The Pharmaceutical Industry in Turkey – 1
The Pharmaceutical Industry in the World
Before focusing on the Pharmaceutical Industry in Turkey, it can be said that by looking at the pharmaceutical industry from a commercial perspective, the foremost United States’ reality remains by far. The USA, where 65.2% of the new drugs produced in the period of 2013-2018 were sold, followed by the European markets consisting of the five of Germany, France, Italy, Spain and the UK with a share of 17.7%. The share of the “drug developing markets” (Pharmerging Markets) group, which includes 21 countries, including our country, is 1.5%.
The size of the sector at the end of 2019 is around 1.3 trillion USD. The sector, which grew by 4% compared to 2018, is expected to grow by an average of 4.5% in the 2020-2023 period, exceeding the level of 1.5 trillion USD. It is estimated that this growth momentum will be provided by advanced economies with the support of capital accumulation. On the other hand, Brazil, China and India markets, which grew by 11.4%, 7.3% and 11.2%, respectively, in the 2014-2018 period, are also considered to contribute to this movement. Nevertheless, the growth rate of the sector’s journey to the level of 1.5 trillion USD is estimated to be slower than that experienced in the 2014-2018 period.
Prescription drug sales are expected to reach $ 1.1 trillion in 2024, with a projection of approximately 7% annual growth. It is estimated that the fastest increase will be in the category of “orphan drugs” with high added value, while the increase in generic drug sales will be relatively limited. However, the share of generic drugs is decreasing. The share of generic medicines in the total prescription drug sales in 2019 reached to 7.4% in 2024; It is estimated that the share of orphan drugs, which is 16.0%, will increase to 20.2%.
When the drug sales are analyzed according to the main treatment areas, it is seen that the highest share is in oncology diseases with a great difference. As of the end of 2018, this segment has a market share of 14.3% and its 2024 market share estimate is 19.4%. This estimate indicates that one out of every five drugs sold on a value basis by 2024 will be for the treatment of cancer diseases, while its closest competitor will reach more than 4 times the sales of anti-diabetes drugs. In the 2018-2024 estimates, the two segments that are expected to surpass the oncology drugs in terms of market share compound average growth rate (CAGR) are immunosuppressants and dermatology drugs.
With its technical name, SARS-CoV-2 or 2019-nCoV, coronavirus or COVID19, as everyone knows, is the main agenda item of 2020. Technically similar to SARS virus, 80% -90% virus is considered as the new version of the severe acute respiratory syndrome epidemic.
The Clinical Research process is expected to be completed by the end of April. On the one hand, while vaccination development studies continue, on the other hand, methods that can treat the course of the disease, at least, symptoms continue to be applied.
The giants of the pharmaceutical industry are also mobilized to find a solution to COVID19. While Moderna and Johnson & Johnson are working on prophylactic vaccines, GlaxoSmithKline, one of the largest vaccine manufacturers in the world, announced that it will open a new vaccine production technology available to other companies. Despite all these efforts, the process is running very slowly, and no vaccine is expected to be produced in the near term (the process is considered to exceed 20 months).
The pharmaceutical industry in Turkey
The pharmaceutical industry in Turkey has great potential and stands out with its high-tech manufacturing capability. It has the capacity to enter the global competition with its geographical location and relatively reasonable cost structure. With these aspects, the sector, which has been given strategic importance especially by policymakers; It is considered a strong base as it does not have any problems in terms of sustainability. The sector, which stands out in terms of its place in production, employment and foreign trade volumes, regularly finds itself in incentive packages. Despite this, the sectoral foreign trade deficit and the inability to allocate sufficient resources for R&D continue to be the main problems.
In Turkey, pharmacy sales increased 25.4% in 2018 (2017: 20.4%) increase in hospital sales amounted to 30.6% (2017: 19.0%). Sales increased by 3.6% on a box basis (2017: 3.3%) to 2.3 billion boxes. In the January-September period of 2019, the volume increase reached 30.5% compared to the same period of the previous year and reached 29.5 billion TL. Only 1% increase was observed in the volume of boxes sold in the same period. In this period, it should be taken into consideration that the average prices of medicines increased by 28%.
Turkish pharmaceutical industry ranks 7th in Europe, 16th in the World as market size. Turkey has a major opportunity to become a key services and pharma products supplier for neighbouring regions with its location, with a total export potential of USD 8 billion. the market is predicted to reach TR 45.6 billion in 2023.
The Turkish pharmaceutical market reached 37,8 billion Turkish Liras (TL) in the last 12 months as of September 2019. During the same period unit sales reached 2,3 billion units.
Pharmaceutical exports reached $1218 million in the last 12 months as of September 2019.
The pharmaceutical industry in Turkey can contribute to closing the country’s trade deficit with exports of pharma products & services:
Basic & Clinical Research: service exports with USD1 bn potential
Value-added manufacturing: Pharma products and active pharmaceutical ingredients with USD 7.3 bn potential
Management & shared services centre: service exports through Liaison Offices, regional HQs or shared service centres
USD 8 billion of export value equal to 2.7% of total import in Europe, Russia, Middle East and Caucasia.
Strong production facility infrastructure: 76% of drugs consumed in Turkey on a box basis and 49% on a value basis are locally produced.
In “Vision 2023” scenario, clinical research investments are expected to reach USD 1.1 billion and total R&D investment by the pharmaceutical industry in Turkey is expected to reach USD 1.7 billion.
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