Turkey Pharma report OCTOBER 2012

Brought to you by

FOCUS REPORTS

January 2012

1

TURKEY

For exclusive ITVs and more insights, log on to pharma.focusreports.net

Brought to you by

Pharma.FocusReports.net

TURKEY

Acknowledgements Focus Reports would like to warmly thank Alp Sevindik, Secretary General and COO of AIFD, Cengiz Celayir, Chairman of the Board of TISD, and Turgut Tokgöz, Secretary General of IEIS, for their great support and contribution to this report.

4

October 2012

FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

This report was prepared by Focus Reports Project Director: Nicolas Carayon Project Coordinator: Solène Pignet Project Publisher: Ines Nandin Project Assistant: Roslan Khasawneh

Contents Acknowledgements..................................................................................................4 Turkey: east, West and Profits!.................................................................................7 Making Universal Healthcare a reality ...................................................................8 Vision 2023 ................................................................................................................9 Women’s Strong Pharma Presence........................................................................10 Toward a new era in pricing .................................................................................10 Facing Market Delays.............................................................................................12 A Strategic R&D center..........................................................................................13 Merck Serono: All About Location.........................................................................14 A Growing Management Hub...............................................................................14 Top 20 firms: value vs. volume, ims 2011..............................................................16 M&A Activity on the Rise ......................................................................................16 Corfena’’s Global Take On Business......................................................................17 Interview with Interview with Nihat Ergün, Turkey’s Minister of Science, Industry and Technology........................................................................................18 Interview with Turgut Tokgöz, Secretary General of IEIS, Pharmaceutical Manufacturers Association of Turkey..............................................................................................20 Interview with Ilker Ayci, President of Investment Support and Promotion Agency of Turkey..................22 Interview with Emin Fadillioglu, General Manager, GSK..............................................................24

Copyright © All rights reserved. No part of this publication maybe reproduced in any form or by any means, whether electronic, mechanical or otherwise including photocopying, recording or any information storage or retrieval system without prior written consent of Focus Reports. While every attempt is made to ensure the accuracy of the information contained in this report, neither Focus Reports, neither the authors accept any liabilities for errors and omissions. Opinions expressed in this report are not necessarily those of the authors.

FOCUS REPORTS

Interview with Güldem Berkman, General Manager of Novartis & Chairman of AIFD.............................................26 Interview with Matthieu Accolas, General Manager of Servier Turkey.......................................28 Interview with Fatih Acar, President of SGK, Social Security Institution.....................................30 Interview with Cüneyt Balıkçıoglu, General Manager of Ferring Turkey.....................................32

October 2012

5

Pharma.FocusReports.net

TURKEY

6

October 2012

FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

Special SponSored Section

Cover art by Turkish local artist Deniz Karakaya

turkey report

Turkey:

east, West and Profits! Turkey’s Turning Point In the global theater of business and politics, Turkey increasingly leverages its location as an ideal vantage point where actors can seamlessly move between all things West and East. An emerging Asian market with a special relationship to the European Union and close ties with the Middle East, Turkey’s strategic geopolitical position is a place where multinational players want to be. The pharmaceutical industry is no exception. With a growing, aging population and a young, highly skilled workforce,

FOCUS REPORTS

Turkey’s demographics are also a draw. Economically, the country boasts a GDP topping more than 8 percent in 2010 and 2011 and is weathering the global economic crisis better than many of its European neighbors. The pharmaceutical industry has also enjoyed a wave of expansion. According to IMS, the Turkish pharma market reached USD 9.8 billion in 2011 and experienced 10 percent growth in volume. This has attracted some of the industry’s biggest players. In recent years, Novartis, Merck Serono, GSK, Sanofi, and Novo

This sponsored supplement was produced by Focus Reports. Project Director: Project Coordinator: Contributor: Project Publisher: Editorial: Managing Editor:

Nicolas Carayon Solène Pignet Roslan Khasawneh Ines Nandin Rachel Marusak Hermann Fred Gebhart

For exclusive interviews and more info, please log onto or write to [email protected] octoBer 2012

FOCUS REPORTS S2

October 2012

7

Pharma.FocusReports.net

TURKEY

Special SponSored Section

turkey report Nordisk have made the country a regional center of operations. Nonetheless, major national healthcare reforms, drastic price reductions, and market access delays have made Turkey’s pharmaceutical market a particularly challenging place the past few years. But with a new budget period beginning in 2013 and signs that the government may be looking to turn a corner, the industry is preparing for the day when Turkey becomes one of the next big pharma countries.

Nihat Ergün, Turkey’s minister of Science, Industry and Technology

Making Universal HealtHcare a reality Over the past decade, Turkey’s healthcare system has been radically reformed. With the election of the Justice and Development Party in 2002, universal healthcare became a top national priority. Sweeping reforms began the following year with the enactment of the Health Transformation Program. First, the country’s three social security schemes were united under the Social Security Institute (SGK). Then, in 2008, the Universal Health Insurance law was passed, aiming to make healthcare widely available. Finally, in 2010, the family practitioner system was implemented, providing low-cost care by

* " Hastaların yaşamlarını iyileştirmek için dünyanın her yerinde canla başla çalışıyoruz. "

P Celgene_1-1.pgs magenta cyan 08.30.2012 16:30 yellow black S3 FOCUS REPORTS

8

2005 – 2011: TURKISH MARKET GROWTH IN VALUE (IEIS) 8

6 5.06

5.24

2005

2006

6.90

6.19

6.32

6.48

2007

2008

2009

5.99

4

2

0 (*)

3.5%

18.1%

2.1%

2.6%

2010

6.5%

2011

-13.3%

local doctors to citizens across the country. According to Fatih Acar, president of the SGK, the reforms have made “access to healthcare services easier and waiting periods have been shortened.” He said that most of the population is now covered and that Turkey is considered the “most expanded healthcare provider country in Europe.” Ays¸ e Çetinel Sapmaz has been the managing director of Janssen, the pharmaceutical company of J&J, in Turkey for the past 11 years and witnessed the dramatic change in the country’s healthcare system. “Access to healthcare has increased dramatically—and this is of course something that we view positively. People are no longer left waiting in queues; they have access to doctors, they have access to treatment. From a societal point of view, things are moving in the right direction,” she said. On the other hand, critics raise conFatih Acar, president cerns that new healthcare policy has led of the Social Security to over-use of the system. Alp Sevindik, Institution (SGK) secretary general and COO of the Association of Research Based Pharmaceutical Companies (AIFD), explained, “In 2002, Turkish citizens would visit a doctor three times a year, on average. However, the numbers of visits have now risen to eight. Of course, most of these visits result in a prescription. Hence, one of the problems we are currently facing is government induced volume or demand. If the government wants to provide this level of quality of health service, the volume of medicine usage will expectedly increase and accordingly, so should the budget to account for that. Unfortunately, that has not been the case.” According to the SGK, expenditures on pharmaceuticals increased from TRY 7.8 billion (USD 2.3 billion) in 2004 to TRY 15.8 billion (USD 8.7 billion) in 2011.

HCL Premedia

octoBer 2012

October 2012

FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

Special SponSored Section

Vision 2023 In 2010, Turkey was ranked the 6th largest pharmaceutical market in Europe and the 14th largest in the world. According to a recent report by the Pharmaceutical Manufacturers Association of Turkey (IEIS) in collaboration with the Boston Consulting Group (BCG), Alp Sevindik, secretary general the country could be doing a lot and COO of the better. Research Based Turgut Tokgöz, secretary generPharmaceutical Companies al of IEIS, said that in recent years, Association (AIFD) Turkey has been far too “inwardlooking” to take real advantage of the international market. “The local market was vibrant and as the pharma industry is heavily regulated, it requires a large amount of effort and capital to export products,” he said. “Unfortunately, the industry has taken the easy route and has been focusing on the local market, which has been growing quite handsomely. Now that they are somewhat squeezed domestically, they are very much interested in export markets. This puts Turkey in a late-comer phase and it is not easy Turgut Tokgöz, Toköz, to gain a good market share in ex- Turgut secretary of secretary general of port markets. The train has already the the PharmaceutiPharmaceutical Manufacturerers Manufacturerers been moving, but it is still possible cal Association Association of Turkey to catch it,” Tokgöz said. (IEIS) (IEIS) That is just what the Turkish government and industry leaders intend to do. As the 100-year anniversary of the Turkish Republic approaches (Atatürk founded modern Turkey in 1923), the government has set some ambitious goals for the country, including becoming a top-ten economy, fixing the country’s trade deficit, and increasing the country’s annual exports to USD 500 billion. Specific goals have been set for the pharmaceutical industry, which accounted for 10 percent of the total trade deficit in 2010 (excluding energy imports) due to a high level of imports versus a low level of exports. That year, the sector’s imports were valued at USD 4.4 billion, while exports flat lined at USD 600 million. The IEIS/BCG report suggests Cengiz Celayir, that proper measures could boost chairman of the the country’s pharmaceutical exBoard of TISD

Our purpose: Make a difference Over the last half-century, we have brought together a family of innovative pharmaceutical companies all with one overarching mission: to address and solve some of the most important unmet medical needs of our time. Janssen companies are focused on developing groundbreaking treatments in five major therapeutic areas: Neuroscience, Infectious Diseases, Oncology, Immunology and Cardiovascular/Metabolism, and our product portfolio addresses other critical areas as well. We are people helping people- we work closely together to harness our combined knowledge and resources, leverage the power and promise of outstanding science, and enhance the length and quality of life for people throughout the world. At Janssen, we passionately pursue science for the benefit of patients everywhere.

Mario Mesa, Social Fire Artwork from the National Art Exhibitions of the Mentally III Inc. Janssen is proud to feature artwork created by people affected by the illnesses and diseases we are committed to treating and preventing.

Johnson and Johnson Sıhhi Malzeme San. ve Tic. Ltd. Şti.

octoBer 2012

FOCUS REPORTS

FOCUS REPORTS S4

October 2012

9

Pharma.FocusReports.net

TURKEY

Special SponSored Section

turkey report

Women’s Strong Pharma Presence While there may still be few women holding positions of political power in Turkey, their influence has been growing in the private sector. Increasingly, women in Turkey are taking on key executive roles. From Novartis and J&J to Merck Serono and Novo Nordisk, when it comes to heading the affiliates of several major multinational pharma companies, women are leading the way. The same goes for local firms, such as CORENA and PharmaVision, where women can also be found in top spots. Güldem Berkman, Güldem Berkman, country head of Novartis and country head of president of the AIFD, has been named one of the Novartis Turkey and president of AIFD country’s most influential women. For her, success has been a question of striking the right balance. “My personal definition of success is one’s ability to make a difference. This applies both in my private life and professional life. For me, being successful is creating value in whatever you are doing,” she explained. Meltem Kurtsan, co-founder of KAGIDER, the country’s leading women entrepreneurs’ association, said that she is pleased to “witness the increased presence of women leaders in the pharmaceutical sector.” As part of its mission, the association supports, trains and mentors Turkish women, of all backgrounds, in advancing professionally. ports to USD 16.5 billion by the 2023 deadline. AIFD has been working in partnership with government to encourage long-term policies that support innovation. It has developed a strategic document called the “Vision 2023” study, which recommends increasing the level of R&D and clinical research.

Toward a New era iN PriciNg With the sweeping healthcare reforms also came a number of policies that have severely impacted pharmaceutical prices and have been widely criticized by industry leaders. Starting in 2004, the government established a revised reference pricing system for pharmaceutical reimbursements. The Ays¸e Çetinel reference price of Sapmaz, managing director of Janssen an original prodTurkey uct is based on October 2012 10 S5 FOCUS REPORTS octoBer 2012

the lowest ex-factory price among five EU reference countries, including France, Spain, Italy, Portugal and Greece. In 2009, the Euro/ Turkish Lira ex- Cüneyt Balikçiog˘lu, change rate was general manager of set at 1.9595. Ferring Turkey Critics argue that this rate is not representative of current price levels. During September 2009, the government also announced a price decree that led to higher discounts on innovative drugs. As a consequence of these pricing policies, pharmaceutical companies operating in Turkey experienced great difficulty maintaining profitability. The International Investors Association (YASED), a non-governmental organization that represents international companies operating in Turkey, has taken issue with pharmaceutical FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

Special SponSored Section

turkey report Cüneyt Balıkçıog lu, general manager cost containment policies. Ugur Özkutlu, chairman of the as- of Ferring Pharmaceuticals’ operations in sociation’s Access to Health Working Turkey, entered the market in 2005 with Group, said, “The past three years have high hopes. But the hurdles he faced the been lost from our side. The discounts past few years stunted the growth that he have gradually increased from 23 percent was hoping to achieve. “We were not only negatively affected to 32.5 percent to 41 percent today. In by the price discounts, but also that context, the pharma comby the fixed exchange rate that panies in Turkey have faced hasn’t been adjusted for the last the worst setback ever. While couple of years and reference the total market growth was pricing issues. Prior to these 2.7 percent, multinational developments, our parent comcompanies’ growth here was pany was putting a lot of emnegative 2.5 percent last year.” phasis and positive outlooks on Çetinel Sapmaz of Janssen our Turkish branch,” he said. said, “The new pricing mecha“With the impact of these nism has enforced not only the Matthieu Accolas, lowest prices in Turkey, but general manager of developments, we were not able Servier Turkey to live up to those expectations. also a high number of mandaIn my opinion, I think that we tory discounts. This has put the country at a level that is 50-60 per- could have achieved at least three times cent lower than mean European prices. the success and contribution that we have now realized, had these changes not takWe do not find this sustainable.”

FOCUS REPORTS

magenta cyan yellow black

place. I find this both enen place. I find this both disappointing disappointing and  frustrating,” and frustrating,” Balıkçıog lu said. Balikçioglu For Servier,said. a French pharmaceutical For the Servier, a French company, pricing constraints have led company, pricing thepharmaceutical company to focus on itsthe core drugs have leddiversifying. the company to in constraints Turkey, rather than Matfocus on its general core drugs in Turkey, thieu Accolas, manager for the rather than diversifying. Matthieu company in Turkey, explained, “In a Accolas, general manager for the company Turkey, explained, “In Servier Turkeyin Team a situation like this, it is critical to focus on the drugs which are sustainable. At the we situation like this, it is same criticaltime, to focus together a team in onrecently the drugsput which are sustainable. At identify the bestput and most theorder sametotime, we recently together effective waystotoidentify adapt to needs a team in order thethe best and of the patients the doctors, to most effective waysand to adapt to the needs newdoctors, answersto and of ultimately the patientsbring and the ultisolutions theanswers market.” mately bringtonew and solutions Asmarket.” Turkey’s two-year Global to the Budget plantwo-year comes Global to a close, As Turkey’s Budget industry are hopeful plan comes toleaders a close, industry leaders negotiations of the arethat hopeful that negotiations of thenext next

octoBer 2012

FOCUS REPORTS S6

October 2012

CR Turkey Ad HP Novo_1-1.pgs 08.30.2012 16:33

11

HCL Premedia

Pharma.FocusReports.net

TURKEY

Turkey Report budget period from 2013-2015 will be ited market access. A 2011 AIFD survey ing some files for foreign managers. In found that the regulatory approval pro- general, Turkey has been very much unmore favorable. Sevindik of AIFD said, “Our first cedure in Turkey is far from reaching Eu- prepared to international regulatory processes,” said Gündüz. meeting to discuss the next budget with ropean Union standards. Additionally, with the application of According to the survey, the Social Security Institution the average waiting time for Good Manufacturing Practices (GMP) and the Ministry of Health drug approval is 772 days and certification rules, it is increasingly difwas a positive one where, uncan be as long as 1,500 days ficult for companies to import products. like before, all of the relevant for some drugs. In the EU, the Özbay of Daiichi Sankyo said, “If you stakeholders were present. standard timeframe for regula- produce a product outside Turkey, the Obviously, this creates a much tory approval is set at 210 days. Turkish Minster of Health send inspecbetter environment that will Turkey had committed to make tors to your production site, who apallow us to build a more raan effort to meet this standard. prove it.” tional and realistic budget and “As the Minister of Health has a limFor Olcay Gündüz, CEO of discuss the system for a sus- Dr S¸ebnem Avs¸ar Münir S¸ahin, one of the oldest ited number of inspectors, this whole tainable financing of pharma- Tuna, general manager of Novo pharmaceutical companies in process takes time. There are today 350 ceutical spending.” Nordisk Turkey Turkey, many companies are products in the waiting list, and with the The SGK has also indicated trying to catch up to interna- current frequency of inspectors visiting that the next budgetary period could alleviate some of the pricing pres- tional standards. “Outside Turkey, most the different sites, it is said that it will sures. Fatih Acar, president of the SGK, countries have changed their registration take five years to have all these products approved,” he said. said, “As public management, we don’t process; they are now all folDr. S¸ebnem Avs¸ar Tuna, desire to continue controlling the drug ex- lowing the European Medicines Novo Nordisk’s general manpenditures with public discount increase Agency (EMA) or the Food & ager in Turkey, said that due and reduces in price. We intend to create a Drug Administration (FDA). As to such entry barriers, the stronger and more sustainable industry. I a result, they are all looking for company has not been able to think this is very significant for the future Common Technical Document introduce a new product in the (CTD) format files.” of the sector.” country for the last six years. “Turkish companies only “This has put us in a very difadopted the CTD format in Facing Market Delays Beyond pricing policy challenges, the 2005 and 2006. I myself start- Dr ˙lIker Özbay, gener- ficult and uncomfortable posipharmaceutical industry is also deal- ed to prepare CTD dossiers in al manager of Daiichi tion not only as a business, but also as a provider of drugs. I ing with slow drug approvals and lim- 2008, and I am still translat- Sankyo Turkey

magenta yellow cyan black

S7 FOCUS REPORTS

12

OCTOBER 2012

October 2012

CR Turkey Ad TP Servier_1-1.pgs 08.30.2012 16:34

HCL Premedia FOCUS REPORTS

Pharma.FocusReports.net Special SponSored Section

TURKEY

turkey report believe this is a lost opportunity for the Turkish public since these are promising products for the treatment of diabetes patients as well as patients with growth hormone deficiencies,” she said.

A StrAtegic r&D center As part of the country’s 2023 vision, positioning the country as a hub for R&D, production, and operations in the pharmaceutical industry is a central part of the government’s strategy. In this context, the Ministry of Science, Industry and Technology has prepared a “Draft Strategy Document for the Pharmaceuticals Industry,” which covers 2011-2015 and includes objectives and action items to encourage R&D investment in the country. The government seems to be making a concerted effort to reach out to the pharmaceutical industry. Last June, Turkey participated in the 2012 BIO Convention, one of the world’s largest biotechnology platforms, for the first time with a ministry-led delegation, including His Excellency Nihat Ergün, minister of Science, Industry and Technology. His message to the pharmaceutical industry was clear. “Turkey can provide substantial competitive advantage for R&D and production investments of innovative pharmaceutical industry,” Ergün said during a speech at the convention held in Boston. So far, some concrete advantages offered by the government include income tax exemptions, grants, deductions for R&D enterprises employing at least 50 people, and other incentives. Mehmet Yusuf, Industry leaders are convinced of managing director Turkey’s potential. Hervé Dussart, presof Altis Medical ident of AstraZeneca, agrees, “What Research Turkey happens today in Turkey? A few companies have moved their regional headquarters in Istanbul. But what will bring revenue is R&D, and manufacturing, and probably the right combination of both.” The Investment Support and Promotion Agency of Turkey (ISPAT) also sees great potential in the pharmaceutical R&D sector. Ilker Aycı, association president, said, “ISPAT is in accord with the pharma industry’s view that Turkey has all the qualification to be an R&D and manufacturing center for biotechnology and biosimilar products as well as a hub for pharmaceutical innovation and development with its highly qualified workforce, attractive regulatory environment and incentive structures.” “In this regard, ISPAT’s promotion and support activities focus to improve pharmaceutical industry’s international competitiveness, and position the Turkish pharma industry, as one of the global R&D and production hubs, a net exporter and a regional management center,” Aycı explained. Mehmet Yusuf, founder of Altis CRO, one of the pioneer-

ing clinical research organizations in Turkey, is confident in the evolution of Turkey’s R&D environment and is optimistic for his company’s development. “Turkey boasts an immense number of (hospital) beds, as well as an equally large number of people treated for various kinds of diseases. The annual turnover of patients visiting hospitals is also great, at about 80 million; exceeding the size of the population. Moreover, the number of potential researchers for clinical trials is also significant. This includes doctors in universities, teaching hospitals and people in specialty training. This leaves you with a massive pool of talent and patients for this sector which is already a very powerful argument,” said Yusuf. Beyond the favorable infrastructure, the clinical trials legislation in Turkey is in full compliance with international standards. Not only did the country have its own high standards of clinical trial regulation since Marco Caligiuri, the early 1990s, but it has also adopted the general manager of Celgene Turkey EU directive on implementing the Good

octoBer 2012

FOCUS REPORTS

FOCUS REPORTS S8

October 2012

13

Pharma.FocusReports.net

TURKEY

Special SponSoRed SecTion

Turkey Report

Merck Serono: All About Location Focus Reports met with Elçin Ergün, regional vice president and head of the intercontinental region at Merck Serono. Since the beginning of the year, Ergün manages 69 countries in Russia, the Caucasus, Central Asia, the Middle East and Africa, from her office in Istanbul. She explained why Turkey is an ideal geostrategic location. Why was Turkey the right location for a regional management hub? Turkey is the biggest pharma market in the region by size and the most developed in terms of its pharma environment. The country has a very good infrastructure and an ambitious, energetic, committed workforce. Also, the country is a gateway to Asia and the Middle East, so excellently positioned

How have you molded Merck to serve as a hub for the Serono into a global firm with region. And, thanks to the a local touch? enormous development of We tend to adapt our core Turkish Airlines, it is also strategy to emerging markets very easy to reach suband in doing so, consider all regional hubs such as Tuneeds of the population in a nisia, Moscow, Dubai, and given market and shape our many Sub-Saharan African portfolio offerings accordingly. countries. We are also looking to Elçin Ergün, regional In Sub-Saharan Africa, for instance, we have enacted an increase our R&D invest- vice president and anti-infective strategy. We are ment in a targeted way head of intercontinental region of also much more open to exin Turkey. Recently, Tur- Merck Serono ternal business development key’s Minister of Science, opportunities and alliances in Industry and Technology, declared that Turkey’s pharma future emerging markets. For example, in my lies in an export-led market, R&D in- region, we can complement our prodvestments and biotechnology. They are ucts and fully utilize our disease exnow putting incentive mechanisms to pertise in areas such as diabetes and cardiovascular diseases. support this vision.

Clinical Practice (GCP) guidelines in 2009. An important consideration for multinational companies, which are also recognizing the country’s potential to become an R&D center. Avs¸ ar Tuna of Novo Nordisk said, “We are proud to support R&D and innovation in Turkey. Together with leading Turkish doctors, we currently run numerous clinical trials in Turkey and in Ayci, president of the Investment 2011 entered into a long-term partnership Support and with Kocaeli University to support breakPromotion Agency through basic research projects and foster of Turkey (ISPAT) international knowledge-sharing.” Celgene, a global biopharmaceutical company, has also invested in Turkey as an R&D hub. Marco Caligiuri, country manager, said, “We have initiated since 2008 an important clinical program, with both company-driven and investigatorinitiated clinical trials, investing in it more than 30 percent of our revenue 2008 and 2011.” “In fact, we have involved in our clinical program hundreds of Turkish patients, not only in haematological malignancies with lenalidomide and azacitidine, but also in immuno-inflammatory diseases, such as Behcet’s syndrome with apremilast, a TNF-alpha inhibitor. This trial can represent an important example of our R&D commitment in Turkey, considering that here we can find the highest prevalence in the world, and more than 80 percent of patients enrolled in this international trial are Turkish,” said Caligiuri. Servier is also committed to investing in R&D in the counS9 FOCUS REPORTS

14

try. Accolas said, “Overall Servier is investing TRY 7 million (USD 3.8 million) each year in Turkey, including research. We work with numerous Turkish scientific societies and universities. Depending on which research program we want to run and in which specific field, we look for the most adapted partnership.”

A GrowinG MAnAGeMent Hub Although pharmaceutical companies in Turkey have been struggling in the face of market challenges, multinational companies are increasingly choosing the country as their base for Middle East, Africa and Asia operations. GlaxoSmithKline (GSK) recently moved its regional center from Dubai to Istanbul. Additionally, the company appointed its General Manager and Vice President of Turkey as Senior Vice President, responsible for Middle East and Africa in the Emerging Markets and Asia Pacific, a region of 30 countries. Dr. Emin Fadıllıoglu, country president of GSK Turkey, said, “Turkey has an excellent talent profile. The country has technology, people, a large demand, and a significant geographic advantage, located in the middle of Europe and the Middle East. What else do you need?” Novo Nordisk was one of the first to make the country its regional hub. “Strategically, we have chosen Turkey to serve as the regional centre for several reasons. One attractive aspect of the country to us is its political and economic strength and stability,” explained Avs¸ ar Tuna. Similarly, last April, Novartis selected Turkey as its headquarters for central Asia, the Middle East and Africa and intends to set up a new manufacturing facility in the country.

ocToBeR 2012

October 2012

FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

We take on responsibility:

Together with the World Health Organization (WHO), Merck is fighting the worm disease schistosomiasis in Africa. www.merckgroup.com/praziquantel

Merck Serono is a division of Merck

FOCUS REPORTS

October 2012

15

Pharma.FocusReports.net

TURKEY

Special SponSoRed SecTion

Turkey Report Top 20 firms: value vs. volume, ims 2011. 1,400,000,000

180,000,000 160,000,000

1,200,000,000

140,000,000

1,000,000,000

120,000,000

800,000,000

100,000,000

600,000,000

80,000,000 60,000,000

400,000,000

40,000,000

200,000,000

20,000,000

0

TL

Novartis board member Alexandre Jetzer-Chung noted that in recent years, Turkey has emerged as a regional center. At Merck Serono, restructuring will put Elçin Ergün at the head of 69 countries from her office in Istanbul. For Murat Yesildere, managing partner at Egon Zehnder

OT T UL AG AY AL IR AI F NO SA BE NT L A FA RM A ZE M US NT IV TA A FA BO EH NEV ZA RI NG T ER IN G.

.S .D .

I.E

AB B

M

RA HI M VA RT IS BI LI EA M ST PF PH I ZE AR R M GL A AX (D OS EV A) M IT HK LI NE SA NO FI B AY AS ER TR AZ EN EC A SA NO VE L RO CH E NO

IB DI AB

0

# of Boxes

International, a global executive search firm, investing in local talent is the right strategy. “The multinational organizations in Turkey which are successful are the one which have invested a lot in evaluating and hiring the right talent at the top of the company, and then delegating extensively to this person, rather than sending an expatriated and having the most important decisions taken some place else,” Yesildere explained.

M&A Activity on the Rise

Münir Sahin produces 10 million boxes of drugs annually in the form of tablets, filmcoated tablets, granules, syrups, suspensions, pomades and gels at a manufacturing site compliant with GMP guidelines, and has the capacity of producing 20 million boxes. AT THE SERVICE OF THE NATION FROM GENERATION TO GENERATION Istanbul

Yunus Mh. Sanayii Cd. No:22 34873 Kartal ISTANBUL - TURKEY

Samsun

Bursa Ankara Izmir

+90 216 306 62 60

Malatya Antalya

Adana

www.munirsahin.com.tr

nir-QP-Vs3_1-1.pgs magenta 08.30.2012 16:32 cyan yellow black S11 FOCUS REPORTS

16

Another key development in recent years has been a noticeable increase in takeovers and partnerships. Somewhat of a departure for a market traditionally dominated by family-owned businesses, over the past five to seven years, there has been a flurry of international interest in local industry. Ali Akyıldız, general manager of IMS Health Turkey, said, “There has been increased activity in terms of mergers and acquisitions in Turkey over the past five years. Amgen took over 96 percent of Mustafa Nevzat, which further reduced the number of important local players.” One of the biggest transactions to hit the news lately, the US biotechnology giant spent some USD 700 million to gain the majority of the local generics manufacturer which was ranked 19 in value by IMS in 2011. Although a leading Turkish pharmaceutical company, Abdi Ibrahim, occupies the number one spot, international companies have picked up several local companies in the top 30. Recent acquisitions include Dr Frik and Yeni Ilaç by the Italy-based Recordati and Eczacıbas¸ ı by the Czech generic drug maker Zentiva, which is a subsidiary of Sanofi. As Turkey’s investment profile continues to attract international attention, some local players are planning today for future buyouts. For example, Serdar Sözeri, general manager of Biofarma Pharmaceuticals, said that the company is preparing an exit strategy in the next three year: “We are going to add

HCL Premedia

ocToBeR 2012

October 2012

FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

Special SponSored Section

value to the company before selling it, to reach a value higher than the average assumption of what it is worth.” Other local companies are leveraging their competitive advantages to stay ahead in an increasingly crowded market. Erhan Bas¸ , general manager of Bilim Pharmaceuticals, said, “There are 300 pharmaceutical companies operating in Turkey; Bilim is number 3, and will be number 2 in a very near future. The company’s main differentiators are its flexDr Ali Akyildiz, general manager of ibility, its ability to manage change, and IMS Health Turkey its efforts in R&D.”

CORENA’s Global Take On Business An independent international pharmaceutical wholesaler, CORENA delivers to over 200 clients across more than 50 countries and ranks among the top three Turkish exporters in their field. It’s a unique business model in a country where local companies typically focus on domestic trade. Nihal Aygün, general manager at CORENA, explained why Nihal Aygün, CEO of their model works.

S R O T S E INV

Y E K TUR RS O T S E V IN

More than 30,000 foreign companies have already invested in Turkey. How about you?

Corena

CORENA has only recently specialized in pharmaceutical distribution. How would you explain your remarkable success so far? Following the price cuts and the ensuing sharp increase in drug related orders we received, I decided to fully devote our full attention to this business area. Hence, in 2007, we successfully obtained a pharmaceutical wholesale license, in line with European standards. This was crucial for our success since we distribute to many European countries, signaling our commitment to quality excellence to them and other clients across the world. Moreover, as a wholesaler, it was practically impossible for us to grow in the domestic market. This is because the wholesale market is highly saturated with two major players controlling over 70 percent of the market and approximately 500 others competing for the remaining 30 percent. Needless to say, this further anchored our dedication to the export market and the rest is history. How do you intend to grow CORENA? I believe that Turkey has a great amount of untapped potential in the field of clinical trials. Approximately 10 per million people in Turkey have been subject to clinical trials. This is in sharp contrast to the US or Europe, where the same ratio is at about 200 per million. We are hopeful that this market will continue to develop, for the benefit of all stakeholders.

• One of the fastest growing economies in the world with robust GDP growth rates of 9.2% in 2010 and 8.5% in 2011. • 16th largest economy in the world with $1 trilllion GDP at PPP (2011, WEO IMF) • A population of 75 million with half under the age of 30. • Access to Europe, Caucasus, Central Asia, the Middle East and North Africa • The World’s 13th most attractive FDI destination in 2012 (A.T. Kearney FDI Confidence Index 2012) • Highly competitive investment incentives as well as exclusive R&D support • Around 600,000 university graduates per year

CR Turkey Ad HP ISPAT_1-1.pgs magenta cyan 08.30.2012 16:32 yellow black FOCUS REPORTS

HCL Premedia

octoBer 2012

FOCUS REPORTS S12

October 2012

17

Pharma.FocusReports.net

TURKEY

interview with:

Nihat Ergün, Turkey’s minister of Science, Industry and Technology

Within the Ministry’s wide scope of activities aimed at promoting Turkish various industries and trade, what special role does the pharmaceutical sector play in these aspirations? The world we live in today is so globalized that only the societies, which produce knowledge/information and are able to transform this knowledge into a technological product, can become powerful and enjoy welfare. Once we scrutinize this process, we see that the industrial sector has always been the locomotive of advancement. Industrial sector has a special role especially on the determination of the level of development in a country. Without a solid industrial sector, we cannot speak of growth or advancement. If a country aspires to have a sustainable, balanced and stable economy, then it is a must that the country has a powerful industrial sector. There is one important issue that we have frequently expressed: The only way to bring sustainable and long-term welfare to a country is to own a powerful industrial production. Looking from a broader perspective, we can confidently say the pioneering sector, which established a bond between Turkish economy and the world economy, is the industrial sector. Today, the share of industrial products within the overall exports is over 95%, which is a great success. As it has been the case in all the developed countries, Turkey can achieve its goals for 2023 through a remarkable increase in industrial production. As the Ministry of Science, Industry and Technology, we have significant duties to perform in the realization of 2023 Vision. There is a need for shift from laborintensive and energy-intensive production processes to information and technology-intensive production. Several strategies must be adopted in order to increase the added value. As for the role of pharmaceuticals industry; the pharmaceuticals sector requires a great deal of R&D work. This requires the employment of qualified labour force and a well-educated staff on graduate and post-graduate level. The pharmaceuticals sector is considered as a priority sector in many developing

18

October 2012

countries, since the sector paves the way for the creation of qualified products with high added-value, introduces competitive advantage in the international level, and contributes to the sciences of medicine and pharmaceutics technologically and scientifically.

Can you explain why Turkey and pharma are such a good match? Turkey has become a significant market in the world, thanks to its ever-increasing national income and young population. The growth in the domestic market has attracted the attention of investors throughout the world. One can reach 52 countries from Turkey within a three-hour flight distance. Turkey has the infrastructure that is necessary for investment or engaging in commercial activities. Turkey’s geographical position, natural beauties, cultural and historical heritage, co-existence of different religions and civilizations, democratic and legal state structure as well as its successful real sector have transformed the country into a center of attraction. As to why Turkey is attractive for the pharmaceuticals industry; the macroeconomic balance has been ensured in Turkey. The markets enjoy stability. In addition to this, the universities in Turkey have qualified academic and physical background. All of these provide a strong basis for the pharmaceuticals industry which requires dense R&D activities.

How do you see the role of the pharmaceutical and healthcare industry in fixing Turkey’s trade deficit? First of all, I believe it makes sense to have a look at the foreign trade figures related to the sector. According to TÜİK data, exports volume realized in the “Manufacturing of Basic Pharmaceutical Products and Materials” in 2002 is 263 million USD and the imports volume is 1.7 billion USD. The ratio of exports meeting the imports is only around % 9.5. If we look at the first six months of 2012, we see that exports amount to 324 million USD and imports amount to 2.1 billion USD. These figures state that the ratio of exports meeting the imports is

FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

15.4%. Figures of import and export have tremendously increased in the last ten years. The ratio of exports meeting the imports has also increased which is good news! These figures cannot be considered sufficient though. Pharmaceuticals industry is one of the industries in which we have largest deficit. Turkey aims to realize 500 billion USD of export and become one of the top ten economies in the world by 2023. However, 500 billion USD of exports in itself is not sufficient if the imports amount to 700 billion USD. Balance between imports and exports must be ensured and the problem of current deficit must be solved. Current deficits can only be solved with production and technology in the long term. By enhancing the production capacity and improving technological infrastructure, Turkey can increase the exports and substitute the imported goods with domestic production. The new incentive package has been drafted in way to address current deficit. In order to prevent the current deficit in Turkish pharmaceuticals industry and reverse the situation (turning it into a sector which creates surplus), there is need for sound and solid cooperation between the universities, public sector and private sector. The sector should focus on more R&D, promote investments and ensure that imported drugs and pharmaceuticals are produced in the country. On the other hand, we must strive to make use of domestic resources in the provision of raw materials and hence take another step towards eliminating the foreign trade deficit.

In your view, what is the outlook for Turkey’s pharmaceutical sector to become a world class player and hub that serves as a model to other developing countries and how quickly can this be realized? The turnover for the pharmaceuticals industry in Turkey is over 10 billion TL and the sector focuses on the production of generic drugs. Many countries which are advanced in the production of generic drugs allocate large amounts of financial resources to R&D activities. A new drug/pharmaceutical creates significant opportunities for its producer. Companies, which

If a country aspires to have a sustainable, balanced and stable economy, then it is a must that the country has a powerful industrial sector. FOCUS REPORTS

Current deficits can only be solved with production and technology in the long term. develop a new drug/pharmaceutical, thus enjoy new financial resources and this cycle continues like that. Within the framework of the licensing agreements made with the foreign companies, the pharmaceuticals industry in Turkey has the capability of realizing a significant amount of production and exports. There are 300 pharmaceuticals company in Turkey employing 25 thousand employees. The Turkish pharmaceuticals industry has the knowledge, infrastructure and strategic position to compete with the world, produce R&D – intensive products with high added value and hence meet the increasing demands in health sector. “Transformation in Health Program” has been implemented for the past 9 years and has proven to be a very good example for many countries. Along with its large domestic market, Turkey shall also become one of the significant destinations in health tourism. For this reason, the Department of Pharmaceuticals and Medical Devices has been established within the Ministry. The ministry has also initiated the drafting of the Road Map for the sector. Two workshops have been held so far with the representatives of the private sector. The Industrial Strategy Document and Action Plan for the Pharmaceuticals Industry will have been prepared by the end of this year. Our objective is to transform Turkey into a global player in the world in terms of pharmaceuticals industry with a competitive power at international level and receiving a larger share in the exports.

Final message from Nihat Ergün, Minister of Science, Industry and Technology, to our audience: Through this interview, I’d like to make a call for all the companies in the pharmaceuticals industry: In a time when even the most developed countries faced significant challenges, Turkey has managed to offer important opportunities to the investors thanks to its ever-growing economy and the trustworthy environment it provides. We wish that the R&D and investment incentives will be very beneficial for all the investors. October 2012

19

Pharma.FocusReports.net

TURKEY

interview with:

Turgut Tokgöz, Secretary General of IEIS - Pharmaceutical Manufacturers Association of Turkey

The line between generic and innovator companies is less and less relevant, due to the growing trend of innovators integrating generics products in their portfolio through acquisitions. How is this trend reflected in today’s IEIS membership structure, strategy, proposi-

pressure on public finances. Although the adverse effects of the problems in the world economic arena have been relatively mild for Turkey, these problems still triggered a more comprehensive effort towards containing healthcare spending and resulted in huge pressure being put on pharmaceutical prices in the country, either through direct price controls or through elevated discounts for the reimbursement category. Those have been the most important items on our agenda for the last few years.

Since the last time we met, the role of the association has also changed. We were the representative of generic businesses, as well as the local manufacturers. This has changed; we now represent the full spectrum of business models present in the market. We represent both local and multinational manufacturers; we have sole importers, companies with only generic portfolios, others with hybrid portfolios where they not only produce generics but also originator products under licensing and contract manufacturing. Previously we had around 30 members; now we represent 54 companies. The 20+ new members came as a result of diversification. The distinction between generic and innovative industries is dissolving. Research-based companies are increasingly realising the value of generics which are growing world-wide. This is a commercial reality now. Given the hardships with their pipelines and their innovative structure, they are increasingly relying on generics to get a bigger share in that business line. We cater to everyone as an association. There is a research-based association AFID and there is TISD, primarily concentrating on some local producers. We stand somewhere in the middle.

How do you see the evolution of generic penetration in the country, what would constitute a balanced ratio?

tions?

What have been for you the most striking regulatory improvements implemented in the past few years? The most important thing is that efforts to contain drug spending in the country have been elevated. Back in 2005 it was the initial phase of restructuring and healthcare reforms. Access to medicines has been increasing ever since, which put enormous

20

October 2012

The 50% volume of penetration has not been increasing. Five years ago, the value penetration was around 32%, 6% lower than it is now. This is not as a result of a price increase on generics, but rather a decline in originator prices as a result of cost-cutting measures. That is why the government was very careful to make the cost-cutting systematic. They realized that there were a lot of savings to be made in this area, and they have pursued these savings. In most of the European countries

Unfortunately, the industry has taken the easy route and has been focusing on the local market, which has been growing quite handsomely. Now that they are somewhat squeezed do­ mestically, they are very much interested in export markets. FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

We are currently making the U-turn, at the bottom of the U. regulator’s approach to generic medicines is simply a policy tool to suppress originator prices. This does not work. Unless one possesses very specific tools to get generics prescribed or dispensed, no progress will be made, as preexisting brands will simply benefit from their well established status in the market. Regulators do not possess such tools. Most of the pharma markets run on private or public social security schemes, so people are under coverage. Patients want to make sure that they make use of the premiums they have paid for their coverage to the fullest possible. Brands and brand loyalty are very important, people do not want to use generic medicines simply because they are cheaper, unless they are obliged to spend large amounts of money out-of-pocket. It is funny to see regulators suppressing generic prices and then trying to devise public campaigns to promote generics and then having them prescribed and dispensed. People do not believe in them. It is a down-grading approach and people question the efficacy and every other aspect of the medicine that is reflected in its price.

IEIS’s report, done in collaboration with the BCG, seems to argue that Turkey may have missed the opportunity to become a major global pharma player. In a country that seemed to have all the cards in hands with an existing large pharmaceutical manufacturing base, a large population and incredible success stories in the sector, how could the country “miss the train”? The country was too inward-looking. The local market was vibrant and as the pharma industry is heavily regulated, it requires a large amount of effort and capital to export products. Unfortunately, the industry has taken the easy route and has been focusing on the local market, which has been growing quite handsomely. Now that they are somewhat squeezed domestically, they are very much interested in export markets. This puts Turkey in a late-comer phase and it is not easy to gain a good market share in export markets. The train has already been moving, but it is still possible to catch it.

As a late-comer, what should be done to mitigate against the disadvantages that such a

FOCUS REPORTS

position bestows? How should Turkey position itself in relation to manufacturing giants such as China, India, even Brazil? Or should it strive to be an innovative hub, such as Singapore or South Korea? First of all, the fact that we lack vertical integration does not put us in a favorable position when it comes to tapping large markets such as the US. The simple role that generic producers are assigned from a regulatory point of view, is to devise a product that is as good as the existing product, not better. The expectation is that generic companies will make something as good as the existing product, but cheaper. As a consequence, there is little R&D in the generics side of the business. In other high tech industries late-arrivers develop products that are superior to the existing ones. There is higher innovation and product improvement. This does not happen in the pharmaceutical industry. There is a very open niche area in valueadded generics that could be exploited by simply going further and improving existing products rather than spending large amounts of money on a highly innovative structure and trying to seize a role in the innovative industry. Due to the production culture that we have, Turkey could fill this role.

Do you believe that your members are ready to take the necessary steps in terms of investment in order to address the country’s current trade deficit? That is why we have built up an alliance of pharmaceutical exporters that currently has 22 member companies. With such a platform, we are going to be present at the upcoming 2012 Bio International Convention in Boston in June. We are most probably going to be participating in the CPhI Events in October in Madrid. These are events which we were not present collectively before. Companies were being represented on an individual basis, however, a collaborative effort is now taking place. The change exists; we have to reap the yield in the coming years. If changes are not made, the situation deteriorates. We are currently making the U-turn, at the bottom of the U.

Why should companies still view Turkey as a great prospect for investment, as opposed to a great place to import? They will not be able to import as comfortably as they did before. The government has a very clearly-defined policy that anything which can be produced here should be produced here and anything that will be produced here will have some sort of preferential treatment.

October 2012

21

Pharma.FocusReports.net

TURKEY

interview with:

İlker Aycı, President of ISPAT - Investment Support and

Promotion Agency of Turkey

Currently, what are the main priorities and goals of ISPAT related to the Healthcare and Pharmaceuticals sector, and what are the overall strategies designed to achieve these objectives? As an agency we aim to attract high quality FDI to Turkey. With “high quality” we mean investments that would enable technology transfer, that would fortify and diversify this country’s exports and increase our competitiveness in global markets. High quality FDI would also help decrease the current account deficit, and create employment for an ever-increasing young and dynamic population. Turkey intends to become one of the 10 top economies of the world by 2023, which is the centennial anniversary of the republic. To accomplish this, the government has decided on a target export volume of $500bn, which currently stands at $135bn (2011). There is no doubt that the health care and pharmaceuticals sector as well as the medical devices sector are among high priority industries where we would like to see a greater growth of FDI that would bring in new technologies, help domestic products to move up in global value chains, and increase exports. On the other hand, through promoting FDI and providing support to investors ISPAT is responsible for endorsing the national goals of other government agencies and ministries including the health institutions in Turkey. In this context, the pharmaceuticals and healthcare sector is on our radar screen in view of national health policies which make sustainability of health services a key goal. ISPAT is in accord with the Pharma industry’s view that Turkey has all the qualification to be an R&D and manufacturing center for Biotechnology/Biosimilar products as well as a hub for Pharmaceutical Innovation and Development with its highly qualified workforce, attactive regulatory environment and incentive structures. In this regard, ISPAT’s promotion and support activities focus to improve pharmaceutical industry’s international competitiveness, and position the Turkish Pharma Industry, as one of the global R&D and production hubs, a

22

October 2012

net exporter and a regional management centre.

Could you provide our readers with an overview of the Turkish pharmaceutical market and its potential for growth? With its 74 million people, Turkey is the 18th largest country in the world by population size. 50% of this population is between 0 and 29 years old and the share of people between 30 and 65 years old is 42%. By 2025 it is expected that the population will increase to 85 million people and the population between the ages of 0 and 29 will decrease from 50% to 44%. With this aging population, healthcare services will become a more significant budgetary concern for Turkey in light of the fact that the government is the largest provider of healthcare and the only public provider of preventive services in Turkey. The SGK (Social Security Institution) is responsible for public pharmaceutical expenditure, which represents the vast majority of the total market. Therefore access to pharmaceuticals and provision of healthcare services are particularly crucial for the country. The Turkish pharmaceuticals market, which includes patented, generic and non-prescription drugs, has a turnover of US$10bn; while annual healthcare expenditure is around US$50bn. Turkey was ranked 6th largest market in Europe and 14th in the world by the end of 2010. To put it in perspective, the Turkish pharmaceuticals market is currently larger than the Indian market and close to the South Korean market in terms of size. With growing demand the Turkish pharmaceuticals market is projected to expand to 55bn while the healthcare market will reach 80bn by 2023 (Boston Consulting Group projection). If you consider that the number of applications to hospi-

Turkey intends to become one of the 10 top economies of the world by 2023, which is the centennial anniversary of the republic. FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

The Turkish pharmaceutical industry needs to further enhance its innovation capacities. This relates to de­veloping new processes, formulations and combined products while, in the long run, focusing on building a capability to develop new molecules. However, as the industry is still evolv­ing it does not yet have sufficient funds to spend on product development tals has increased by 207% and total healthcare expenditure has risen from 18bn to 58bn between 2002 and 2008, the importance of health policies becomes clearer. As GDP per capita (currently at $10,000) grows healthcare spending is expected to follow. Turkey has the technical capability to produce a wide range of pharmaceuticals, but relies heavily on foreign companies for expensive hi-tech treatments and vaccines, cancer drugs and hormones. Turkey is also dependent on imports for APIs (Active Pharmaceutical Ingredients). On the other hand, the Turkish pharmaceutical industry is mainly centred on the production of non-innovative drugs including antibiotics, antirheumatics and analgesics, but also provides contract manufacturing services for multinationals. Therefore, the Turkish pharmaceutical industry needs to further enhance its innovation capacities. This relates to developing new processes, formulations and combined products while, in the long run, focusing on building a capability to develop new molecules. However, as the industry is still evolving it does not yet have sufficient funds to spend on product development, although the government has launched certain incentives to encourage R&D. Currently there are approximately 300 pharmaceutical entities operating in Turkey, 53 of which are multinational drug companies. These include leading multinationals such as Pfizer, Novartis, Bayer and Roche which maintain a market share of 4-6%, each. With respect to production, there are 49 manufacturing facilities in country of which 14 are foreign owned. Multinationals with manufacturing facilities include Sanofi-Aventis, Baxter, Bayer, GSK, Novartis, Pfizer and Roche, with EastPharma being the latest to enter the market.

How would you describe Turkey’s current position with respect to pharmaceutical trade and how do you see it developing in the medium term? In 2010, Turkey imported US$4.24bn and exported around US$560mn worth of pharmaceuticals, resulting in a negative pharmaceutical trade balance of US$3.72bn; making the

FOCUS REPORTS

pharmaceutical industry responsible for 10% of the Turkish trade deficit. In terms of value, imported drugs in 2010 constituted 52% of the Turkish market. Moreover, this deficit is expected to grow in the coming years given continued import dependency and increasing domestic demand. Looking into the future, however, AIFD (The Association Research-Based Pharmaceutical Companies) has an ambitious yet realistic vision set for the Republic of Turkey’s Centennial - Vision 2023. In a little over a decade, AIFD aims to increase total R&D investment to $1.7bn from US$61.4mn in 2010. Moreover, AIFD aims to more than quadruple local pharmaceutical production to US$23.3bn with the production of high value added, innovative and high-tech drugs in Turkey. Through these initiatives, AIFD intends to export pharmaceutical products and services worth US$8.1bn – including a clinical trial services amounting to US$782mn compared to current total exports of US$587mn. Ultimately, these plans will shape Turkey as a net exporter with a pharmaceutical export surplus of more than US$1bn.

What would your recommendation be to midsized pharmaceutical and biotech companies seeking to take advantage of the opportunities here and enter the Turkish market? My first recommendation to them would be to cooperate with the variety of SME’s (small medium enterprises) available in Turkey that are also keen to form partnerships and share information with foreign companies as well. If they successfully find the appropriate business partner, they can minimize their risks by quickly gaining an insight into local expertise and business culture. This can serve as an ideal starting point for foreign entrants promoting a win-win situation for both parties. Moreover, should they require any further assistance, companies are welcome to approach us at the ISPAT. We can coordinate all and any of their activities, meeting, applications and permits with any of the governmental authorities. Similarly, our assistance will also help to shorten their transition into the Turkish market and help to protect their investments.

October 2012

23

Pharma.FocusReports.net

TURKEY

interview with:

Emin Fadillioglu - General Manager - GSK

Mr Fadıllıoğlu, after a previous position at Abbott, you were recently appointed head of GSK Turkey. How different is GSK as an organization? Both companies have their own strengths. What truly impresses me at GSK is the importance given to emerging markets. GSK has become an important player in emerging markets over the last few years thanks to a deep understanding of the stakeholders’ needs in emerging markets. Turkey’s former General Manager Yiğit Gürçay is running Middle East and Africa (MEA) as senior vice-president in the organization, and the regional headquarters have moved from Dubai to Istanbul. This reflects GSK’s full commitment to emerging markets and, especially, to Turkey.

Over the past three years, the industry has faced harsh market conditions in Turkey. Nevertheless, the business environment may also have been perceived by companies as an excellent opportunity to review their model and strategy. To what extent is today’s GSK model adapted to its environment? We need to look at this aspect of the market from two different perspectives. On one hand, when the industry signed the global budget agreement in 2009, total drug consumption was over 1.6% of the country’s Gross Domestic Product (GDP). The target was to bring it down to 1.35%. Instead, in 2012, it will be around 1.1%, which is not representative of a sustainable pharma model. As a typical pharma approach, in Turkey or anywhere else, cutting drug prices is the first step in cost containment measures. In Turkey, it is fair to say we reached the limit. Having the right budget for pharma is therefore the number one priority of the whole industry. From GSK’s perspective, we are always committed to our patients, to our stakeholders. Under any difficult condition, we

24

October 2012

make sure that patients using GSK products, the doctors prescribing GSK products, or the services we are providing to the society, won’t be impacted by these external developments. We are sensitive on that and will continue to be responsible.

What mission were you assigned when taking over GSK’s Turkish operations? As the vice-chairman of the Association or Research-Based pharmaceutical companies (AIFD), my duty is to coordinate preparations for the next three years global budget. I work with the Strategic Management Committees (SMCs) to come up with a solid proposal based on the value for every stakeholder, which we will submit to the government. At GSK, before talking about sales and growth, we first make sure that we work in alignment with the company’s core values, i.e. Respect for People, Focus on the Patient, Transparency, and Integrity. We are going to announce a strategic development process for the next five years, whereby all strategies will be based on our stakeholders. We select the stakeholders and we identify the best ways to create value for each and every stakeholder. In terms of performance, with the innovative drugs we are going to launch, along with the branded generics we may launch in the future, we will continue to be competitive in the market, and will serve a wider range of patients, while keeping high standards in our products and services.

The regional headquarters have moved from Dubai to Istanbul. This reflects GSK’s full commitment to emerging markets and, especially, to Turkey. FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

Before talking about the cost of treatment, first we need to talk about the cost of disease. We need to help shift the mindsets of the industry and the decision makers from a per pack calculation approach to pure disease management.

Our reason of being here are those external and internal stakeholders. In the future, who will be the winners? Those who manage to help patients with their diseases, within the regulatory framework. We talk too much about pricing; we should talk more about value. As an industry, we should start looking at the bigger picture, rather than focusing on units and prices. Before talking about the cost of treatment, first we need to talk about the cost of disease. We need to help shift the mindsets of the industry and the decision makers from a per pack calculation approach to pure disease management.

What were the first initiatives you took as General Manager of the Turkish operations? First, I put in place ’Project YOL’, which stands in English for Innovation Focused Leadership. Under this project, we will be studying each and every stakeholder trend in the next 5 years, assessing who the new stakeholders are, what our internal capabilities are, and how we can develop these capabilities to serve them in the best possible way. In addition, in line with the YOL initiative, we are launching a cultural workshop, which includes development plans and brainstorming sessions tackling different questions: what are the magic words that bring people together? What are the platforms we need to create to make sure we work in an environment with full harmony? I have the intention to make GSK the best workplace in the whole pharma industry by 2015.

FOCUS REPORTS

What are some of GSK’s strategic priorities in Turkey you would like to highlight? One of GSK Turkey’s top 4 priorities in the next 4 years is to have a local manufacturing partner. Secondly, even though we plan to bring 17 new molecules to Turkey in the next 4 years in many different therapeutic areas, we do not only rely on the innovative products, we are also highly interested in the branded generic business. The third priority is the development of a stakeholder-based structure. Lastly, I will pay special attention to increasing efficiency in all areas of business.

In your view, what are the main reasons to believe in Turkey’s pharma industry? Turkey has the fastest ageing population among all OECD Organisation for Economic Co-operation and Development - countries. The average life expectancy of 75 years is increasing every single year. People over 65 years of age represented 3.5% of the country’s total population from 2005 to 2010; it will be 4.2% from 2015 to 2020; it could even reach 10% in 2025. Infant mortality is dropping drastically and converges to the OECD average. The number of yearly visits to doctors per patient reached 7.7 from 1.4 over the last decade. Most chronic diseases are significantly under-diagnosed and under treated. Looking at the recently published Boston Consulting Group (BCG) analysis, drug consumption in Turkey has an extremely low volume per capita. Looking at it from every angle, Turkey is an attractive market because of the demand compound. Now, why is Turkey an attractive industry? Pharma should be a strategic partner in shaping Turkey’s future economic development. First, there is no reason why Turkey should not be an R&D hub. International R&D spending amounted to USD 144 billion in 2011; in Turkey, USD 61 million. Today, Turkey is the world’s 15th largest economy , aiming to be in the top ten by 2023; therefore, R&D spending in the country is completely disproportionate. Turkey should also be a hub for distribution. There are many local manufacturing facilities in Turkey, and the country’s total export in pharma today is only USD 600m, which makes it the 36th exporting country of pharmaceutical products in the world, which is also disproportionate considering the power of the economy. Thirdly, Turkey has all the ingredients to become a centre of management for companies’ regional operations, like GSK has already done. Turkey has an excellent talent profile. The country has technology, people, a large demand, and a significant geographic advantage, located in the middle of Europe and the Middle East. What else do you need?

October 2012

25

Pharma.FocusReports.net

TURKEY

interview with:

Güldem Berkman, General Manager of Novartis & ChaiRman of AIFD

Focus Reports are of course about the industry but also about the people making it happen. So before anything would you like to introduce yourself to our readers and expose the career path that has led you to take the helm of Turkey’s leader in the pharmaceutical market? First of all, I am a chemical engineer. I have started my professional life in 1991, and for the first ten years of my career, I have worked in the Fast Moving Consumer Goods (FMCG) industry, which is a bit different from pharma and in this sense offered me a diverse background. From 2001 onwards, I have been working for Novartis. I have had many different positions within the group, mainly in the commercial teams, in Marketing and Sales. In 2007, I was appointed at the head of the Hungarian affiliate of Novartis as the General Manager, position that I have occupied only for a year. Lastly, from the end of 2007 until today, I have been leading Novartis’s Turkey operations. Furthermore, in the last elections of AIFD, the Association of Research Based Pharmaceutical Companies in Turkey, I became the chairman, which I will be for the next two years. I also have other responsibilities in different important associations such as YASED, the International Investors Association, and TUSIAD, the Turkish Industrialists and Businessmen Association. The Turkish pharma market does not seem to deliver its promises especially hit by tough governmental measures over the past few years. In your eyes is there a risk that Turkey loses its attraction shine as an industrial investment destination if the government continues tightening its grip on the industry? In Turkey, there are already very limited investments in the pharmaceutical sector. By investment, I mean financing full research and development (R&D) activities. R&D investments made by international pharmaceutical companies are approximately USD 40m per year in Turkey versus USD 120b invested globally every year. Moreover, the trade balance of the pharmaceutical sector in Turkey is critical: whereas exports represent USD 0.5b in 2011, imports exceeded USD 5b.

26

October 2012

It is clear that Turkey is not getting the level of investment that the country deserves. There are a few fundamental issues that explain this. In order to attract more investment, you first need to be more competitive in other parts of the world, and you need to create a more secure environment. As AIFD, we are planning to work as a partner with our government and align on the government’s vision for 2023, 100th anniversary of the Turkish republic. We believe that the pharmaceutical industry can be a very important contributor to this vision.

Can you give our readers an overview of the importance that Turkey has in terms of Novartis industrial and exporting strategy, as Novartis has become the country’s largest exporter of pharmaceutical products, exporting to over 70 countries around the world? We have currently 4 production facilities in Turkey, including 3 facilities for finished products and 1 for active substances. Last year, exports generated around USD 125m, which is one fourth of the country’s total pharmaceutical export revenue. Novartis has been present and active in Turkey for the last 60 years. The company is looking forward to investing more, a strategy that I personally hold as a mission. Unfortunately, the price fluctuations between 2010 and 2012 have put a limit to my efforts. I am looking forward for the situation to improve in the following years.

It is clear that Turkey is not getting the level of investment that the country deserves. FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

When you compare Turkey with the European markets, prima­ry care therapies are dominating the market much more signifi­cantly. Nevertheless, in the next five years, I am convinced we will witness a shift toward more specialty categories, because the needs of the population are changing. Looking at fastest growing therapeutic areas, Turkey seems to present some aspects of emerging markets and some aspects of more mature markets, as specialty care is the area with the most potential, especially CV, Diabetes and Oncology, and primary care is still a growing area. How tailored is Novartis’s product portfolio to the medical needs of the Turkish population? When you compare Turkey with the European markets, primary care therapies are dominating the market much more significantly. Nevertheless, in the next five years, I am convinced we will witness a shift toward more specialty categories, because the needs of the population are changing. Novartis has a highly diversified portfolio, allowing us to be dominant both in primary care and in specialty care. Novartis has therefore a unique positioning and footprint in the Turkish market. We aim at maintaining our success in both categories in the future thanks to our portfolio.

In a market with increasing complexity how important it is to be creative and offer different solutions at a management level and how useful is your experience in a non pharma company to try and think differently? The largest difference that I see between the pharmaceutical sector and the FMCG sector is that that the pharmaceutical sector is much more regulated and controlled by the government. The system is based on a few fundamentals, whereby the government defines the prices, limits the promotions, and controls the consumption. In the future, this system should be based more on the outcomes of their decisions - not only the prices, but also what will be the usage of each product, and the importance of each product. Having said that, I believe that the government should definitely continue to intervene in the pharmaceutical sector. Otherwise, the commercial rules are the same across all sec-

FOCUS REPORTS

tors: you need to define your target group, the market needs, create the best products that will respond to those needs, and then explain to all stakeholders why you have the solution for their problem. I am using the same kind of commercial instincts and reflexes in FMCG and in pharma. Only my target group is different.

In addition to leading the largest pharmaceutical company in Turkey, you are currently both the president of the AIFD and executive board member at YASED, and an active TUSIAD member. This surely comes at a very important cost when it comes to workload and agenda commitments. What advice do you give to younger professionals on how to manage a heavy and multitasking agenda? First of all, you should have a big will to win. I feel the need to take the lead in order to explain our sincere case to the government, because the situation is critical. I accepted all these responsibilities because I thought this would put me in the best position possible to address the industry’s concerns to the government. For that, you also need to believe in what you are doing . In the execution, you need to be very organized. This could sound classical, but I am even organizing my private life like a business case. Always, you need to plan your priorities and timeframes, and etc. Otherwise, with such a heavy agenda, you can get lost very easily.

What in your view is the meaning of success? The definition of success is indeed multiple. My personal definition of success is one’s ability to make a difference. This applies both in my private life and professional life. For me, being successful is creating value in whatever you are doing. I think it is important that anyone finds its own definition of success in life and then go after it!

October 2012

27

Pharma.FocusReports.net

TURKEY

interview with:

Matthieu Accolas, General Manager of Servier Turkey

As a manager, what specific skills developed during your tenure in Poland are you applying in this market? In both countries, you have to adapt fast to the environment. Despite numerous similarities, the markets are different in the sense that Turkey presents much more a Western profile, especially looking at the percentage of drug reimbursement. In both cases, we are talking about very positive and fast growing economies and an increased access to healthcare, which makes those countries highly interesting and under permanent development. On the other hand, in Turkey just like in Poland, we face the same difficulties for patients’ access to innovative drugs on the market. Turks are eager to adapt in a fast changing environment. Leadership and creativity are key skills for a manager to succeed in Turkey.

Can Turkey afford to have a westernized health model in your opinion? There is a natural growth of drug consumption, but the health budget remains stable. Drug prices have been dramatically decreased and are now among the lowest in the world. At the same time, Turkish patients have access to innovative drugs many years after other European countries and with more restrictions. The pharmaceutical industry is struggling now, and I believe that Turkey has to invest more for the health of the population to adjust to western countries and adapt the healthcare budget accordingly.

Servier Turkey was the third world leading subsidiary in 2009. Three years later, to what extent has the company been affected by the crisis, and what have been the main strategies you have put in place to maintain growth? As with many companies we haven’t been able to grow our turnover since 3 years.

28

October 2012

This difficult environment was in fact an opportunity for us to adapt and review our own model. We made many internal changes over this time period, such as, resources and organization optimization in order to be more effective in the market place. Overall, we have been able to strengthen our position in cardiology and diabetology. We have a broad product portfolio for the treatment of coronary artery disease, heart failure and hypertension - in 2011-2012 Servier Turkey has successfully launched a new fixed dose combination in hypertension.

When a market shrinks like it has been the case for Turkey last year, to what extent is it important to focus on the core drugs of a company’s portfolio versus diversifying it? In a situation like this, it is critical to focus on the drugs which are sustainable. At the same time, we recently put together a team in order to identify the best and most effective ways to adapt to the needs of the patients and the doctors , to ultimately bring new answers and solutions to the market. In this context, we have increased our partnership with endocrinologists, internists and cardiologists. Each year we are rewarding the Turkish cardiologists for their publications in an international scientific journal. The first award was given in 2011, and we are proud to contribute and support science and education of the Turkish doctors. We have also adapted to the market conditions in the sense that we have significantly developed our investment in R&D in Turkey over the last years. We believe that integrating Turkish doctors within international studies is beneficial for them to be globally recognized.

This difficult environment was in fact an opportunity for us to adapt and review our own model. FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

In a situation like this, it is critical to focus on the drugs which are sustainable. At the same time, we recently put together a team in order to identify the best and most effective ways to adapt to the needs of the patients and the doctors, to ulti­mately bring new answers and solutions to the market. How much R&D is done in Turkey and what are the most important partnerships for Servier in this area? Servier is a foundation investing 25% of the turnover for research activities. As the company is not listed on the Stock Exchange, there is no pressure from the shareholders. This eventually gives Servier a unique advantage to invest more in research. Overall Servier is investing 7 million Turkish Liras each year in Turkey including research. We work with numerous Turkish scientific societies and universities. Depending on which research program we want to run and in which specific field, we look for the most adapted partnership. For example, we have recently decided to develop a new drug for the treatment of the Behcet disease, an orphan disease that causes chronic inflammation of the blood vessels or vasculitis among other complications that result in damage to various organs. This disease was discovered by a Turkish doctor, Dr Hulusi Behcet. Servier group has decided to give to Turkey the world leading role as the main international coordinator is Turkish: Prof. Dr. Ahmet Gul.

How challenging is it to retain the brightest minds within the company? In the changing environment, the way Servier has been able to adapt fast and provide solutions has increased our reputation in Turkey. Servier is known for the quality and the loyalty of its employees. This applies all over the world, and all the more in Turkey, where 56% of our employees have over ten years of service. Besides, 93% of our employees are University gradu-

FOCUS REPORTS

ates, mainly from scientific disciplines. Therefore we have employees with a very high level of education. Our people are keen to work in a foundation for research, driven by science, providing career opportunities and with good working conditions.

What is the company’s scope of activities with regard to production in Turkey? For the past 26 years we have established a strong production partnership with a leading local pharmaceutical company. This cooperation is answering to our highest international production quality standards. We are producing more than 6 million boxes each year in Turkey.

What role will play Servier in shaping Turkey’s future pharmaceutical and healthcare market? We have been working in Turkey for 34 years and established our own subsidiary 26 years ago. Turkey is a very important country for the group. We are continuously working to bring new drugs to the patients and to the doctors. We communicate in a highly ethical and scientific manner. We have succeeded to increase our performance, keeping our high levels of standards. We are proud of these achievements. Last year, more than 3 million patients have benefited from our drugs. 5 out of our 16 products are in a leading position in their respective indications. We have increased our investments in Turkey over the past years, mainly in research. I see a positive future for Servier in Turkey, given the market potential, the quality of our drugs, and of our staff. I am convinced that Turkey will play a major role in the global pharmaceutical market, and will find a way to adapt to its own needs in order to give to all patients a better access to innovative drugs.

Recent change in position: François Vilette (right) is the new general manager of Servier Turkey’

October 2012

29

Pharma.FocusReports.net

TURKEY

interview with:

Fatih Acar, President of SGK - Social Security Institution

Would you like to compare the Turkish public health budget with its European counterparts? Turkey, classified as middle income country by World Bank, is among the countries which spent below the OECD average on health. However in recent years total health expenditures and its share in GDP changed significantly. From the aspect of development, the quality of services you provide to your citizens is as much as important as how much you spent on health. In the recent years this is the new topic on our agenda. Till then comparisons are based on basic indicators such as GDP ratios. To evaluate the effect of the reform we should discuss the ratios pre and after; Regarding the last figures there is a big difference between years of 2000 and 2007. However we are also aware of the fact that our share is still far below the OECD average. On the other hand health expenditure per capita in OECD countries in 2009 is $3223, whereas in our country it is $902. At this point, the share of the population over 65 years old should also be considered in order to evaluate the health

expenditures. According to Eurostat figures, the ratio is 7% for Turkey, whereas it is above 15% in most of the European countries. Looking at the composition of financing, as the mix of the sources has many implications for health systems, particularly in terms of access, equity, efficiency and financial sustainability, we can say that our financing system mainly depends on public like most OECD countries. As you know on one hand, public shares of the total health expenditure provide a tool to evaluate how active the governments are in the financing of basic public health care services, protecting the poor and facilitating risk pooling. On the other hand, private expenditures, specifically out-of-pocket payments, are also as important as they are the key measures of the potential inequities in health care financing.

The newly formed SSI has generated more prescriptions and offered a greater access to drugs to the population, which has eventually increased its drug consumption and visits to doctors. How challenging is it for the institute to find the right balance between ensuring the overall well being of the Turkish population and controlling the healthcare budget?

While the Universal Health Insurance System extends of the coverage to include the whole population and expands the spectrum of health-care services payable, at the same time it enhances the quality standards of the healthcare services and ensures the effective use of resources as well. 30

October 2012

FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

As public management, we don’t desire to continue controlling the drug expenditures with public discount increase and reduces in price While the Universal Health Insurance System extends of the coverage to include the whole population and expands the spectrum of health-care services payable, at the same time it enhances the quality standards of the health-care services and ensures the effective use of resources as well. SSI procures health-care services from MoH hospitals, university hospitals and private health-care service providers including independent pharmacies by contracting with them. In this period several measures have been taken in order to control the health care budget at any field of health system. Since January 2009, our institution and the MoH has concluded a Global Budget Agreement concerning the total health care services supplied from MoH Hospitals. This budget based on a lump sum payment depending on the previous years’ visit volumes, health investments and other indicators. In addition, the pharmaceutical sector in 2009 have undertaken to abide a global budget agreement starting from 2010.

Over 85% of the total pharmaceutical consumption is being paid by the SSI. What is your assessment of the benefits of this model to the population and its sustainability? In the last years, our citizens’ access to health care services and especially to the medicines had increased to the great extent with the reform of health and social security. During this period, we had implemented some decisions with taking the opinion of the sector’ representatives for the purpose of maintaining the budgetary displacing. As public management,

FOCUS REPORTS

we don’t desire to continue controlling the drug expenditures with public discount increase and reduces in price. We intend to create a stronger and more sustainable industry. I think, this is very significant for the future of the sector. Looking at the last ten years, we can say that the spectrum of the social security has been enlarged and SSI became an institution serving 74 million citizens. As we all know, the number of the hospitals and doctors have increased significantly in the last 10 years, with this it is seen that the number of visits also increased. The increase of the drug expenditures is continuing and it is predicted that the market of the drugs in Turkey will expand more. In the next term, we will take into consideration the growth in medium-term financial plan and we will also act in a manner that gives required share to the sector due to the growth. Also stated in the reports of IMS, one of the biggest monitoring company for the drug sale, we predict that Turkey’s drug market will enlarge more rapidly between 2010-2015 compared to the other countries of the world and the average of the growth will be 8.1% in five-years period. Recently, the drug sector grows 2-4% in all the world, while it enlarged more in Turkey. We express that this growth slowed down slightly after global budget agreement in 2009. If we look at the proportion of public drug expenditures to the GDP, we can say that though there was not great increase in GDP, the drug expenditures increased in great proportion. The increase was 1.41% in 2004, 1.34% in 2005, 1.33% in 2006, 1.32% in 2007, 1.36% in 2008 and 1.69% in 2009. This drastic increase was resulted in global budget period. Looking at these statistics, it is clear that the proportion of public drug expenditures to the GDP is not reducing, in contrast it is increasing slightly. However with the result of the decisions taken in 2009 covering the 2010-2012 periods, there had been partial declines in the share of drug expenditures in GDP. In this framework, lastly, we believe that the institutions investing on R&D have to be strengthened and supported. The allocated amount for the investment is TRY 35 million and we target to increase this amount up to 1.5 billion TRY. Our country is growing, developing. The drug sector, we perceive as one of the strategic sector, will take its own share from this growth. All that matters, this has to be provided properly. We are on behalf of the proponents of all instructions that will contribute to the development of the drug sector and will invest to the sector. “As public management, we don’t desire to continue controlling the drug expenditures with public discount increase and reduces in price. We intend to create a stronger and more sustainable industry.”

October 2012

31

Pharma.FocusReports.net

TURKEY

interview with:

Cüneyt Balıkçıoğlu, General Manager of Ferring Turkey

The company entered the Turkish market in 2005, and made important product launches in 2008. Can you come back on the positive and negative experiences for you during this time? I believe that Ferring’s start in 2005 was at a very opportune time, ahead of the looming global financial crisis. Then, the industry was undergoing a positive structural and regulatory shift; with the on-going discussions on the reference pricing system, the patent laws as well as the universal healthcare system during that time period. The industry as a whole was supporting and looking forward to these new systems that were being developed along with the authorities. In fact, before Ferring’s entry to the Turkish market, we already had some products available here through a local company. They were responsible for the marketing and distribution of some of our products; however we gradually took over these products and operations by 2008. Overall, it was a good but slow start for Ferring due to the bureau-

cratic hurdles that we had to overcome in taking over these products. At the time this was difficult to achieve, however now it is even more so. In all irony, I was the first and only employee in the Turkish branch of Ferring, starting the 1st of April; April fool’s day. Looking back it was a challenging but enjoyable beginning for me because I like to think that in a way, I helped built this company having even been responsible for purchasing the door knobs for our offices. As I mentioned, those times were not that difficult and we were on the right track, until the global crisis emerged in 2008. That was when the challenging times started with new healthcare structural changes came into play including the new institutional discount systems and the resulting price pressures, among others. Simply put, this had an adverse effect on our growth ambitions and potential. We were not only negatively affected by the price discounts, but also by the fixed exchange rate that hasn’t been adjusted for the last couple of years and reference pricing issues. Prior to these developments, our parent company was putting a lot of emphasis and positive outlooks on our Turkish branch as a result of the growth we had achieved since

I believe that Ferring’s start in 2005 was at a very opportune time, ahead of the looming global financial crisis. Then, the industry was undergoing a positive structural and regulatory shift; with the on-going discussions on the reference pricing system, the patent laws as well as the universal healthcare system during that time period. 32

October 2012

FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

Turkey has a young, large and ageing population, therefore it is a very attractive market for pharmaceutical companies, which have made it a highly competitive market. What are Ferring’s main strengths to stand out and grow its market share?

The three largest and best performing product areas include urology, female healthcare (mainly infertility) and gastroenterology.

Although there is no accurate measure, we are estimating that the population is growing by almost a million each year. In addition, the population is also becoming more elderly. Therefore, Turkey does represent a growing market with a large young as well as aging population and this does represent an opportunity for us when you consider the changes in the healthcare structure. In line with our company’s strategy, I think it is a clever strategy to be in the niche areas that we are focused on. This is because in the alternative segments, such as antibiotics or cardiovascular, there is a large degree of competitiveness and there is no miracle compound in the near future, making the sustainability of the companies from a price perspective very challenging. That is why I believe that Ferring’s niche strategy is the correct one and we will extend and apply this policy in the Turkish market as well.

You have been General Manager of Ferring Turkey for over 7 years. What explains your loyalty to this company? 2005. However, with the impact of the above mentioned developments, we were not able to live up to those expectations. In my opinion, I think that we could have achieved at least three times the success and contribution that we have now realized, had these changes not taken place. I find this both disappointing and frustrating.

How tailored is Ferring’s portfolio to the Turkish population and market needs, and what have been the most performing products here? The three largest and best performing product areas include urology, female healthcare (mainly infertility) and gastroenterology. In fact, in our infertility line, we are offering one of the best and cost-effective alternatives which make those products that we offer highly recommended and pursued. In addition, we are enthusiastic about new products such as Firmagon. It’s a new medication indicated for the treatment of advanced hormone-dependent prostate cancer, which we expect to allow us to be more active in the UroOncology field.

FOCUS REPORTS

What most attracts me to this company is probably Ferring’s corporate culture. That is, they provide me with a certain degree of freedom in my decision making process. I also enjoy the excitement of growth as well as the interrelationships among people within the company. Also, being a part of the Middle Eastern group, we have formed a very close business as well as personal relationship among each other and perhaps that too adds to my loyalty. This may seem somewhat emotional, but I think that some level of this is required to be devoted for so long.

What are your ambitions to grow Ferring Turkey in the next few years? Ferring as a whole has set itself a vision for 2019 where we intend to double our sales and double our profitability. Therefore, As Ferring Turkey, I would like to consider the circumstances such as structural changes and additional institutional discounts in order to be able to be in line with the 2019 vision. As an organization, Ferring has invested and believed in us and I want to be able to give that back.

October 2012

33

Pharma.FocusReports.net

TURKEY

Exclusive interviews More interviews available on www.pharma.focusreports.net:

Alp Sevindik, Secretary General and COO of AIFD - Research Based Pharmaceutical Companies Association

Elçin Ergün, Regional Vice President and Head of Intercontinental Region of Merck Serono

34

October 2012

Güldem Berkman, General Manager of Novartis & Chaiman of AIFD

Turgut Tokgöz, Secretary General of IEIS - Pharmaceutical Manufacturers Association of Turkey

Mehmet Yusuf, Managing Director of Altis Medical Research Turkey

Fatih Acar, President of SGK

Dr. Sebnem Avsar Tuna, General Manager of Novo Nordisk Turkey

Ilker Aycı, President of ISPAT Investment Support and Promotion Agency of Turkey

FOCUS REPORTS

Pharma.FocusReports.net

TURKEY

Marco Caligiuri - General Manager of Celgene Turkey

Matthieu Accolas, General Manager of Servier Turkey

Ayse Cetinel, Managing Director, Janssen Turkey

Nihal Aygün, CEO of Corena

Dr Ali Akyildiz, General Manager of IMS Health Turkey

Nihat Ergün, Turkey’s minister of Science, Industry and Technology

Ayse Çetinel Sapmaz, Managing Director of Janssen Turkey

For exclusive ITVs and more insights, log on to pharma.focusreports.net FOCUS REPORTS

October 2012

35

Pharma.FocusReports.net

TURKEY

PAst reports

36

October 2012

FOCUS REPORTS

For exclusive ITVs and more insights, log on to pharma.focusreports.net