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7/26/2019 Pharmaceutical.industry
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Investment Support and Promotion Agency of Turkey
ThePharmaceutical
Industry inTurkey
1
March 2014
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Investment Support and Promotion Agency of Turkey 2
Disclaimer
Republic of Turkey Prime Ministry Investment Support and Promotion Agency (ISPAT) submits the informationprovided by third parties in good faith. ISPAT has no obligation to check and examine this information and takes noresponsibility for any misstatement or false declaration. ISPAT does not guarantee the accuracy, currency,reliability, correctness or legality of any information provided by third parties. ISPAT accepts no responsibility forthe content of any information, news or article in the document and cannot be considered as approving any opiniondeclared by third parties. ISPAT explicitly states that; it is not liable for any loss, negligence, tort or other damagescaused by actions and agreements based on the information provided by third parties.
Deloitte accepts no liability to any party who is shown or gains access to this document. The opinions expressed inthis report are based on Deloitte Consultingsjudgment and analysis of key factors. However, the actual operationand results of the analyzed sector may differ from those projected herein. Deloitte does not warrant that actualresults will be the same as the projected results. Neither Deloitte nor any individuals signing or associated with thisreport shall be required by reason of this report to give further consultation, to provide testimony or appear incourt or other legal proceedings, unless specific arrangements thereof have been made. All opinions and estimatesincluded in this report constitute our judgment as of this date and are subject to change without notice and maybecome outdated.
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Investment Support and Promotion Agency of Turkey 3
Glossary of Terms
Acronym Definition
AIFD Association of Research-BasedPharmaceutical Companies
BaKur Former Social Security Organization forArtisans and the Self-Employed (BecameSGK)
BMI Business Monitor InternationalBRIC Brazil, Russia, India and ChinaCAGR Compound Annual Growth RateCBRT The Central Bank of the Republic of TurkeyCEE Central and Eastern EuropeCEO Chief Executive Officer
CIS Commonwealth of Independent StatesCTD Common Technical DocumentEFPIA European Federation of Pharmaceutical
Industries and AssociationsEIU Economist Intelligence UnitES Civil Service Retirement FundEU European UnionEUR EuroFDI Foreign Direct InvestmentGCP Good Clinical PracticesGDP Gross Domestic ProductGMP Good Manufacturing PracticesGPvP/GVP Good Pharmacovigilance PracticesEGM General Directorate of Pharmaceuticals and
PharmacyES Pharmaceutical Manufacturers Association of
Turkey
Acronym Definition
IMF International Monetary FundKOSGEB Small and Medium Enterprises Development
OrganizationKPI Key Performance IndicatorMEA Middle East and AfricaMNC Multinational Company
MoH Turkeys Ministry of HealthMSI Market Surveillance and InspectionOECD Organization for Economic Co-operation and
DevelopmentOHSAD Private Hospitals and Health Institutions
AssociationOIZ Organized Industrial ZoneOTC Over-the-CounterPMI Purchasing Managers IndexProd ProductPTTS Pharmaceutical Track and Trace SystemQ QuarterR&D Research & DevelopmentRef Reference
RRR Risk/Reward RatingSADER The Healthcare Products Manufacturers &Representatives Association
SES Health Industry Employers Association ofTurkey
SGK Social Security InstitutionSME Small and Medium EnterprisesSPO State Planning Organization
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Investment Support and Promotion Agency of Turkey 4
Glossary of Terms
Acronym Definition
SPW Sale Price to WholesalerSSI Social Security Institute
SSK Former Social Insurance Organization(Became SGK)
TPA Turkish Pharmacists' AssociationTEYDEB The Scientific and Technological Research
Council of TurkeyTM Turkish Exporters AssemblyTTUBB The Turkish Pharmaceutical and Medical
Device National Information Data BankTL Turkish Lira
TRNC Turkish Republic of Northern CyprusTTB Turkish Medical AssociationTBTAK Scientific and Technological Research Council
of TurkeyTMDEF Medical Device Manufacturers and Suppliers
AssociationTurkStat Turkish Statistical InstituteTUSDER Healthcare Association of TurkeyUK United KingdomUSA United States of America
USD United States DollarVAT Value Added TaxWHO World Health Organization
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Investment Support and Promotion Agency of Turkey 5
Table of Contents
Executive Summary 6
I. General Overview of the Turkish Economy and Pharmaceutical Sector 7-20
A. Macroeconomic Overview of Turkey and the Sector 8-9
B. Global Pharmaceutical Sector 10
C. History of the Pharmaceutical Sector in Turkey 11
D. Overview of the Pharmaceutical Sector in Turkey 12-17
E. FDI in Turkey 18-20
II. A Detailed Look at the Pharmaceutical Sector 21-63
A. Overview of the Pharmaceutical Value Chain 22
B. Policy and Regulatory Landscape 23-33
C. Discovery and R&D, Raw Material Production, Pharmaceutical Manufacturing, Wholesale and Retail 34-59
D. Major Stakeholders in the Pharmaceutical Sector 60-62
E. Special Focus: Biological Products, Oncological Drugs and Blood Products 63
III. Competitiveness of Turkey 64-73
A. Labor Force 65-66
B. Population Demographics 67
C. Geographical Advantage 68
D. Incentive Plan 69-70
E. Ease Doing Business 71
F. Special Focus on Free Healthcare Zones 72-73
IV. Strategic Plans and Targets for the Pharmaceutical Sector 74-79
A. Strategic Plans and Targets from the Ministry of Health and the Ministry of Science, Technology andIndustry
75-76
B. The Vision for 2023 77-79
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Turkey has demonstrated robust macroeconomicgrowth in recent years thanks to the
governments ambitious growth program andthis growth will be sustained over the next 5years. According to OECD forecasts, real GDPgrowth is projected to increase about 4% in2014 and 2015, while the EIU expects an annualaverage growth rate in real GDP to be about 5%in the short term.
In 2012, Turkeys pharmaceutical market wasthe 6thlargest market in Europe and 16thlargestin the world in terms of sales. Pharmaceuticalsales reached a stunning USD 12.5 billion, whichmeans a CAGR of nearly 10% between 2003 and2012.
Domestic and international investors areramping up their new investments in thepharmaceutical sector to take advantage ofTurkeys attractive market, where thehealthcare industry and the pharmaceuticalsector grew by 5.8% and 8.9%, respectively,from 2012 to 2013. While the growth in realGDP was 3.5% for the same period.
According to BMI's Risk/Reward Ratings (RRRs)which provides a globally comparative andnumerically based assessment of a market'sattractiveness, Turkey ranks 5th out of the 20emerging markets in CIS and CEE with a scoreof 58.
Turkey has one of the largest and youngest laborpools in Europe with more than 65% of the
population aged between 24 and 54. The strengthof Turkeys labor force is reflected in thepharmaceutical sector. Turkey continues to putemphasis on education to improve the quality ofthe workforce. In 2011-2012 academic year, therewere more than 41,000 students that graduatedfrom vocational training schools and universitiesfrom fields that were related to the pharmaceuticalsector.
Turkeys newly designed investment incentiveprogram divides Turkey into six separate regions.It supports investors in the industry by providingvarying tax reductions of between 15-65%depending on investment region and scale as wellas social security support for 2 to 12 yearsdepending on the region the investment is made.The Ministry of Health (MoH) has also launched astrategic action plan for the healthcare industrywhich details ambitious 2017 and 2023 targets for
the industry. Moreover, the Ministry of Science,Technology and Industry also defined six ambitioustargets and the related actions to achieve thesetargets.
Special focus has been given to Free HealthcareZones that bring numerous advantages to thepublic and the companies operating in them. Therewill be 4 free healthcare zones established by 2017and 10 by 2023, according to the MoH.
6
Executive Summary
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Investment Support and Promotion Agency of Turkey 7
I. General Overview of the Turkish
Economy and the
Pharmaceutical Sector
A. Macroeconomic Overview of Turkey
B. Global Pharmaceutical Sector
C. History of the Pharmaceutical Sector in Turkey
D. Overview of the Pharmaceutical Sector in Turkey
E. FDI in Turkey
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Turkey has undergone a profound economictransformation over the last decade and itseconomy is quite solid. It is the 17th largesteconomy in the world and the 6thlargest economyin Europe with a GDP of approximately USD 786billion in 2012.
Having boomed as fast as 9.3% and 8.8% in realterms in 2010 and 2011, the OECD projects a realGDP growth of around 4% in 2014 and 2015, whileEIU projects on average 5% growth until 2017
Monetary policy played a vital role over recentyears. Turkish inflation has stayed under 10%since 2004 and year-end inflation was 6.2% in2012. The governmentsefforts of taming inflationover the last decade has paid off and the CBRTprojects an inflation rate of 5% in 2013 and 2014.
8
Turkeys fast-growing economy is expected to attractmore investment in the future
Figure 1: GDP Growth Rate (Constant Prices)
Figure 2: Inflation
f: forecast
-6%
-1%
4%
9%
EIU*
0%
2%
4%
6%
8%
10%
12%
14%
f: forecast of CBRTSource: Turkstat, EIU, CBRT
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Investment Support and Promotion Agency of Turkey
0%10%
20%
30%
40%
50%
60%
Borrowing Lending
The overnight lending rates have been steadilydecreasing over the years and were around 7.5%in September 2013, which was a 500 basis pointdecrease from 2002.
Fitch Ratings announced Turkeysinvestment graderating as BBB in November 2012 and Standard &Poors announced a BB+ rating in March 2013.These events signal further upgrades and areexpected to boost the inflow of institutionalfunding.
Moody's raised Turkish government bond ratings toBaa3 and revised its outlook to stable from positivein May 2013.
Capitalizing on its economic policies, the investmentenvironment in Turkey has become increasingly morewelcoming to foreign investors
Figure 3: The Central Bank of the Republic ofTurkey O/N Interest Rates
* As of September 2013
Rating(Local
Currency)
Outlook(Local
Currency)
Rating(Foreign
Currency)
Outlook(ForeignCurrency
Standard& Poors BBB Stable BB+ Negative
Fitch BBB Stable BBB- Stable
Moodys Baa3 Stable Ba1 Positive
JCR BBB- Stable BBB- Stable
Table 1: Turkeys Credit Ratings
9
Source: CBRT, Moodys(May 2013), S&P (Febuary 2014), Fitch (December 2013), JCR (May
2013)
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According to EIU forecasts, global healthcare andpharmaceutical spending are expected to increase
in 2013compared to the previous year at a rate of2.4% and 4.0%, respectively. In Turkey, however,forecasts indicate higher growth rates than globalrates. Specifically, the healthcare sector isexpected to grow 5.8% and the pharmaceuticalsector 8.9% in 2013.
The global pharmaceutical market is expected to grow4% in 2013 from the previous year
Region 2012-2016f
Asia/Africa/Australia 10-13%
Latin America 10-13%
Tier 3* 7-10%
North America 1-4%
Europe 0-3%
Global 3-6%
Table 2: Growth Rate of PharmaceuticalIndustry in Various Regions
f: forecast
Figure 4: Healthcare and PharmaceuticalSpending Growth by Region, 2013 Forecasts
-2%
0%
2%
4%
6%
8%
10%
12%HealthcarePharma
* Pharmerging Tier 3 counties are Argentina, Egypt, Indonesia, Mexico, Pakistan,
Poland, Romania, South Africa, Thailand, Turkey, Ukraine, Venezuela, Vietnam as
indicated in IMS reports.
10
Economies in transition: Bulgaria, Czech Republic, Hungary, Poland, Romania, Russia, Slovakia, Ukraine.
Source: Economist Intelligence Unit, IMS Health Market Prognosis, May 2012, Deloitte Analysis
* ME: Middle East
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Investment Support and Promotion Agency of Turkey 11
Turkeys pharmaceutical sector has a history ofsignificant transformation and improvement
Beginning of the industrialperiod.
Raw material manufacturingstarts.
Increase in foreign directinvestments.
95% of demand is met with local
production.
Annual market growth of 10% onaverage.
Unstable pricing andreimbursement policies.
20-year patent licensing. (1995)
Stagnancy until 1984.
Good Manufacturing Practices(GMP) and various relatedstandards began to beapplied.
Advanced technologicaldevelopment occurredbecause of heavyinvestments.
Reference pricing system.
Reduction of VAT from 18% to 8%.
Data protection & Bolar provision(experimental testing).
Transfer of SSK hospitals to theMinistry of Health
The three main social securitysystems are combined under one
single entity.
Introduction of new R&D law.
Introduction of the UniversalHealth Insurance System.
The New Investment IncentiveProgram launched in 2012identified pharmaceuticals in itsPriority List of investments.
Figure 5: Turkish Health and Pharmaceutical Sector Timeline
Since January 2010 alllicense holders areobligated to place atrack and trace barcodeon manufacturedgoods.
Foundations werelaid in the 1900s bypioneeringpharmacists.
The laboratory periodstarted in the 1930s.
1950-1972 1973-1990 1991- 2003 2004-2007 2008-2013
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Turkey was the 6th
largest market in Europe and the 16th
largest pharmaceutical market in the worldin 2012 with USD 12.5 billion in sales, followed by Poland with USD 12 billion and the Netherlandswith USD 9 billion. It is expected to grow further by 7%-10% each year until 2015 due to the agingpopulation, increased average life expectancy and increased access to healthcare services.
12
Turkey has the 6thlargest pharmaceutical sector inEurope in terms of sales
USD
Billion
12,50
50
100
150
200
250
300
350
400
450
Figure 6: Top 20 Countries According to Pharmaceutical Sales in 2012
Turkey
Emerging Countries
Developed Countries
Source: EIU, AIFD
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Turkeyspharmaceutical sales grew at a CAGR of 9.7% from 2003 to 2012. This is expected to increase at aCAGR of 8.8% from 2012 to 2017 surpassing USD 19 billion, which indicates high local demand for
pharmaceuticals. As the countrystotal pharmaceutical sector has grown larger, the major local players have flourished. Turkeys
pharmaceutical market is dominated by international companies which accounted for 31.5% of the total marketin 2012. However, local manufacturers such as Abdi brahim (7.5%) and Bilim la (4.9%) also heldconsiderable shares in 2012. Above all, the market is heavily fragmented based on the fact that there areapproximately 300 pharmaceutical companies in Turkey and they add up to a market share of 44%.
13
Turkey has been a rising star with pharmaceutical salesquadrupling over the last decade surpassing theaverage sales to GDP ratio of BRIC countries
USD
Billion
Figure 7: Pharmaceutical Sales of Turkey, 2003-2017
1,8%
1,8%1,7%
1,6%
1,7%
1,6%
1,8%
1,6%
1,5%
1,6%1,7%
1,8% 1,9% 1,9% 1,9%
0,0%0,2%0,4%
0,6%0,8%1,0%1,2%1,4%1,6%1,8%2,0%
024
68
101214161820
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f 2014f 2015f 2016f 2017f
Pharmaceutical Sales Turkey - Pharmaceutical Sales/ Nominal GDP
BRIC - Pharmaceutical Sales/ Nominal GDP
f: forecast
Source: EIU, Espicom, Deloitte Analysis, IMS
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Investment Support and Promotion Agency of Turkey 14
The governments healthcare transformation programresulted in an increase in pharmaceutical spending
339 390 422505 552
667 707 699 717 753132
157200
234262
246 166 190 184228
0
250
500
750
1.000
Private Pharmaceutical SpendingPublic Pharmaceutical Spending
Figure 8: Pharmaceutical Spending in Turkeyper Capita, in PPP USD
USD
PPP: Purchasing power parities
Pharmaceutical spending in terms of PPP USD increased at a CAGR of 8% from 2003 to 2012 with more thanUSD 900 in 2012.
Turkeys spending still lags behind that of OECD average of USD 3,324 but will increase further as thegovernmentsbudget for pharmaceutical expenditures increase. The government announced a USD 7.4 billionbudget on pharmaceutical expenditure, which is a slight decrease of 6% from the previous yearsbudget ofUSD 9.3 billion. However, the budget will grow at least by the expected inflation rate over the coming years.
The total OTC market size decreased slightly from 2007 to 2012 but is further expected to increase to morethan USD 1 billion by 2017.
Figure 9: OTC Market in Turkey
USD
Billion
0%
2%
4%
6%
8%
10%
12%
0
0,2
0,4
0,6
0,8
1
1,2
1,4
OTC Market Size
OTC Market as Percentage of Total Pharmaceutical Marketf: forecast e: expected/not announced yet
Note: Year-end exchange rates are obtained from Central Bank of Turkey. The TL/USD values are: 1.39 in 2003, 1.34 in 2004, 1.34 in 2005, 1.41 in 2006, 1.16 in 2007,1.52 in 2008, 1.49 in 2009, 1.54 in 2010, 1.89 in 2011, 1.78 in 2012.
Source: Ministry of Health , AIIFD, Deloitte analysis
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Investment Support and Promotion Agency of Turkey 15
As a result, the pharmaceutical market is expected togrow a CAGR of 8% between 2013 and 2017
Between 2008 and 2012, the CAGR for Turkey was1.8%. Most developed countries experiencednegative CAGR rates within the same period.
According to Economist Intelligence Unit, thepharmaceutical sector in Turkey is expected toboom with a CAGR of almost 9% from 2013 to2017 and will pass the world average CAGR of 7%for that period by 2017.
The Turkish pharmaceutical sector has extensive
facility infrastructure, which is comparable tointernational standards. 76% of drugs consumed inTurkey are on a box basis and 49% on a valuebasis and are locally produced.
Figure 10: Pharmaceutical Market Growth for2008-2012 and 2013-2017 in Selected Countries
0
2008 - 2012
8.52 CA
1.80 TR
-1.03 IT
-2.02 NL
7.32 TW
3.89 AR
2013 - 2017-3
12
GB
HU
-0.16
-0.77
MX
FR
0.43
0.09
3.27 PO
11.15 PO
8.78 TR
3.59 GB
3.31 NL
10.24 AR
7.79 CA
IT
FR
4.15
3.87
MXHU
5.745.22
6.77 TW
Source: EIU Database, AIFD, Deloitte Analysis
Note: The numbers in the first column refer to 2008-2012 CAGR and the numbers in the second column relate to the expected 2013-2017 CAGR.
Note: Countries in the table are as follows: Argentina (AR), Canada (CA), France (FR), United Kingdom (GB), Hungary (HU), Italy (IT), Mexico (MX), Netherlands (NL), Poland
(PO), Turkey (TR) and Taiwan (TW).
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Investment Support and Promotion Agency of Turkey
Turkeyspharmaceutical exports increased at a
CAGR of 10% from 2007 to 2012, surpassingUSD 720 million.
Regarding export values, the top ten countrieshad over 55% of the total export share.Germany leads with 10% in 2012, followed byIraq with 8%, South Korea, which is Turkeyslargest export market in Asia, with 7%.
Working toward 2023 targets, the Turkishpharmaceutical sector is positioned to deliver
over USD 13 billion worth of exports by 2023.
16
Pharmaceutical exports also experienced a surge at aCAGR of 10% from 2007 to 2012
402 470 474 612 620 720818 952 1.095
1.2591.448
1.6661.915
2.2032.533
2.913
3.350
1.1431.4401.901
2.5103.313
4.373
5.773
7.620
10.058
13.277
0
3.500
7.000
10.500
14.000
USD
Million
Base Scenario
Full Potential Scenario
Source: TIM 2023 Export Strategy Report, TurkStat, Deloitte AnalysisNote: HS Codes 2936, 2937, 2938, 2939, 2941, 30 were used in the analysis
Figure 11: Turkeys Pharmaceutical Exports
Turkeys pharmaceuticalimports increased by only aCAGR of 2% between 2007and 2012 as local productionincreased. The export/importcoverage ratio increased from10% in 2004 to more than17% in 2012.
Germany is the leader of thecountries that export toTurkey, having a 17% shareof Turkeys imports in 2012.The top ten countries thatTurkey importspharmaceuticals compriseapproximately 80% of totalpharmaceutical import.
Figure 12: Turkeys Pharmaceutical Imports and Top TenCountries that Turkey Imported from in 2012
0
1,000
2,000
3,000
4,000
5,000
6,000
2007 2008 2009 2010 2011 2012
USD
Millio
n
CAGR
2%17%
13%
10%
9%7%
7%
6%
4%
4%
3%
20%
Germany
USA
Switzerland
France
Italy
UK
Ireland
India
Belgium
Spain
Other
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Investment Support and Promotion Agency of Turkey
BMI's Risk/Reward Rating (RRR) tool, which provides global comparison and a numerically based assessment ofa market's attractiveness, was established to asses the risks and rewards of given countries in the
pharmaceutical sector. Turkey's pharmaceutical Risk/Reward Rating (RRR) score for the 4thquarter of 2013 was58 points. Consequently, Turkey takes 5th place among 20 markets surveyed in CEE and CIS countries forpharmaceuticals .
Turkey's large drug market, coupled with the sector's long-term growth potential, enabled the country to scorerelatively well for rewards.
17
Turkey ranks 5thout of the 20 CEE and CISpharmaceutical markets according to BMIs RRR tool
Ind.Reward
Cou.Reward
Reward Ind. Risk Cou. Risk Risk RRR* Rank
CzechRepublic
25.2 15.6 40.8 12.4 10.0 22.4 63.2 1
Poland 26.0 13.5 39.5 11.6 10.5 22.1 61.6 2
Russia 30.4 13.0 43.4 9.5 7.6 17.1 60.5 3
Greece 24.8 15.6 40.4 9.5 8.4 17.8 58.2 4
Turkey 26.0 12.6 38.6 10.2 8.9 19.1 57.7 5
Slovakia 22.0 11.9 33.9 12.6 9.9 22.5 56.4 6
Romania 22.8 12.2 35.0 11.9 9.3 21.2 56.2 7Hungary 19.2 13.8 33.0 11.2 10.0 21.2 54.2 8
Bulgaria 18.8 14.9 33.7 11.2 8.8 20.0 53.7 9
Slovenia 14.8 13.2 28.0 14.7 10.5 25.2 53.2 10
Estonia 12.8 14.6 27.4 13.3 11.4 24.7 52.1 11
Ukraine 22.8 13.0 35.8 8.4 6.1 14.5 50.3 12
*RRR: A market's RRR score is made up of the sum total of the Reward score (Industry Rewards + Country Rewards) and the Risks score (Industry Risks + Country Risks).Source: BMI
Table 3: Selected Countries in BMIs Risk/Reward Rating Report
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Investment Support and Promotion Agency of Turkey
0
100
200
300
400
500
600
2008 2009 2010 2011 2012
USD
Million
Turkey has become an attractive destination forFDI. FDI inflows were weak after 2002, but thenexperienced an incremental increase and reached arecord level of USD 22 billion in 2007. The decreasein 2009 can be explained by the global crisis whichlowered FDI all around the world, including Turkey.However, according to the 2011 values, Turkey hasrecovered well from the downturn.
The volume of FDI inflows directed to Turkey showsa promising recovery. 2012 FDI inflows rose toUSD 12.5 billion, compared to USD 8.6 billion in2009.
Moreover, Turkey was able to attract an impressivelevel of FDI to the chemical industry, whichincludes pharmaceutical manufacturing as well asother chemical manufacturing. FDI inflows to theindustry increased at a CAGR of 27% from 2008 to2012, exceeding the USD 500 million level in 2012.
18
Turkeys FDI for the manufacturing of chemicals andchemical products, which also covers pharmaceuticals,increased at a CAGR of 27% from 2008 to 2012
CAGR27%
Figure 14: FDI in the Chemical Industry in
Turkey*Figure 13: FDI Inflows to Turkey, 2003-2012
1,702,79
10,03
20,1922,05
19,76
8,66 9,04
16,05
12,56
0
5
10
15
20
25
USD
Billion
* Includes the manufacture of chemicals, chemical products and basicpharmaceutical products and materials.
Source: World Development Indicators, World Bank DataBank, CBRT
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The R-Pharm Group established a subsidiary inTurkey that will take care of local registering,marketing and sales activities for owned andlicensed pharmaceuticals. By entering the Turkishmarket, the R-Pharm Group wants to expand thedistribution market for pharmaceuticals producedin its manufacturing sites in Russia. The companyis now opening an office in Istanbul
The R-Pharm Group sees the Turkishpharmaceutical market as a prospective marketthat has both attractive policies and regulations for
foreign investors and ongoing programs supportingthe local pharmaceutical sector.
The company is also planning to construct abiotech manufacturing site in Turkey similar toexisting Russian ones.
The R-Pharm Group is going to invest EUR 100million into its Turkish business. These resourceswill be spent on pharmaceutical registration, R&Dand phase 1 construction of the manufacturing site.
Moreover, global pharmaceutical giant Baxter is setto invest in Turkey. The company has been knownto invest in pharmaceuticals geared towards theimmune system.
19
Turkey is attracting pharma giants from all over theworld
The rapidly growing Turkish market is a good platform forour geographical expansion. We expect that our Turkishsubsidiary will secure the supply of R-Pharm medical
products to the Middle East and Africa.
R-Pharm Group, CEO Vasily Ignatiev, May 2013
U.S. pharmaceutical firm Baxter has announced plans tomake a USD 170-180 million investment in Turkey...
Minister of Science, Industry and Technology, Nihat Ergn,
June 2012
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Investment Support and Promotion Agency of Turkey 20
which has manifested in M&As worth USD 1.7 billionsince 2006
Acquirer Target DateDeal Value
USD MillionsStake
Citibank Venture Capital Ltd;
Partners in Life Sciences (PiLS)
Biofarma Pharmaceuticals Co. Ltd. 2006 200 100%
White Swan Corporation B.V. Taymed Salk Urunleri Ticaret Ltd. ti. 2006 N/A 100%
Partners in Life Sciences (PiLS) Munir Sahin laSanayi ve Ticaret A.. 2006 22 100%
International Pharma Ltd. Deva Holding A.. 2006 50.2 18%Actavis Group hf (formerlyPharmaco hf )
Fako lalari A.. 2006 20.4 10%
Eastpharma Holding Saba la Sanayii ve Ticaret A.. 2007 10 96%
Zentiva NVEczacba-Zentiva Kim. Ur. San. ve Tic. A..
Eczacba-Zentiva Sag. Urun. San. ve Tic. A..2007 602 75%-75%
Sandoz International GmbH Roche Holding AG (Gebze production plant) 2007 N/A 100%
Eczacba la Monrol Nkleer rnler 2008 43.1 50%
Giriim Sermayesi Dr. F. Frik la Sanayi 2008 13.4 17%
Partners in Life Sciences Betasan Pharmaceuticals 2008 N/A 100%
Recordati SpA Yeni la 2008 60 100%
Ebewe Pharma EBV Limited 2008 N/A 99.5%
Zentiva NV Eczacba-Zentiva Kim. Ur. San. ve Tic. A..Eczacba-Zentiva Sag. Urun. San. ve Tic. A.. 2009 N/A 25%-25%
Alliance Boots Hedef Alliance Holding 2010 N/A 10%
Polpharma Cenovapharma 2011 N/A 77%
Recordati SpA Giriim Sermayesi (shares in Dr. F. Frik) 2011 30.5 100%
NBK Dem la 2012 N/A N/A
Amgen Mustafa Nevzat la 2012 669 96%Source: Deloitte, Annual Turkish M&A Reports
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II. A Detailed Look at the TurkishPharmaceutical Sector
A. Overview of the Pharmaceutical Value Chain
B. Policy and Regulatory Landscape
C. Discovery and R&D, Raw Material Production, PharmaceuticalManufacturing, Wholesale and Retail
D. Major Stakeholders in the Pharmaceutical Sector
E. Special Focus: Biological Products, Oncological Drugs and Blood Products
21
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Investment Support and Promotion Agency of Turkey 22
The Ministry of Health is the regulatory body of thepharmaceutical sector
Discovery andR&D
Raw MaterialProduction
PharmaceuticalManufacturing
Wholesale Retail
The Ministry of Health, Social Security Institute
There are 10differentcompanies and 12different rawmaterial producingfacilities that areinvolved inproduction.
Raw materials are
used tomanufacturepharmaceuticalgoods or areexported to othercountries.
Currently, Turkeyspharmaceuticalsector is notfocused ondiscovering newmolecules toproduce newdrugs. Instead ofconcentrating on
discovery, whichneeds largeamounts of capital,Turkey isconcentrating onmodifying existingmoleculesandadjusting dosage.
More than 300international anddomesticpharmaceuticalcompanies operatein Turkey.
70 firms havepharmaceuticalend-product
manufacturing inTurkey. More thanhalf of theproduction facilitiesare located inIstanbul, which isthe business centerof Turkey.
There are morethan 500 wholesalecompanies, butonly about 200 ofthese firms areactive.
Wholesalers mainlysellpharmaceuticals to
pharmacies butcan also sell somecosmetics andother FMCG (fast-moving consumergoods) products topharmacies.
There are morethan 24,000pharmacies inTurkey as of 2012.Pharmacies aredistributedaccording topopulation densityacross the country.
Pharmacies alsosell some cosmeticand FMCG (fast-moving consumergoods) products.
The Ministry of Health oversees the industry and has several different institutions under its auspices. Theseinstitutions include the General Directorate of Pharmaceuticals and Pharmacy (EGM), the Public Healthcare
Institute, the Public Hospitals Institute, the Directorate General of Health for Border and Coastal Areas. IEGMoversees all activities in the pharmaceutical sector.
The SSI oversees the price and reimbursement mechanism for pharmaceuticals.
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The Healthcare System
TurkeysMinistry of Health (MoH) was founded in1920. It is the largest healthcare provider and isstill the countrys only preventative healthcareservices provider. The MoH is also the mainprovider of primary and secondary care. The MoHis responsible for the nationshealth policies and itshealth services. At the provincial level, healthservices provided by the MoH are administered byprovincial health directorates, which areaccountable to provincial governors.
The Turkish Drug and Medical Device Institute, a
part of the MoH, is in charge of the control andregulation of pharmaceutical prices. Manufacturersand importers are obliged to apply for the MoHsauthorization for new product prices, as well as forprice increases and decreases.
Turkey complies with international treaties in thefield of intellectual property and complies withEuropean Union standards. By adopting patentprotection into national legislation for
pharmaceuticals, the transformation period rightallowed by the WTOs TRIPS Agreement* waswaived and as of January 1, 1999, all applicationsthat had been accepted since 1995 were givenpatent protection.
The data protection liability under TRIPS enteredinto effect in Turkey in March of 1995. In thiscontext, all of the confidential informationsubmitted for the purpose of obtaining a license is
protected. With this development, laws that are related to
data protection in Turkey got closer to Europeanstandards.
23
The Turkish healthcare sector has been transformingand evolving since the early 90s
*WTOsTRIPS Agreement: The Agreement on Trade Related Aspects of Intellectual
Property Rights in the World Trade Organization
Source: Ministry of Health, IEGM
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Prices are regulated by the Turkish Drug and Medical Device Institute, which is a part of the Ministry of Health.Turkey operates a reference pricing system, implemented in 2004 and amended extensively in 2009, 2010 and
2011.
To determine the price of pharmaceuticals sold in the market, Turkey operates an external reference pricingsystem: the lowest ex-factory price of the products among five EU members (France, Spain, Italy, Portugal andGreece) and the country of origin, from which the drug is procured, is then reduced by 11%. The referenceprice level can mean the price is reduced to 60% of the comparable product in the EU states. In addition, apublic discount of 28% (for generics) and 41% (for innovative products without generic equivalents) is thenapplied to the prices. Final retail prices have predetermined wholesale and pharmacy margins, plus a VAT of8%.
However, if the countries in which the relevant pharmaceuticals are being manufactured and imported areoutside of the mentioned reference countries and have warehouse sales prices that are lower than thereference country price, the price in the country with the lowest warehouse sales price is accepted as referenceprice.
24
Pricing System:In Turkey, the reference pricing system began in 2004.
Table 4: Pharmaceutical Prices in Turkey
Reference Pharmaceuticals thatDo Not Have Generic Competition
Reference Price
+Wholesaler and Pharmacist Profit
Margin
+
8% VAT
Reference Pharmaceuticals thatHave Generic Competition
60% of the Reference Price
+Wholesaler and Pharmacist Profit
Margin
+
8% VAT
20 Year Pharmaceuticals(over TL 6.79)
80% of the Reference Price
+Wholesaler and Pharmacist Profit
Margin
+
8% VAT
Source: Pharmaceutical Manufacturers Association of Turkey, ES, EGM
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Pricing System:The VAT rate applied to medicines in Turkey is lower than that ofEuropean countries.
CountryStandardVAT Rate
(%)
VAT Rates Applied toMedicine Country
StandardVAT Rate
(%)
VAT Rates Applied to Medicine
Prescription (%) OTC (%) Prescription (%) OTC (%)
Austria 20 10 10 Poland 23 8 8
Bulgaria 20 20 20 Iceland 25.5 25.5 25.5
Czech Republic 21 15 15 Italy 21 10 10
Denmark 25 25 25 Norway 25 25 25
Estonia 20 9 9 Romania 24 9 9
Finland 24 10 10 Slovakia 20 10 10
Germany 19 19 19 Turkey 18 8 8
Table 5: VAT Rates Applied to Medicines in Selected European Countries
Source: EFPA, Figures Key Data 2013
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Social Security Institute:SSI is the single entity made up of the three former social securityinstitutes.
Former Social InsuranceOrganization - SSK
The plan covered almost allprivately employed workers andblue-collar public sector workers,retirees and their dependents.The SSK was mainly financed
through mandatory contributionsfrom employers and employees.Additional income was obtainedfrom fees paid by non-membersusing SSK services (e.g.members of BaKur) and fromco-payments.
Former Social SecurityOrganization for Civil Servants
Emekli Sandg
The plan provided healthcarebenefits to currently employedand retired white-collar publicsector employees and theirdependents (active civil servants
are separately insured by theMinistry of Finance). Insurancepremiums are collected fromincome and the plan is subsidizedfrom the government budget forpension and healthcare benefits.
Former Social SecurityOrganization for Artisans and the
Self-Employed BaKur
The scheme provided insurancefor independent traders and theself-employed. A reimbursementsystem was established and feesare determined independently by
the institution. Co-payments of20% from active members and10% from retired members arerequired for the purchase ofdrugs, as is the case of SSK.
Social Security Institution (SSI)
In 2006, the three main social security systems, namely SSK, BaKur and EmekliSand, were combined under one single entity, the Social Security Institute. Thepopulation covered with the Green Card health plan is also covered by the new socialsecurity institution in order to make sure that all citizens are supported. There willalso be only one payment agency for healthcare, the Universal Health Fund, makingthe system more efficient and effective. This new system is a part of Turkeysongoing healthcare reforms and aims to solve many problems of the Turkish healthsystem over the years, including low population coverage, reliance on out-of-pocketpayments and an uneven distribution of facilities and personnel.
The History of Health Insurance in Turkey
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The social security system in Turkey went through a major transformation, resulting in a faster and moreefficient system because it centralized control of different social security funds into a single institution.
Within the scope of the program, the three insurance funds, namely SSK, Emekli Sand and BaKur, weremerged into a sole body called the Social Security Institute (SSI).
The social security system now covers approximately 99% of the total population with 75.2 million peoplecovered, which is an increase of 29% from 2002.
27
Social Security Institute:Social Security coverage expanded rapidly in Turkey, which in 2012covered 99% of the population.
70% 71%
84% 86%90% 93% 93% 94%
96% 98% 99%
0%
20%
40%
60%
80%
100%
0
50
100
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Covered Not Covered Coverage Ratio
Figure 15: Social Security Coverage
Source: SSI
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Pharmaceutical companies have to apply to the Ministry of Health and SSI in order to include their drugs in thereimbursement program. Reimbursement procedures for different pharmaceutical products and medical devicesmay differ and are explained in detail in the SSI Health Application Legislation.
Reimbursement is made for pharmaceuticals that are at most 10% above the determined price of the relatedpharmaceutical in the generic group.
Discounts are applied by pharmaceutical companies and pharmacists to the public for pharmaceuticalpurchases.
28
Social Security Institute:Drug reimbursement is governed by the inter-ministerialReimbursement Commission, led by the Social Security Institute.
SPW: Sales Price to Wholesaler
Reference Generics 20 Year
SPW 3.55 4% -> 0% 4% -> 0% 4% -> 0%
3.56 SPW 6.78
WithoutGenerics
With Generics28% -> 20% 11% -> 7%
41% -> 20% 28% -> 20%
6.79 SPW 10.21 41% 28% 28%Production With Ref. Without Ref.
28% -> 20% 28% -> 20% 40% -> 20%
10.22 SPW 41% 28% 28% 28% 28% 40%
Source: Medical Enforcement Ddeclaration dated 12.11.2013, Pharmacutical Manufacturers Association of Turkey, ES
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Social Security InstitutionReimbursement amount was more than USD 7 billion in 2012.
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
0,0
2,0
4,0
6,0
8,0
10,0
2009 2010 2011 2012Reimbursed drug market Reimbursed drugs sales
USD
Billion
Billion
Unit
Figure 16: Reimbursements in the Turkish Pharmaceutical Market
Turkeystotal reimbursement within the pharmaceutical market in terms of value decreasedto USD 7.28billion in 2012, which accounts for a decrease of 7.3% CAGR from 2009 to 2012.
Moreover, the number of reimbursed drugs unit sales decreased at a CAGR of 2.1% during the same timeframe.
Therefore, companies are trying to expand into the OTC market with different product offerings.
Note: Year-end exchange rates are obtained from the Central Bank of Turkey. The TL/USD values are 1.49 in 2009, 1.54 in 2010, 1.89 in 2011, 1.78 in 2012 and 2.13 in 2013.
Source: AIFD
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In Turkey, real persons and legal
entities are required to present anapplication to the Ministry in orderto receive a license for theirproducts.
To make procedures more efficientand less time consuming, differentcommittees operatesimultaneously. The relatedCommittees are as follows:
Advisory Committee for theLicensing ofPharmaceuticals: Issues anopinion for the product that willbe licensed.
Pharmaeconomic AdvisoryCommittee: Reviews thepharmaceutical in terms ofeffectiveness and cost-benefit
as well as performing a costminimization analysis.
Technology-PharmacologyAdvisory Committee:Examines the productpharmacologically.
30
Licensing Regulation:Per licensing regulation, the whole process takes 240 days.
Figure 17: Licensing Process
Unlicensed Product
NewPharmaceutical
BranchGeneric Branch
Main Commttee
Sales Permit
Lcense IssueName/Package
Addition To PriceList
By/Br BranchDrectorate
TechnologyComittee
Kub-kt Committee(Parallel)
Cdt Pre-examinaton
Branch
TechnologyComittee
License IssueName/Package
Kub-ktCommttee(Parallel)
Sales Permit
Refik SaydamAnalyss Lab.
Repayment
Refk SaydamAnalysis
Suffciency
Price And Cost Studies BranchDirectorate Parallel
Addition To PriceList
Repayment
Parallel
Source: Pharmacutical Manufacturers Association of Turkey, ES
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The licensing process in Turkey is carried out according to the provisions of the Human Medical Products
Licensing Regulation, which was prepared under the scope of Law No. 1262 named the Pharmaceutical andMedical Preparations Act and in compliance with European Union legislation. The Human Medical ProductsLicensing Regulation came in to effect on January 19, 2005
The application files are prepared and presented in CTD format in accordance with regulations. CTD format,which is an international standard, was established to present applications in an organized manner andstandardized with the procedures of pharmaceutical licensing authorities in Europe, the USA and Japan.
CTD format comprises these five modules:
31
Licensing Regulation:Applications should be presented in a CTD format.
Module5:
ClinicalStudy
Module 4:
Outside of
ClinicReports
Module 3:
Chemical,Pharmaceuti-
cal andBiologicalInformation
Module 2:
QualityInformation,
Outside of
Clinic andClinicSummaries
Module 1:
AdministrativeInformation
Source: Pharmaceutical Manufacturers Association of Turkey, E S
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A reference pharmaceutical is a product that hasbeen developed by an innovating company andoffered to the market under patent protection.After the patent period has expired, these productsare used as reference products in order to producegeneric pharmaceuticals.
Generic pharmaceuticals are medications that havebeen scientifically proven to have the sameproperties as the reference pharmaceutical andtherefore, provide the same therapeutic results inthe patient. They are presented for sale after thepatent period for the reference pharmaceuticalshave expired. A generic pharmaceutical must havethe same effectiveness, quality and reliability as itsreference pharmaceutical.
All of the phases that generic pharmaceuticals gothrough from production until it is put on shelf forsale, are the same ones that referencepharmaceuticals go through as seen in the table on
the left. Only the clinical studies that are performedon living organisms by reference pharmaceuticalproducers are not done. Therefore, the R&D costsare significantly reduced.
32
Licensing Regulation:Different requirements are necessary for generic and referencelicensing.
Licensing Requirements Generic Reference
General Information of Company
Product Properties
Expert Report
Pharmaceutical Compound
Good Manufacturing Practices
Primary Materials Inspection
Finished Product Inspection
Stability Test (Active Content andFinished Product)
Comparison of Generic Productwith Reference Product
Pre-Clinical Studies
Clinical Studies
Bio-Equivalence
Table 6: Requirements for Licensing in Generic
and Reference Drugs
Source: Pharmaceutical Manufacturers Association of Turkey, ES
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The Pharmaceutical Track and Trace System monitors pharmaceuticals at every stage and was created in orderto prevent fraud and maintain patient security.
Under this system, all pharmaceuticals produced in Turkey are defined with a two dimensional barcode systemwhich contains a variety of information. The barcode is the pharmaceuticalsfingerprint. The barcode number,serial number, expiration date and party number are included in the barcode.
As of January 1, 2010 all license holders are required to place a barcode on all products that they produce.
Hospitals, health centers, family physician centers, pharmacies, pharmacy warehouses, manufacturers,importers and reimbursement institutions are all stakeholders under the scope of the Pharmaceutical TrackingSystem.
33
With the Pharmaceutical Track and Trace System, thefingerprint of a pharmaceutical will always bemonitored
Products Under the Scope of the System
Drugs: These are the prescription drugs whichcan be obtained only from pharmacies with avalid prescription.
Medical Nutrition Products: The products on
the market known as food supplements andthose used for medical purposes called medicalnutrition products". As with drugs, medicalnutrition products require monitoring and theyfall under the scope of the system.
Products Outside the Scope of the System
Serums, radiopharmaceuticals and drugsmanufactured for private use with the exceptionof medical food and enteral nutrition products lieoutside the scope of system until 01/01/2014.
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Turkey is ranked 35thin the world in terms of clinicalresearch conducted
0 1.000 2.000 3.000 4.000 5.000 6.000
USA
Germany
UK
Spain
Belgium
Brazil
Turkey
70,497
10,465
7,947
5,530
4,560
3,440
1,267
Figure 18: Total Number of Clinical Research
Conducted in the World, 2013
The Turkish Drug and Medical Device Institute is
the regulatory authority for drug discovery andR&D. It also monitors clinical research and R&Dactivities in Turkey. The institute has prepared thelegislation related to clinical research in August2011, which is compatible with the European Uniondirectives.
Companies that want to conduct research in thefollowing areas must apply for permission from theMinistry of Health for:
Pharmaceuticals, medical products andherbal medicinal products that will be testedon human subjects.
Pharmaceutical studies
Bioavailability and bioequivalence studies
Studies of medical devices and medicaldevice clinical research
Stem cell transplantation research Organ and tissue transplantation
New surgical methods research
Turkey is ranked 35thin number of clinical researchconducted in the world and 19thin Europe. Turkeyconducted over 1,200 clinical trials in 2013 andtook a share of 0.6% of total clinical researchconducted in the world.Source: clinicaltrials.gov, Ministry of Science, Industry and Technology
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In order to develop research, Turkey has increased itsR&D expenditure by a massive 73% from 2010 to 2011
5287
8
17
2010 2011
R&D expenditure in manufacturing of basicpharmaceutical products and pharmaceuticalpreparations have increased at a staggering rate of73% from 2010 to 2011 surpassing USD 100million in 2011.
The Center for Basic Drug Research, known asITAM, was established to increase the globalcompetitiveness of Turkey by focusing onimproving R&D investments for the pharmaceuticalsector. Moreover, the center will establish a facilitythat transfers advanced technology in order tomanufacture sustainable and value addedpharmaceutical products.
73%
Figure 19: Business Expenditure on R&D in
Manufacturing of Basic Pharmaceutical Products andPharmaceutical Preparations in Turkey (USD Million)
Even though Turkey does not conduct new
molecule research, which takes large amounts ofcapital investment and long research periods, itdoes conduct research on molecule that havealready been discovered and produces otherformulas at different dosage levels.
Moreover, Law No. 5746 supports and encouragesthe development of technology in Turkishcompanies so they can become globallycompetitive through R&D and innovation. This will
also increase the quality of product as well asstandards. Along with these important attributes itwill also fuel innovation in products andmanufacturing, decrease production costs, increaseproductivity, commercialize technical knowledge,develop pre-competitive R&D cooperation betweenrival companies, intensify technology productionand promote entrepreneurship, increase theamount of FDI directed to R&D and innovationfunding and finally, increase employment for R&Dpersonnel.
Pharmaceutical companies constitute 3.5% of thetotal number of R&D centers in Turkey and theyare prominently located in the Marmara region.
Note: Year-end exchange rates were obtained from the Central Bank of Turkey. TheTL/USD values are 1.54 in 2010 and 1.89 in 2011.
Source: Turkstat
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In addition to the Investment Incentive Systemthat went in to effect in 2012, pharmaceuticalsector investment initiatives are supported throughseveral regulations and incentive plans.
36
There are various incentive programs for thepharmaceutical sector
TBTAK-TEYDEB Program
TBTAK Industry R&D Projects Support Program
Law No. 4691 on Technology Development Zones
Law No. 5746 on Supporting R&D Activities
Entrepreneur Support (TBTAK / KOSGEB)
Income tax exemption
Corporation tax exemption
Income tax exemption for researchers, developersand R&D personnel
Social security premium support Value added tax exemption
Some Incentives for Investors
36
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1501: Industry Research and Development This program is aimed at supporting companies for theirtechnological R&D activities. Any enterprise located in Turkey which provides added value to the industry canapply to this program. This program supports up to 60% of the proposed project.
1502: EUREKA The aim of EUREKA is to enhance the collaboration between R&D centers, companies anduniversities in Turkey and Europe. Support totalling up to 50% is achievable through this program.
1503: Project Market Support Program The aim of this program is to create collaboration between theprivate sector/industry and universities to make ideas into real projects using combined expertise. As of 2013,the budget for Program 1503 is defined as TL 25,000 (about USD 12,000) for local projects, TL 30,000 (aboutUSD 14,000) if international players are included in the project.
1507: Small and Medium Size Enterprises R&D Support Program 1507 is designed for small andmedium size enterprises and their role in R&D activities so they can develop available goods, increasestandards and decrease costs. Incentive support for Program 1507 is 75% of the total budget.
1508: Support Program for Technological and Innovation Focused Ventures This program is aimed atyoung professionals who have innovative projects. Projects that have budget of TL 100,000 (about USD47,000) will be supported by TEYDEB up to 75% of that sum.
1509: International Industry R&D Projects Support Program Program 1509 supports internationalprojects that are announced under EUREKA, ERA-NET and the European Union Framework Programs. For bigenterprises support up to 60% is available, whereas for small and medium enterprises support up to 75% canbe granted by TEYDEB.
37
TEYDEB Incentive Programs for Businesses
Figure 20: R&D Business Processes Supported by TEYDEB
Understanding of Demand Ideation of the Product Idea for Process of Manufacturing
Design of the Product Product Prototype Production System Design Pilot Production
1stPhase: Conceptual Design 2ndPhase: Technology Development
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Direct financial support is available for the adaptation of new technology, process development, theimprovement of quality and environmental modification projects via university partnerships:
Up to 75% of the project budget can be supported by direct grants. The project term is 3 years, with a possible extension of 6 months.
Laboratory analysis, test materials and equipment are funded.
The application file should be approved within 4 months.
The project supervision committee is independent
The grant program is supported by the Ministry of Science, Industry and Technology. The target of theprogram is a high level of competitiveness in the market, where the importance of innovation and R&D is
understood and Turkey produces and sells its own technology.
38
SAN-TEZ: University-Industry Cooperation that issupported by the government
0,0
5,3 6,59,1 12,2
23,2
4,73,6
8,6 9,913,4
14,3 15,9
34,3
0
5
1015
20
25
30
35
40
2006 2007 2008 2009 2010 2011 2012
USD
Million
Used Monetary Amount Budgeted Monetary Amount
Figure 21: Grants for Pharmaceutical R&D Projects by TBTAK(as of 1 June 2012)
Source: TBTAK, Ministry of Science, Industry and Technology
Note: Year-end exchange rates are obtained from the Central Bank of Turkey. The TL/USD values are 1.41 in2006, 1.16 in 2007, 1.52 in 2008, 1.49 in 2009, 1.54 in 2010, 1.89 in 2011, and 1.78 in 2012.
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TEYDEB Application and Evaluation Process
Interested parties can apply to TEYDEB at any time,however, it is important to note that expenditures upto 3 months before the application date are eligibleto benefit from the incentive program.
39
TEYDEB also supports other company expenditures
Application to TBTAK-TEYDEB
TEYDEB Pre-Assessment
Evaluation of the Judge
Decision Making Process
Signing of the Contractupon Project Approval
Expenditures Supported by TEYDEB
Personnel expenses
Equipment, hardware, software and purchases ofpublications
Consulting services locally and internationally as wellother services
R&D expenditures incurred by universities within thecountry, R&D centers associated with TBTAK and
similar associations Material and other related expenses
Travel expenses of project personnel and ifapplicable of consultants,
Project preparation expenditures (only for SupportProgram No. 1507),
Certified Public Accountant expenditures (only forSupport Program No. 1507),
Expenditures regarding patent registration from theTurkish Patent Institute
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TEYDEB granted pharmaceutical R&D projects USD 45million between 2000 and 2012
Figure 22: TBTAK Grants for Pharmaceutical R&DProjects The Technology and Innovation Funding
Programs Directorate (TEYDEB) supports theR&D activities of private sector organizations.
In the pharmaceutical sector, a total of USD45 million was granted to 172 uniquepharmaceutical projects between 2000 and2012. It constitutes a 3.3% share of totalgrants within that period.
40
0
5
10
15
20
25
30
35
40
45
0
2
4
6
8
10
12
Numb
erofProjects
USDMillion
Note: Year-end exchange rates were obtained from the Central Bank of Turkey. TheTL/USD values were 1.39 in 2003, 1.34 in 2004, 1.34 in 2005, 1.41 in 2006, 1.16 in
2007, 1.52 in 2008, 1.49 in 2009, 1.54 in 2010, 1.89 in 2011 and 1.78 in 2012.
Source: TBTAK, TEYDEB
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The Ministry of Science, Industry and Technologywill meet the fixed costs of companies that cannotafford their respective costs. Companies do nothave to pay income tax until 2023. They canobtain free access to state-owned intangiblesfor 5years, but later have to pay 0.2% of the propertytax.
Entrepreneurs operating in this region are exemptfrom income tax until 2023 from income madethrough R&D operations and software. Taxes onwages of R&D personnel are exempt until 2023.
Law No. 5746, the R&D Operations Support, willfinance 50% of social security premiums for 5years for R&D personnel.
One TDZ Under ConstructionMore than One TDZ
The Minister of Science,
Industry and Technology,Nihat Ergn:
"The 2023 goals for TDZs are5,500 companies, 65,000employed, and 10 billion
dollars of exports."
41
Technology Development Zones contribute significantlyto R&D of pharmaceutical manufacturing industry
TDZs are organized research and business centerswhere academic, economic and social structuresare integrated. Universities, research institutions,and industrial foundations work together forinnovation, information and technology transfer;increasing productivity and reducing productioncosts; increasing product quality and standards;enabling product development; commercializingknow-how; supporting technological investments
and entrepreneurship; and creating jobs forresearchers.
TDZs are governed by Law No. 4691, named theLaw for Technology Development Areas.
The support and exemptions for TDZs provided bythe law can be categorized under 3 headings:companies, entrepreneurs and faculty members.
Source: The Ministry of Science, Industry and Technology, Association of Turkish Technology Parks
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55% 8% 5% 32%
Software and Informatics Electronics Industry
Defense Industry Other
604 8021.154 1.254
1.515 1.8002.174 2.209
25 2532
5364 66
70 72
0
20
40
60
80
0
1.000
2.000
3.000
2006 2007 2008 2009 2010 2011 2012 2013
Total Number of Firms Foreign Firms
Figure 23: Total Number of Firms in TDZs, Foreign and
Domestic
2.525 3.0693.403 4.102
4.979 5.703 5.717
157
230
297 301 301322 322
0
100
200
300
400
0
2.000
4.000
6.000
8.000
2007 2008 2009 2010 2011 2012 2013
Projects Patents
Figure 24: Firms by Sector in TDZs
Every year on average, 4 new TDZs are opened
in Turkey. The increasing number of TDZs isexpected to continue as Turkey proceedstowards its goals for the year 2023.
55% of the firms in TDZs are engaged in thesoftware and informatics business. Other areasof focus are electronics and the defenseindustry.
There are 72 foreign investors among the2,209 firms in TDZs and their investments arevalued at approximately USD 683 million.
As of April 2013, the number of projects was5,717 and the total export value reached at theend of 2012 was USD 893 million.
A total of 322 patent applications were madeby firms in TDZs.
The employment breakdown in TDZs are asfollows: 15,960 in R&D and 3,536 forsupport personnel, totaling 19,496employees.
Source: Ministry of Science, Industry and Technology
Figure 25: Total Projects and Patents in TDZs
42
The number of TDZs has doubled and number ofcompanies active in TDZs has quadrupled in the last 7years
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Company Name Location Description
Abdi brahim la Sanayi ve Ticaret A.. Istanbul
The R&D center was founded in 2008 with an investmentof USD 40 million. The company dedicates 5% of itsannual turnover to R&D. The center has more than 140employees and recently developed the worlds first ODT(orally disintegrating tablet). The firm has the highestnumber of TBTAK R&D projects and focuses on know-how transfer.
Bilim la Sanayi ve Ticaret A.. Kocaeli
Bilim la has a R&D center founded with a USD 15
million investment. The center has 220 high-tech devicesand 110 employees. More than 150 of its products ofsolid, semi-solid and liquid medicines are developed inits own laboratories.
Deva Holding A.. Istanbul
Deva Holdings R&D center DeArge has 133 trained andspecialized personnel working in their facilities. In 2012,they completed 48 product development projects in theirlaboratories along with 5 ongoing projects with TBTAK,of which 2 was successfully completed in 2012.
Mustafa Nevzat la Sanayi A.. IstanbulMN Pharmaceuticals has R&D projects that receivesfunding from TBTAKs support program.
Zentiva Salk rnleri Sanayi ve Ticaret A.. Krklareli
Sanofi (Zentiva) conducts about 25% of the ongoingR&D projects in Turkey. Since 2010, it workscooperatively with Ege University in their R&D centerthat employs 70 experts.
Table 7: List of Companies Operating Active R&D Centers
5 firms have been granted R&D licenses by the Ministryof Science, Industry and Technology to conductresearch
Source: ISPAT, Ministry of Science, Industry and Technology
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Case Study: Research Centers
ARGEFAR Drug Development Research &Pharmokinetics Application Center
ARGEFAR is a public institution founded in 1993within the Ege University Hospital campus inBornova, Izmir.
ARGEFAR carries out clinical drug trials, thedetection of the bioequivalence of drugs, foodanalysis, the analysis for the purity of honey,analysis of biocidal products and other types ofproduct development. These projects are fundedwith TL 8 million and are conducted by 46
researchers. ARGEFAR aims to contribute to the development of
the sector and continues to integrate with EUprograms by developing the physical and technicalinfrastructure to enable it to work within the EUframework.
FABAL Ege University Pharmaceutical SciencesResearch Center
The center was founded in 2011. It has scientificpartnership with various organizations to developprojects. FABAL (Pharmaceutical Sciences ResearchCentre) focuses on developing a multidisciplinaryapproach to research and offers consulting, analysis,research collaboration, product development andtraining activities.
The total project cost of the center is USD 7 million.The center is involved in multiple projects with ERAD
and TBTAK. FABALsmain purpose is to support researchers by
providing them with facilities and the necessaryequipment to test and analyze their data. It alsohelps with the creation of projects via researchcollaboration and organizes professional trainingprograms, seminars, and workshops.
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Case Study: GlaxoSmithKline, Pfizer
Pfizer
Pfizer, active in Turkey since 1957, produces 77% ofthe pharmaceutical products marketed in Turkey.
Pfizer strives to contribute to Turkey becoming aglobal center of excellence in R&D through activitiesaimed at improving the R&D environment in thecountry.
In May 2011, five projects were awarded in the fieldof Pfizer Health Sciences and Technologies in aninnovation project competition held in Hacettepe
Technopark. The goal of the competition was tocontribute to science, technology and humanity byproducing industrial products and technology for bothTurkey and the world.
In November 2012, Pfizer established its third globalvaccine facility in Turkey, after having done so in theUSA and Ireland. The facility produces pneumococcalconjugate vaccine, which is one of the mostsignificant biotechnological products in the world.
State-of-the-art technology is used in the facility toproduce the vaccine.
Having invested over TL 8 million in education andhealth-oriented social responsibility projects over thelast decade, Pfizer Turkey continues to meet theneeds and contribute to the welfare of Turkish society
GlaxoSmithKline
British pharmaceutical giant GlaxoSmithKline willestablish a clinical research facility to manufacturevaccines in Turkey with Turkish company DOL.
The worlds largest maker of vaccines plans toproduce five vaccines including those for hepatitisand influenza, while employing 80 scientists andresearchers in Turkey.
In the first stage of production, 17 million doses ofvaccines per year will be manufactured. The capacity
is expected to be increased to 30 million doses peryear the following year.
The facility will improve vaccine know-how in Turkey,increase R&D spending in the sector and develop co-operation between Turkish and foreign scientists.
Source: Dnya Gazetesi, invest.org.tr, medical tribune, Pfizer
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Many of the raw material and pharmaceuticalproduction facilities in Turkey are close to ports, afactor that eases transportation and logistics
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RawMaterial Production
PharmaceuticalProduction
Istanbul
KocaeliSakarya
Dzce
Ankara
Adyaman
Samsun
Konya
IzmirUak
Krklareli
Tekirda
Afyon
Balkesir
Source: Deloitte Analysis
1
4
6
372
22
2
1
11
1
1
1
3
35
5
8
h diff i d diff
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Company Major Products
Afyon AlkaloitleriFabrikas
Morphine, recrystallized morphine, morphine hydrochloride, morphine sulfate, codeine base, codeinephosphate, codeine hydrochloride
Med-Mar Tuz Medical salt production
Deva Holding* Cefuroxim axetil amorphous, potassium clavulanate and mixtures (avecel, syloid and amoxicillin blends),
Amlodipine besylate, bupropion hydrochloride, ezetimibe, ibandronate sodium, lincomycin hydrochloride,netimicin sulfate, pioglitazone hydrochloride, monohydrate piperacillin, pregabalin, risedronic acid,sildenafil citrate, sodium trihydrate alendronate, risedronate sodium, sultamicillin base, sultamicillintosylate, telmisartan, topiramate, valacyclovir hydrochloride, zolmitriptan, amlodipine mesylate,potassium clavulanate and amoxicillin trihydrate bulk blends with silica microcrystalline celulose anddouble and triple blends in various proportions.
Mustafa Nevzat 6 APA, 7 sage, alendronate pamidronate (lyophilized), amlodipine besylate, amoxicillin trihydrate,ampicillin anhydrous, ampicillin trihydrate, aripiprazole, acetyl-methoxytryptamine (melatonn),atorvastatin, azithromycin, befloksaton, sodium indanyl carbenicillin, cefazolin sodium, cefaperazonsodium, sodium cefotaxim, ceftriaxon sodium, cephalexin H2O, ciprofloxacin, cloxacillin sodium,
doxazosin, donepezil hydrochloride, Etodolac, famotidine, famciclovir, finasteride, fluconazole, fluvastatin,ganciclovir, gemfibrozil, gliclazide, granisetron hydrochloride, indinavir, imatinib mesylate, ketorolac,Clarithromycin, clodronate, fluvoxamine, lamivudine, latamoksef, lomefloxazin, loratadine, medifoksamin,meropenem, mezlocillin sodium, milnacipran, mirtazapine, monosodium
Koak Farma Pemetrexed disodium, zoledronic acid monohydrate, methotrexate disodum, enoxaparin sodium,ibandronate sodium monohydrate, production of raw materials
Turkey imports a large quantity of pharmaceutical raw materials. There are 12 pharmaceutical raw materialproducing facilities and 10 different pharmaceutical raw material producing companies in Turkey, of which 4 areinternational companies.
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There are 10 different companies and 12 differentfacilities that produce raw materials (1/2)
Source: IEGM*has 2 facilities
Th 10 diff i d 12 diff
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There are 10 different companies and 12 differentfacilities that produce raw materials (2/2)
Company
Major Products
Sandoz Pregabalin, pantoprozol sodium, pantoprazole sodium effective alternative production of application underartcle valnemulin hydrochlorid active actve substance and intermediate product rosuvastatin ohl,Paracetamol, Paracetamol DC 90%, Paracetamol DC 96%, potassium alendronate, rabeprazole sodium,sertraline HCl, Synthon C, simvastatin, Sulfamethaxozole, trimethoprim, amlodipine maleate, atorvastatinATV-44, benzalkonium Chloride, ketoconazole, metformin hydrochloride, Mephenoxalone, Mile 2000,naproxen sodium, omeprazole, omeprazole magnesium, inhaled Citrate, Tadalafil adsorbate, Naftifinhydrochlord
Ulkar Kimya methyL hydroxy benzothiazide, lansoprazole micropellets, salbutamol micropellets, dimethylglcne,etamsylate, enalapril maleate, astemizole, lansoprazole, colosantel, theophylline pellet, Etodolac,
ketoconazole, nifuroxazide, acyclovir, famotidine, indomethacin micropellets, Ciprofloxacin hcl,difluoromethyl benzimidazole, 4 - (4 - methyl sulphonyl phenyl) -2 (5H)-furanone, risperidone,micropellets fenofibrate, itraconazole micropellets, mephenamic Acid, ranitidine HCL, butyl chloroimidazole, budesonide, omeprazole pellets, omeprazole, Valacyclovir, atorvastatin calcium, irbesartan,zolendonik acid monohydrate, candesartan cilexetil, aripiprazole 5 difluromethoxy - 2 (3-4 dimetoxybenzimidazole-2-prydilmetyl sulphonyl, olmesartan Medoxomil, duloxetine micropellets
Yeni Recordati lave Hammaddeleri
Helmitol (methenamine anhidrometilencitrat)
Atabay Kimya Crystal paracetamol, oseltamivir, acetylcysteine, aripiprazole
Konya eker Medicinal products for human use and sugar manufacturng for use in the producton of liquid and inert
Source: IEGM
Alth h T k i l i b hi d i t f
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Total raw materials exports were more than CAGR9% from 2008 to 2012 surpassing USD 113 million,while imports increased CAGR 3% during the sameperiod with more than USD 1.6 billion.
Turkeysgeographical location allows cultivation ofmany different plants that can be used as rawmaterials in the pharmaceutical sector.
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Although Turkey is lagging behind in terms of rawmaterials produced, its exports have been on the rise
0
30
60
90
120
150
2008 2009 2010 2011 2012
Figure 26: Foreign Trade Statistics of Raw Materialsin Turkey
USD
Million
CAGR9%
Source: AIFD
Th Ph ti l P d ti I d t j t h
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The Pharmaceutical Production Index trajectory hasbeen increasing and new investments are needed toexpand capacity
75,170,9 72,3
74,870,6
50
75
100
2008 2009 2010 2011 2012
Figure 27: Capacity Utilization Rates inPharmaceutical Sector Yearly Average
TurkStat NACE Rev.2 Code 21, Manufacture of Basic Pharmaceutical Products and
Pharmaceutical Preparations
75
100
125
150
2010 2011 2012
Industrial Production Index Revenue Index
TurkStat NACE Rev.2 Code 21
2013 data from Q1 and Q2.
Figure 28:Industrial Production Index andRevenue Index (2010=100)
In the manufacture of basic pharmaceuticalproducts and pharmaceutical preparations, the
average capacity utilization rate for the first sixmonths of 2012 was 70.5%, this amount increasedto 71.0% during the same period in 2013.
The production index value for the manufacture ofbasic pharmaceutical products and pharmaceutical
preparations increased steadily through 2012,increasing over 23% and reaching 123.2 points bythe end of that year.
Since 2010, the revenue index for thepharmaceutical sector decreased about 1.2% andfell to 98.8 points in 2011. However, in 2012 theindex increased again by 10.3% and reached 109points.Source: CBRT, TurkStat, Deloitte Analysis
T k ' h ti l f t i b i
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The manufacturing process is heavily regulated by
governmental institutions in the pharmaceuticalsector to ensure that the drugs are safe forconsumption.
A market share of 80% in terms of sales value is
held by the top 30 pharmaceutical companies.
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Turkey's pharmaceutical manufacturing base isexpanding as exports grew at a CAGR of 9%
# CompanyMarket Share
(2012)
1 Abdi brahim 7.5%
2 Novartis 7.0%3 Sanofi 5.8%
4 Bilim 4.9%
5 Pfizer 4.3%
6 Bayer 4.3%
7 Eastpharma 3.8%
8 Glaxo 3.7%
9 Roche 3.4%
10 AstraZeneca 3.0%
Top Ten Total 47.6%
Table 8: Top 10 Pharmaceutical ManufacturingCompanies in Turkey
0,0
0,6
1,2
1,8
2,4
3,0
3,6
2008 2009 2010 2011 2012
USD
Billio
n
Export Import
Figure 29: Foreign Trade of Finished Medicinein Turkey
Turkeys finished medicine exports grew at animpressive CAGR of 9% to more than USD 550million, while imports decreased by a CAGR of 2%to a little less than USD 2.7 billion.
Source: AIFD
Th bli l fi d S i l S it S t l
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86% 83% 82% 82% 79% 77% 77% 75% 72% 65% 65% 65%48%
6% 10% 16% 14% 18% 13% 15% 19% 20% 26% 31% 27%
12%
8% 7% 2% 4% 3% 10% 8% 6% 8% 9% 4% 8% 41%
0%
20%
40%
60%
80%
100%
120%
Public Out of Pocket Other Private
The publicly financed social security system plays acritical role in the provision of healthcare servicesin Turkey. As apparent from the OECDcomparisons, Turkey has a high share of publichealthcare spending at 77%. This is higher thanthe OECD average of 72%.
Out of pocket spending is also relatively low inTurkey at only 15%, compared to the OECDaverage of 20%. Whereas, other private financingis on level with the OECD at 8%.
As a welfare state, Turkey has strived to makehealthcare services more accessible to all of itscitizens through equal and fair conditions. In linewith this, social security coverage reached 99% in2012.
The state also paid health premiums for the low-income portion of the population, which not onlyleads to an expanding healthcare sector, since thenumber of visits to healthcare facilities increase,but also allows for the utilization of healthcareservices in a more equitable and fair manner.
The publicly financed Social Security System plays acritical role in the provision of healthcare services andthe realization of strategic plans and targets
Figure 30: Health Expenditure by Financing Type in Selected OECD Countries, 2011
Note: Data for Turkey is for 2012.
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Source: MoH, OECD
Foreign companies play an important role in the
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Multinationals with manufacturing facilities
operating in Turkey include Sanofi, Baxter,Bayer, GSK, Novartis, Pfizer and Roche, withthe recent entry to the market being EastPharma.Leading multinationals such as Pfizer, Novartis,Bayer and Roche command market shares of 4-6%each. Baxter runs a 50:50 joint venture (JV) withEczacbai (Eczacba-Baxter Hospital SupplyInc.). Their products and services covernephrology, haematology, oncology, surgery,anaesthesia and intensive care departments in
hospitals, as well as in blood banks and privatehemodialysis centers.
International firms are represented by thePharmaceutical Manufacturers Association ofTurkey (ES),which also includes domestic firms.The association's membership stands at 60, withleadership coming from leading domestic playerEczacba. Pharmaceutical production is theprimary activity of ESs local and multinational
members.
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Foreign companies play an important role in themanufacturing phase
Figure 31: Selected Member Companies,
ES
Pharmaceutical Manufacturing:
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Pharmaceutical Manufacturing:Major Players
Source: ISO 500
GlaxoSmithKline GlaxoSmithKline (GSK) is
a global pharmaceuticalcompany operatingacross 40 countries with102 production facilitiesand 42,000 employees.
GSK announced sales ofGBP 28.4 billion in 2010.
GSK has been operatingin Turkey for over 50years and has 10 officesacross the country.
GSK has made Turkey itsregional base andIstanbul its headquartersfor the MEA region.
Novartis Novartis is a global
pharmaceutical companybased in Switzerland.
Novartis Turkey beganoperating in Turkey in1997. It bought aproduction from Rochefacility in Gebze in 2007.
Alexandre Jetzer-Chung,a board member of thecompany, expressed thecompany's plan to open aproduction facility inTurkey so they could selltheir products in theMiddle East, Central Asiaand Africa.
Bayer Bayer is a German
pharmaceutical companybased in Germany.
Bayer Turkey has beenoperating in Turkey formore than 60 years andemploys 1,300 people.
Bayer Turkey has 18offices across Turkeywith its headquarterslocated in mraniye,Istanbul. Bayer Turkeyreached gross sales ofEUR 533 million in 2012.
The company hasinvested more than EUR
75 million in Turkey since2000.
Pfizer Pfizer is a global
pharmaceutical companybased in the USA.
Pfizer Turkey beganoperating in Turkey in2006. Turkey became theregional leader for theCaucasus and Central
Asia region in 2008.
Pfizer Turkey opened itsR&D center in HacettepeTeknokent in 2010.
In 2012, Pfizer opened aproduction facility inPendik that has aproduction capacity of 75
million boxes
2013 Revenue:USD 44.1 billion
2013 Revenue:USD 57.9 billion
2013 Revenue:USD 51.6 billion
2013 Revenue:USD 25.9 billion
A Success Story: Recordati
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A Success Story: Recordati
Source: Reuters
"The acquisition of Frik la is an important stepforward in our strategy to increase our businessin the emerging markets of Central and EasternEurope, where the pharmaceutical market isgrowing at rates significantly greater than thoseof the Western European market. With theacquisition of Frik la, Turkey becomes ourthird most important market after Italy andFrance. This market is expected to continuegrowing at average rates of between 10% and
13% in the next few years and we believe that,thanks to the addition of the new productsacquired for our portfolio and the launch of ourcorporate products, the growth of our Turkishoperations will exceed the market trend."
Giovanni Recordati, Chairman and CEO ofRecordati, July 2011
Dr. F. Frik was founded on November 29, 1968 by
Dr. Feridun Frik and is today one of the fastestgrowing pharmaceutical companies in Turkey. Thecompany has a core portfolio of originalprescription products both in primary care andspecialist areas and employs 350 personnel, ofwhich around 260 are medical representatives.
In July 2011, Recordati, a European pharmaceuticalgroup established in 1926, announced theacquisition of 100% of the shares of Dr. F. Frik la
A.. The transaction value was of around USD 130million. This was the second acquisition Recordatihad made in Turkey, it had previously acquiredYeni lain December 2008.
Recordati, listed on the Italian Stock Exchange, hasa total staff of over 2,800, and is dedicated to theresearch, development, manufacturingand marketing of pharmaceuticals. It hasheadquarters in Milan, Italy, operations in the mainEuropean countries and a growing presence in thenew markets of Central and EasternEurope. Consolidated revenue for 2010 was EUR728.1 million, operating income was EUR 154.8million and net income was EUR 108.6 million.
The wholesale market is dominated by two major
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The wholesale market is dominated by two majorplayers, namely Seluk Ecza and Hedef Alliance
Pharmaceutical Warehouses
According to the Pharmaceutical Warehouses andProducts that can be Stored in PharmaceuticalWarehouses legislation, pharmaceutical warehousesare not allowed to provide retail sales services inTurkey.
Warehouses can only conduct wholesale services to:
State institution and pharmacies for organizations
Private pharmacies
Other pharmaceutical warehouses Public hospitals
Private hospitals
State institutions and organizations that areeligible to procure wholesale pharmaceuticals
Healthcare centers
Private practices, private diagnosis and treatmentfacilities*
Pharmaceutical manufacturers If a pharmaceutical warehouse is established by s
real person without a pharmacology diploma, theperson establishing the warehouse must hire apharmacologist as managing director.
* Warehouses can only sell vaccines without any commercial concern
There are more than 500 pharmaceutical
warehouses in Turkey but major warehouses suchas Seluk Ecza and Hedef Alliance, bothnationwide, account for more than 75% of the totalpharmaceutical wholesale market and have over90% of the market share.
Ex-Factory Price Profit Rate of Wholesaler
< TL 10 9%
TL 10-50 8%
TL 51-100 7%
TL 101-200 4%
> TL 200 2%
Table 9: Profit Rate of Wholesaler in Turkey
The rest of the wholesalers composing around 10%
of the market are Nevzat Ecza, Dilek Ecza, GalenosIstanbul (Sanovel subs.), Galenos Ankara, YASET(Galenos Ankara subs.), Lokman, Bura, Prestij,etc.
Wholesale profit rates are regulated by the Ministryof Health.
Source: AIFD
Pharmaceutical Wholesale:
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Pharmaceutical Wholesale:Major Players
Seluk Ecza Seluk Ecza was founded
in 1958 in Konya by theKeleolu family.
It is one of the largestpharmaceuticaldistribution companies inTurkey.
It has 37% of the marketshare in pharmaceuticaldistribution.
Seluk Ecza has 5,322employees and a networkof 102 pharmaceuticalwarehouses across thecountry.
FarmaLojistik z-Sel Ecza z-Sel Ecza A.. was
established in 1977 by ajoint decision of theexecutives of the Nevzatand Seluk Ecza Deposu.
z-Sel serves thehospital market.
It has 11 sales pointsand it receives more than2,500 contracts per year.z-Sel has over 1,000clients consisting ofpublic and universityhospitals.
Nevzat Ecza Nevzat Ecza was founded
in 1962 by NevzatKarpuzcu.
The company has 24warehouses, over 1,000employees, 300 vehiclesand serves 60 citiesacross Turkey.
Nevzat Ecza was ranked219thon the Fortune 500list in 2011.
2012 Revenue:USD 2.7 billion
2012 Revenue:USD 432 million
FarmaLojistik is a jointpurchasing and logisticscompany establishedwith the participationsof Edak, Bursa,Istanbul, Guney andAnkara Ecza Koop.under the umbrella of
TEKB. FarmaLojistik works
with 58 pharmaceuticalcompanies.
It was ranked 101stonthe Fortune 500 list in2011.
2012 Turnover:USD 404 million
2012 Revenue:USD 135 million
Note: Year-end exchange rates are obtained from Central Bank of Turkey. The TL/USD value for 2011 is 1.89
Success Story: Hedef Alliance Group
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