High ASPIRATIONS

Government-backed incentives are helping Alvimedica to invest in R&D and make Turkey a hub for the global medical devices market.

What impact did the annual adjustment of pharmaceutical prices have on Nobel İlaç’s operations as well as the broader pharmaceutical industry?

This is not the first time that we have been through the annual adjustment. Since price increases are typically announced some time before the effective date, some companies choose to deliver products at the previous price as a sales argument. It is no different than common surplus or rebate practices, and it creates a demand from warehouses and pharmacies. As a company, we are not prone to compromise in sales and thus do not have any special implementations to apply in such periods. We do not experience problems in our product delivery either. Our supply system obliges us to make planning months in advance, and since we do not keep a large stock at the consumption channel, we cannot be open to extraordinary demands.

More broadly, how does the Turkish pharmaceutical regulatory structure support the healthcare sector, and what changes could be made to improve it?

Turkey is a global example in terms of drug legislation, production ability, and capacity as well as access to drugs. We have a sufficient number of factories and R&D facilities in GMP standards that can readily satisfy the national requirements. About 150,000 physicians and 25,000 pharmacies produce about 500 million prescriptions annually and we convey 2.5 billion boxes of drugs to our people. While the system is sound, what is missing on the regulatory side is national regulation of biosimilar products. Such regulation will improve the market for pharmaceutical companies. What is in practice at the moment is mostly from Europe and the US, and these regulations make it difficult for Turkish pharmaceutical companies to enter the market. Similar countries with success in biosimilars such as Russia, South Korea, India, and China have been operating with their own regulatory systems. Turkey can experience the same success with the implementation of a similar system.

How does the increasing strain on the health insurance system impact the industry and Nobel İlaç’s operations?

Currently, save for a limited number of exceptions, the entire Turkish population is covered by health insurance. This is a benefit we should be proud of, as even some developed countries are unable to provide this. However, such an inclusive system also brings about financing problems. In the past 15 years, along with the growth of the population and average age, the improvements in access to health services and medication have unexpectedly increased the costs. In the past 15 years, the per capita number of referrals to a health center has increased four-fold. Currently, each of us visit a physician more than eight times, have six prescriptions issued, and consume 30 boxes of medication a year on average. About 80% of pharmaceutical consumption is financed by the public budget. We are proud of the level of services we have achieved as a country. However, the financial resources needed to enable this system are scarce. Drug prices have been in constant decline despite inflation and increasing foreign exchange rates, and thus the main agenda for companies in the sector has been to survive. Nobel enjoys a greater feeling of security due to the fact that our activities have not been limited to our efficient domestic operations; however, but we have also internationally expanded and become a net exporter. However, currently, we fear the pharmaceutical supply in Turkey will no longer be sustainable, and our culture of R&D and production will be damaged.

What investments has Nobel İlaç made—in part through the 2023 vision—in the area of biosimilar drugs?

One of the main reasons for the funding problem is that we are still considerably foreign-dependent in the field of drugs. Each year, the pharma industry incurs a foreign trade deficit of about USD4 billion. That is why reducing foreign dependency on drugs was introduced as a target in state programs such as the 10th Development Plan and the 2023 vision document to support the domestic development and