Foreign investments will be a ‘shot in the arm’
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.