Outsourcing to Emerging Markets: The Effect of the European Economic Crisis - Pharmaceutical Technology

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Outsourcing to Emerging Markets: The Effect of the European Economic Crisis
Each developing economy has unique economic, political, and cultural issues that help define its pharmaceutical market. To succeed, multinational pharmaceutical companies will have to adapt differently.

Pharmaceutical Technology
Volume 36, Issue 2, pp. s34-s42


The Turkish pharmaceutical industry still lacks capital investment and subsequently has minimal R&D capabilities. Foreign investors are free to repatriate their profits outside Turkey as an incentive—subject to certain limited restrictions—and to acquire immovable property or rights in Turkey. As a result, a number of major developers have chosen to make Turkey a production base for pharmaceuticals serving the Middle East, Asia, and Eastern Europe (especially given the possibility of EU accession on the cards in the medium term). Among the 49 manufacturing facilities in the country, multinational firms own 13. The availability of a skilled workforce keeps improving but domestic patenting law is below international standards, with the protection of confidential test data and counterfeiting being key concerns.


The EM–7 region, while still a comparatively minor contributor to overall global drug sales for most global pharmaceutical companies, will likely grow in size and importance over time. In light of the primarily positive macro growth indicators across all the profiled EM–7 pharmaceutical markets, there will likely be heightened negotiations for partnerships between global pharmaceutical companies and locally based CMOs and CROs. Although European drug companies are showing more interest in these partnership opportunities, the US is not far behind. The key to ongoing success for the pharmaceutical industry in emerging markets remains the improvement of R&D productivity to a point where the discovery of new, meaningful products that can serve remaining unmet medical needs become a reality. Products like these could then see sustainable demand in both established and emerging markets alike.

Victor Coker is director of business intelligence at That's Nice, LLC, New York, NY,


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