001 in order to provide up to date and first hand information for global business decision makers. In an age where cross boundary trade and investment and the globalization process are the driving factors for businesses, information is crucial. Precise sectorial reports help companies understand and expand their markets, improve their sourcing chain, target their investments and discover the trends affecting their industry around the world. GBR provides in depth surveys and up to date information and data covering all aspects of the hydrocarbon, Chemical, Pharmaceutical, Energy, Minerals, Mining and the Metallurgical industries around the world.
For previously published reports visit http://www.gbreports.com
i. The government compares costs of production ex-factory prices in other countries (currently Portugal, Spain, Italy, Greece and France). The lowest price is set as Turkey's reference price. After the initial price-referencing obstacle, Turkish pharma manufacturers are met with much larger issue in the shape of the euro-lira exchange rate used in the price calculation. The government has fixed the price of the euro to approximately 1,95 lira, despite it being worth approximately three liras.
SOURCE UBM Live