For­eign in­vest­ments will be a ‘shot in the arm’

Dünya Executive - - BUSINESS -

The in­cen­tives on the ‘in­di­g­e­niza­tion of the phar­ma­ceu­ti­cal in­dus­try’ adopted by the Min­istry of Health in 2016 have started to bring re­sults. Rac­ing for in­vest­ing in Turkey, some global pharma gi­ants are now di­rectly es­tab­lish­ing their own fa­cil­i­ties while oth­ers are sign­ing partnershi­p agree­ments with lo­cal com­pa­nies.

The Swiss phar­ma­ceu­ti­cal com­pany No­var­tis, one of the world’s largest, is pre­par­ing to in­tro­duce two new medicines to be pro­duced in its Kurtkoy fa­cil­i­ties in Au­gust. The U.S. Gilead Sciences signed a lo­cal pro­duc­tion agree­ment with Phar­ma­c­tive Phar­ma­ceu­ti­cals and has de­cided to pro­duce life-sav­ing strate­gic drugs in the ar­eas of hep­ati­tis and HIV in Turkey. Iran’s

Cin­na­gen, one of the big­gest biotech drug pro­duc­ers of the MENA re­gion, in­vested in a $100 mil­lion fac­tory in Cerkezkoy in June and, to­gether with its Turk­ish part­ner, pushed the but­ton for a green­field in­vest­ment. French Sanofi is sign­ing a con­tract with its Turk­ish part­ner, Birgi Me­far, for an­tibi­otic pro­duc­tion in Turkey.

An­other im­por­tant rea­son for the in­crease of for­eign in­vest­ment in this area is that the pric­ing of phar­ma­ceu­ti­cals in Turkey is made by the re­source price sys­tem. De­spite the rapid in­crease in the ex­change rate, the gov­ern­ment has de­ter­mined the euro rate for phar­ma­ceu­ti­cals for the year 2019 as TRY 3.4037. This sig­nif­i­cantly re­duces the prof­itabil­ity of for­eign firms and in­creases their costs. Com­pa­nies have thus shifted their pro­duc­tion to Turkey to over­come this prob­lem.

Turgut Tok­goz, Sec­re­tary Gen­eral of the Phar­ma­ceu­ti­cal In­dus­try Em­ploy­ers’ As­so­ci­a­tion, stressed that one of the im­por­tant rea­sons that phar­ma­ceu­ti­cal com­pa­nies ac­cel­er­ated their in­vest­ments for pro­duc­tion in Turkey was the ‘Tran­si­tion from Im­ports to Pro­duc­tion in Phar­ma­ceu­ti­cal In­dus­try” scheme of the Min­istry of Health. “The main pur­pose of the scheme is to in­crease the share of do­mes­tic pro­duc­tion in the phar­ma­ceu­ti­cal mar­ket from 40 per­cent to 60 per­cent and there­fore in­crease Turkey’s com­pet­i­tive power in the in­dus­try. Be­com­ing a global man­u­fac­tur­ing cen­ter and to guar­an­tee pa­tients ac­cess to the phar­ma­ceu­ti­cals is also a tar­get. We strongly sup­port the in­di­g­e­niza­tion process, which is car­ried out with great sen­si­tiv­ity at ev­ery stage.”

Bil­lions of dol­lars of im­ports avoided

The Min­istry of Health had an­nounced in 2017 that in­ter­na­tional in­vest­ment in phar­ma­ceu­ti­cals and med­i­cal de­vices will be in­creased with pub­lic pro­cure­ment and that TRY 5 bil­lion worth of in­vest­ment is tar­geted to be drawn to Turkey. The Min­istry plans to pro­duce TRY 6.1 mil­lion worth of phar­ma­ceu­ti­cals an­nu­ally in Turkey. Mean­while, the gov­ern­ment aims to take steps on do­mes­tic patented phar­ma­ceu­ti­cals as well as for­eign patented pro­duc­tion in Turkey.

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