Pharmaceutical Executive Europe - October 2008 - (Page EC4)

War II origins, have built Turkey into a branded market, where generics account for more than half of total volume. Antibiotics are market bestsellers, but the main growth-drivers are products in chronic disease sectors, especially cardiology, central nervous system and gastro-intestinal. But with intensifying generics competition and regulators committed to containing drug costs, several Turkish manufacturers are looking to high-tech, niche products and overseas markets for future fortune. Mustafa Nevzat, Turkey’s only FDA-approved company for finished products, is nearing completion on a production facility for oncologicals that could be exporting to the US by 2009. Fresh off new capital investments, Biofarma plans to add 13 new export territories and begin construction on a production site for cancer drugs by the end of next year. But for all the strides made, significant obstacles lie ahead for Turkey, chief among them government inconsistency and political instability. While health regulations are nearly harmonized with those in Europe, company executives complain about poor applications of current laws, including the 210-day product registration period and a reimbursement list that is seen as biased and incomplete. “What we would like from the government is a more effective cooperation with the industry,” says Murat Barlas, chairman of Liba Laboratories. “What we are waiting for is a centralized and independent drug authority like FDA.” Some executives also worry Turkish manufacturers are not positioned to ward off an economic downturn, especially companies without global presence. Pharma exports were less than 4% of the industry’s value — about $357 million — with about half coming from raw materials. API production in Turkey has been in severe decline, undercut by China and India’s high-volume, low-price models. Worries about Chinese and Indian generics companies encroaching on the Turkish drug market have begun to materialize. “We may have a Chinese or Indian invasion worldwide,” says Dr. Cengiz Sezen, chairman of the Board of Mustafa Nevzat. “It is possible, economically.” Yet others see the branding strength of Turkish generics players, with domestic credibility and more acceptance in the global economy, holding an edge over China and India. “When you look at the record, the development of Indian and Chinese companies trying to get into the branded generics markets is very poor,” says Clemens von Oswald, country head for Sandoz Turkey. “For the foreseeable future, Turkey will be a branded generics market. We have a strong growth and a clear positioning in terms of market dynamics.” Bridge to the EU — harmonizing health standards In Turkey’s ongoing bid for EU accession, no industry has made bigger strides than pharmaceuticals. Since passing a patent legislation in 1995, the government has made significant reforms that have calmed the fears of international regulators and stimulated interest from foreign investors. In 2005, the Ministry of Health reorganized the reimbursement system, leading to larger drug coverage, and the year before it created a reference-pricing system to replace a cost-plus pricing scheme that had been seen as overly complex and opaque. Turkey also implemented a long-awaited data exclusivity legislation that granted 6 years of protection to products registered before 1 January 2005 within the European Customs Union. Products registered between January 2001 and 2005 also benefited from protection if no registered generic or generic application for that molecule existed in Turkey as of January 2005. In addition, one of the most critical reforms was a unification of Turkey’s three social security systems that streamlined the government’s medical coverage and gave social security users easier access to drugs. 4 OCTOBER 2008 PHARMACEUTICAL EXECUTIVE EUROPE http://www.perfektup.com http://www.perfektup.com

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Pharmaceutical Executive Europe - October 2008 Contents News and Analysis Calendar BioFutures Strategy Fundamentals Executive Recruitment: Small Company, Big Career Executive Recruitment: Instant Pharma Named Patient Programmes Executive Review: Turkey

Pharmaceutical Executive Europe - October 2008

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