Turkey's two main pharmaceutical trade associations—Pharmaceutical Manufacturers' Association of Turkey (IEIS) and the Association of Research Based Pharmaceutical Companies (AIFD)—have been supporting the government's initiative with the publication of reports on the future of the Turkish drugs industry by two leading US-based consultants. AIFD published a report, Vision 2023, by PriceWaterhouseCoopers (PwC) in September 2012 and IEIS issued a study by the Boston Consulting Group (BCG) late last year (1, 2).
Turkey, one of the world's fastest growing emerging economies, faces considerable challenges in achieving its aim of becoming a major global power in pharmaceuticals. Within its own market, it will have to triple the average annual growth rate and raise the annual increase of domestic production sales 12-fold, while exports will have to increase almost six times, according to PwC.There also needs to be a big improvement in relations between the industry and government, particularly with research-based companies, most of them multinational players. Companies have been critical of the power wielded over the sector by the Turkish Ministry of Health, which accounts for more than three quarters of drug purchases.
Earlier this year, AIFD accused the government of not doing enough to encourage investment and being too focused on cutting drug prices. Now, as the government works on an action plan for the sector, ties between the two sides have become closer. Kadir Tepebasi, AIFD vice chairman, said in July at the BIO International Convention in Boston, "We are very happy and excited" that the government and the research-driven segment had the same long-term targets and approaches.
Nihat Ergun, the minister of science, industry, and technology whose department is responsible for the development of the pharmaceuticals sector, has revealed that the strategy document due to be finalized by the end of this year will highlight R&D assistance, investment in human resources, and more backing for drugs exports.
The PwC and BCG reports propose that the industry can reach ambitious targets by 2023—if the appropriate steps are taken. A substantial increase in domestic and foreign investment in the sector is required, especially in production capacity for high value-added medicines, according to PwC. BCG stresses the importance of the development of production and R&D clusters.
Over the next 10 years, the objective of more than doubling pharmaceutical production to $23 billion, raising exports from approximately $520 million last year to approximately $7 billion, turning a current trade deficit of more than 80% into a net surplus, and increasing R&D investment from around $100 million to $1.7 million "is not just a dream," says Guldem Berkham, AIFD president.
Both the industry and the government believe that the country has several advantages that provide a platform for the rapid growth of the pharmaceutical sector. The country's domestic-drugs market has more than doubled over the past 10 years, while with a population of 75 million, its per capita medicines consumption is still relatively low. Over the past decade, visits to primary care facilities have more than tripled and to hospitals more than doubled, according to BCG.