BANU OGAWA SENIOR PROJECT DIRECTOR “HEALTH SECTOR OF TURKEY”

BANU OGAWASENIOR PROJECT DIRECTOR

“HEALTH SECTOR OF TURKEY”

OUTLINE

COUNTRY PROFILE

PHARMACEUTICAL MARKET;

-MILESTONES-PRODUCTION-INTERNATIONAL SUCCESS-TOP 10 COMPANIES OF THE SECTOR-INTERNATIONAL RATING & TENDENCIES-REGULATION-ESTABLISHING A LOCAL OFFICE-REIMBURSEMENT, PRICING & DISTRIBUTION

TURKISH HOSPITAL STRUCTURE

R&D

COMMERCIAL INSURANCE ENVIRONMENT

COUNTRYINFORMATION

2007 2008 2009

Population(million)

70.60 71.5 NA

GDP Growht, % 4.70 0.90 - 7.00

Inflation (CPI), % 8.39 10.06 5.08

Unemployment 9.90 11.00 12.80(as of 2009 July)

Source: TUIK, 2009

- PRESCRIBED PHARMACEUTICAL MARKET OF TURKEY -

2008

MARKET VOLUME (in bln. €) 6.35

MARKET VOLUME (in bln. units) 1.38

NUMBER OF PHARMACEUTICAL PRODUCTs IN THE MARKET 7 155

NUMBER OF PRESCRIBED PHARMACEUTICAL PRODUCTs IN THE MARKET

4 971

-RAPID GROWTH IN 5 YEARS-RAPID GROWTH IN 5 YEARS

-25 000 EMPLOYEES IN THE PHARMACEUTICAL SECTOR-25 000 EMPLOYEES IN THE PHARMACEUTICAL SECTOR

- HIGH LEVEL OF TECHNOLOGY & AUTOMATION

- HIGH LEVEL OF TECHNOLOGY & AUTOMATION

Source:IEIS

- TURKISH PHARMACEUTICAL INDUSTRY:MILESTONES -

2008

1952-1972

BEGINNING OF THE “INDUSTRIAL PERIOD” FORMATING OF THE MODERN MANUFACTURING FACILITIES RAW MATERIAL MANUFACTURING STARTS 95% OF ALL PRODUCTS LOCALLY PRODUCED

1972-1990

STAGNATION PERIOD UNTIL 1984 MULTINATIONAL COMPANIES LEAVING INTRODUCTION OF GOOD MANUFACTURING PRACTICES

1990-2003 MARKET GROWING BY 10% PER YEAR INSTABLE PRICING AND REIMBURSEMENT POLICIES

SINCE 2004

NEW PRICING REGULATION BASED ON REFERENCES PRICES VAT RATE REDUCED TO 8% NEW REGISTRATION REGULATION INTRODUCED DATA EXCLUSIVITY FOR ORIGINAL PRODUCTS

Source:IEIS

- TURKISH PHARMACEUTICAL SECTOR:PRODUCTION -

GOOD MANUFACTURING PRACTICES (GMS) APPLICATION

ALMOST EU-COUNTRIES COMPARABLE TECHNOLOGICAL LEVEL

(EXCEPT BIOTECHNOLOGY AND A FEW NEW PHARMACEUTICAL BRANDS)

APPR. 300 ENTITIES OPERATING

43 MANUFACTURING FACILITIES (INCL. 14 MULTINATIONAL FIRMS)

GOOD MANUFACTURING PRACTICES (GMS) APPLICATION

ALMOST EU-COUNTRIES COMPARABLE TECHNOLOGICAL LEVEL

(EXCEPT BIOTECHNOLOGY AND A FEW NEW PHARMACEUTICAL BRANDS)

APPR. 300 ENTITIES OPERATING

43 MANUFACTURING FACILITIES (INCL. 14 MULTINATIONAL FIRMS)

MAJOR DISTRIBUTION REGION - MARMARA REGION, ESPECIALLY:

- ISTANBUL - KOCAELI - TEKIRDAG

MAJOR DISTRIBUTION REGION - MARMARA REGION, ESPECIALLY:

- ISTANBUL - KOCAELI - TEKIRDAG

MAJOR TURKISH MANUFACTURERs:

- EIS-ECZACIBASI- TEKIRDAG- ABDI IBRAHIM- FAKO- ILSAN-ILTAS- MUSTAFA NEVZAT- IBRAHIM ETHEM- BILIM

MAJOR TURKISH MANUFACTURERs:

- EIS-ECZACIBASI- TEKIRDAG- ABDI IBRAHIM- FAKO- ILSAN-ILTAS- MUSTAFA NEVZAT- IBRAHIM ETHEM- BILIM

Source:IEIS

ILSAN-ILTAS IS WELL-KNOWN FOR ITS KNOW-HOW IN PELLET-DEVELOPMENT

MUSTAFA-NEVZAT PLANTS GOT INTERNATIONAL ACCREDITATION. IT IS A FIRST TURKISH PHARMACEUTICAL COMPANY. THE COMPANY SIGNED SEVERAL STRATEGIC PARTNERSHIP AGREEMENTS WITH LEADING US GENERIC COMPANIES FOR MARKETING AND SALES OF ITS PRODUTCS

ILSAN-ILTAS IS WELL-KNOWN FOR ITS KNOW-HOW IN PELLET-DEVELOPMENT

MUSTAFA-NEVZAT PLANTS GOT INTERNATIONAL ACCREDITATION. IT IS A FIRST TURKISH PHARMACEUTICAL COMPANY. THE COMPANY SIGNED SEVERAL STRATEGIC PARTNERSHIP AGREEMENTS WITH LEADING US GENERIC COMPANIES FOR MARKETING AND SALES OF ITS PRODUTCS

EXPORT TO 140 COUNTRIES,INCL.:- GERMANY- USA- UK- SWITZERLAND- THE NETHERLANDS

EXPORT TO 140 COUNTRIES,INCL.:- GERMANY- USA- UK- SWITZERLAND- THE NETHERLANDS

- TURKISH PHARMACEUTICAL INDUSTRY:INTERNATIONAL SUCCESS -

Source:IGEME

MAY 2009 GROWTH MARKET SHARE

ABDI IBRAHIM 1 018 21% 7.1%NOVARTIS 957 20% 6.6%

SANOFI-AVENTIS 693 7% 4.8%BILIM 642 13% 4.4%GSK 640 21% 4.4%

PFIZER 626 12% 4.3%BAYER 530 12% 3.7%

ASTRA ZENECA 496 11% 3.4%EASTPHARMA 475 0% 3.3%

SANOVEL 456 12% 3.2%

Source:AIFD

- TURKISH PHARMACEUTICAL INDUSTRY:TOP 10 COMPANIES -

SHARE OF GLOBAL SALES (2013)

SHARE OF GLOBAL SALES (2013)

2000 2007 20121 USA USA USA2 JAPAN JAPAN JAPAN3 FRANCE FRANCE FRANCE4 GERMANY GERMANY GERMANY5 ITALY ITALY CHINA6 UK UK ITALY7 SPAIN SPAIN UK8 CANADA CANADA BRAZIL9 BRAZIL CHINA SPAIN

10 CHINA BRAZIL CANADA11 MEXICO MEXICO TURKEY12 S.KOREA S.KOREA INDIA13 AUSTRALIA TURKEY S. KOREA14 INDIA INDIA MEXICO

...

28 TURKEY

Source: IMS Health

- TURKISH PHARMACEUTICAL INDUSTRY:INTERNATIONAL RATING -

- TURKISH PHARMACEUTICAL INDUSTRY: REGULATIONS -

PATENT PROTECTION

DATA EXCLUSIVITY

PRICING & REGISTRATION

GOOD MANUFACTURING PRACTICES (GMP)

GOOD LABORATORY PRACTICES (GLP)

GOOD CLINICAL PRACTICES (GCP)

BIO-AVAILABILITY / BIO-EQUIVALENCY

PACKAGING LABELLING

PROMOTION / ADVERTISING

DRUG RESEARCH & MEDICINAL PRODUCT REGISTRATION

STABILITY REQUIREMENTS

REGULATION ON GOOD DISTRIBUTION & STORAGE PRACTICES

PHARMA-COVIGILANCE

PATENT PROTECTION

DATA EXCLUSIVITY

PRICING & REGISTRATION

GOOD MANUFACTURING PRACTICES (GMP)

GOOD LABORATORY PRACTICES (GLP)

GOOD CLINICAL PRACTICES (GCP)

BIO-AVAILABILITY / BIO-EQUIVALENCY

PACKAGING LABELLING

PROMOTION / ADVERTISING

DRUG RESEARCH & MEDICINAL PRODUCT REGISTRATION

STABILITY REQUIREMENTS

REGULATION ON GOOD DISTRIBUTION & STORAGE PRACTICES

PHARMA-COVIGILANCE

- THE PRODUCTION AND MARKETING OF ALL

PHARMACEUTICALS MUST BE AUTHORIZED BY THE MINISTER OF HEALTH

- THE PRODUCTION AND MARKETING OF ALL

PHARMACEUTICALS MUST BE AUTHORIZED BY THE MINISTER OF HEALTH

- PHARMACEUTICAL PRODUCTS AND FIRMS MUST

BE REGISTERED IN THE MINISTRY

- PHARMACEUTICAL PRODUCTS AND FIRMS MUST

BE REGISTERED IN THE MINISTRY

Source:IEIS

- TURKISH PHARMACEUTICAL INDUSTRY: ESTABLISHING A LOCAL OFFICE -

1. CONTROL OF COMPANY NAME AND TITLE

2. PREPARATION OF COMPANY MAIN CONTRACT

3. COMPANY ESTABLISHMENT (ADDITION TO LETTER OF APPLICATION & DOCUMENTS REQUESTED BY CHAMBER OF COMMERCE)

4. PAYMENT OF CHAMBER OF COMMERCE SHARE (4/10000 OF CAPITAL)

5. REGISTRATION OF COMPANY

6. PUBLICATION OF COMPANY IN TRADE REGISTRY GAZETTE

7. SIGNATURE SPECIMEN OF GENERAL MANAGER

8. APPLICATION FOR TAX ACCOUNT NUMBER

9. RECEIVING AND APPROVAL OF THE BOOKS

10. COMPOSITION OF EXAMINATION RECORD

11. RECEIVING TAX ACCOUNT NUMBER

12. PRINTING INVOICE, SHIPPING BILL AND EXPENSE BILL

13. REGISTRATION TO RELATED CHAMBERS

14. GETTING THE WORK PERMISSION CERTIFICATE, WEEKLY HOLIDAY CERTIFICATE

1. CONTROL OF COMPANY NAME AND TITLE

2. PREPARATION OF COMPANY MAIN CONTRACT

3. COMPANY ESTABLISHMENT (ADDITION TO LETTER OF APPLICATION & DOCUMENTS REQUESTED BY CHAMBER OF COMMERCE)

4. PAYMENT OF CHAMBER OF COMMERCE SHARE (4/10000 OF CAPITAL)

5. REGISTRATION OF COMPANY

6. PUBLICATION OF COMPANY IN TRADE REGISTRY GAZETTE

7. SIGNATURE SPECIMEN OF GENERAL MANAGER

8. APPLICATION FOR TAX ACCOUNT NUMBER

9. RECEIVING AND APPROVAL OF THE BOOKS

10. COMPOSITION OF EXAMINATION RECORD

11. RECEIVING TAX ACCOUNT NUMBER

12. PRINTING INVOICE, SHIPPING BILL AND EXPENSE BILL

13. REGISTRATION TO RELATED CHAMBERS

14. GETTING THE WORK PERMISSION CERTIFICATE, WEEKLY HOLIDAY CERTIFICATE

Source:MINISTRY OF HEALTH

- TURKISH PHARMACEUTICAL INDUSTRY: REIMBURSEMENT, PRICING & DISTRIBUTION -

EYE DROPS

PANSIRON BRAND MEDICINE

COLD REMEDIES

DERMAL MEDICINE

HAY FEVER

EYE DROPS

PANSIRON BRAND MEDICINE

COLD REMEDIES

DERMAL MEDICINE

HAY FEVER

PRICE CONTROL BY MINISTRY OF HEALTH (REFERENCE PRICING SYSYTEM)

MOSTLY REIMBURSED

PHARMACY SALES ONLY

DETAILING ONLY TO PROFESSIONALS & AD`S ONLY IN MEDICAL MAGAZINES

PRICE CONTROL BY MINISTRY OF HEALTH (REFERENCE PRICING SYSYTEM)

MOSTLY REIMBURSED

PHARMACY SALES ONLY

DETAILING ONLY TO PROFESSIONALS & AD`S ONLY IN MEDICAL MAGAZINES

FDA DOSSIER NEEDS TO BE CONVERTED TO EU-CTD FORMAT

PRE-FILLING: 3 MONTHS, INCLUDING TRANSLATION

OFFICIAL TARGET: 240 DAYS

REALITY: 18-24 MONTHS FOR GENERICS, 24-30 MONTHS FOR ORIGINALS

GMP INSPECTION !

FDA DOSSIER NEEDS TO BE CONVERTED TO EU-CTD FORMAT

PRE-FILLING: 3 MONTHS, INCLUDING TRANSLATION

OFFICIAL TARGET: 240 DAYS

REALITY: 18-24 MONTHS FOR GENERICS, 24-30 MONTHS FOR ORIGINALS

GMP INSPECTION !

Rx STATUS

(18-30 months)

Rx STATUS

(18-30 months)

Source:MINSITRY OF HEALTH


EYE WASHES

CONTCT LENS CARE

NAMED AS “INTERMEDIATE PRODUCTS”

EYE WASHES

CONTCT LENS CARE

NAMED AS “INTERMEDIATE PRODUCTS”

PRICE CONTROL;

o BY MINISTRY OF HEALTH

PRICE CONTROL;

o BY MINISTRY OF HEALTH

DOSSIER SHOULD INCLUDE;

FORMULA

CONTROL OF STARTING MATERIALS

MANUFACTURING METHOD

FINISHED PRODUCT CONTROLS

PIL

INNER & OUTER PACKAGE

DOSSIER SHOULD INCLUDE;

FORMULA

CONTROL OF STARTING MATERIALS

MANUFACTURING METHOD

FINISHED PRODUCT CONTROLS

PIL

INNER & OUTER PACKAGE

NON-Rx STATUS

(18-24 months)

NON-Rx STATUS

(18-24 months)



VITAMINS, MINERALS, HERBAL PRODUCTS

REGULATORY PROCESS IS RELATIVELY SHORT

NO PRICE CONTROL

NO REIMBURSEMENT

VITAMINS, MINERALS, HERBAL PRODUCTS

REGULATORY PROCESS IS RELATIVELY SHORT

NO PRICE CONTROL

NO REIMBURSEMENT

FOOD SUPPLEMENTs

(Ministry of Agriculture,2-4 months)

FOOD SUPPLEMENTs

(Ministry of Agriculture,2-4 months)

LIP CARE

HAND / BODY / SUN CARE

PARFUMES

LIP CARE

HAND / BODY / SUN CARE

PARFUMES

DERMO-COSTMETICS

(Ministry of Health,2-4 months)

DERMO-COSTMETICS

(Ministry of Health,2-4 months)


- TURKISH PHARMACEUTICAL INDUSTRY: REIMBURSEMENT & PRICING(AS OF 18TH OF MAY, 2009) -

REFERRED TO CHEAPEST EX-FACT PRICE AMONG ITALY, PORTUGAL, GREECE, SPAIN, FRANCE OR THE SOURCE (MANUFACTURING & SUPPLY) COUNTRY PRICE

PLANTS TO EXPAND TO 10 COUNTRIES (POLAND & HUNGARY!)

GREECE ALREADY REFERS TO HUNGARY; SO TURKEY REFERS INDIRECTLY TO HUNGARY

REFERRED TO CHEAPEST EX-FACT PRICE AMONG ITALY, PORTUGAL, GREECE, SPAIN, FRANCE OR THE SOURCE (MANUFACTURING & SUPPLY) COUNTRY PRICE

PLANTS TO EXPAND TO 10 COUNTRIES (POLAND & HUNGARY!)

GREECE ALREADY REFERS TO HUNGARY; SO TURKEY REFERS INDIRECTLY TO HUNGARY

ORIGINALS WITH GENERICS - 60% OF REFERENCE PRICE

ORIGINALS WITHOUT GENERICS – 100% OF REFERENCE PRICE

ANY DECREASE IN REFERENCE COUNTRY PRICE SHOULD BE IMPLEMENTED IN 3 MONTHS

€/TRY CONVERSION IS FIXED

ORIGINALS WITH GENERICS - 60% OF REFERENCE PRICE

ORIGINALS WITHOUT GENERICS – 100% OF REFERENCE PRICE

ANY DECREASE IN REFERENCE COUNTRY PRICE SHOULD BE IMPLEMENTED IN 3 MONTHS

€/TRY CONVERSION IS FIXED

SEGMENTDIFFERENCES

SEGMENTDIFFERENCES

Source:AIFD

- TURKISH PHARMACEUTICAL INDUSTRY: REIMBURSEMENT -

Approval may take 3-9 months

Approval may be based on various restrictions

SGK announces annual reimbursement rules (RUT) changing twice a year

Approval may take 3-9 months

Approval may be based on various restrictions

SGK announces annual reimbursement rules (RUT) changing twice a year

After registration, the product is be submitted to Social Security Institution

(SGK)

After registration, the product is be submitted to Social Security Institution

(SGK)

REIMBURSEMENTREIMBURSEMENT

Rx Products are reimbursed as 80%

Non-Rx category (food supplement and dermo-cosmetics) are not reimbursed

The reimbursement is 15% of original product price, if there is a generics as of 1st of August 2009. The remaining sum is be paid by the patient

Rx Products are reimbursed as 80%

Non-Rx category (food supplement and dermo-cosmetics) are not reimbursed

The reimbursement is 15% of original product price, if there is a generics as of 1st of August 2009. The remaining sum is be paid by the patient

MANDATORY DISCOUNTs(18TH of September, 2009)MANDATORY DISCOUNTs(18TH of September, 2009)

24% for Originals without Generics

11% for Originals with Generics

24% for Drugs categorized as 20 years old with an equivalent group and a retail selling price higher than TRY 10,- until a reference price is assigned

24% for Originals without Generics

11% for Originals with Generics

24% for Drugs categorized as 20 years old with an equivalent group and a retail selling price higher than TRY 10,- until a reference price is assigned


- TURKISH PHARMACEUTICAL INDUSTRY: DISTRIBUTION -

ALL DRUGS ARE TO BE SOLD IN PHARMACIES

ALL DRUGS ARE TO BE SOLD IN PHARMACIES

MANUFACTURER OR IMPORTER

MANUFACTURER OR IMPORTER

PHARMACEUTICAL WHOLESALER

PHARMACEUTICAL WHOLESALER PHARMACIES PHARMACIES

THE PHARMACIST SHOULD ALWAYS BE IN THE PHARMACY

THE PHARMACIST SHOULD ALWAYS BE IN THE PHARMACY

THERE ARE NO CHAIN PHARMACIES. A PHARMACIST

CAN ONLY OWN ONE PHARMACY

THERE ARE NO CHAIN PHARMACIES. A PHARMACIST

CAN ONLY OWN ONE PHARMACY

ONLY SOME VITAMINS ARE SOLD IN GROCERY STORES LICENSED BY MINISTRY OF AGRICULTURE INSTEAD OF

MINISTRY OF HEALTH

ONLY SOME VITAMINS ARE SOLD IN GROCERY STORES LICENSED BY MINISTRY OF AGRICULTURE INSTEAD OF

MINISTRY OF HEALTH


- TURKISH PHARMACEUTICAL INDUSTRY: HOSPITALs -

1 205 HOSPITALS WITH 192 685 BED CAPACITY (2006)

1 205 HOSPITALS WITH 192 685 BED CAPACITY (2006)

AN IMPORTANT NEW TREND:ATTRACTING PATIENTS FROM

EUROPE (MAINLY, UK) OR MIDDLE EAST FOR A

TREATMENT IN TURKISH PRIVATE HOSPITALS

AN IMPORTANT NEW TREND:ATTRACTING PATIENTS FROM

EUROPE (MAINLY, UK) OR MIDDLE EAST FOR A

TREATMENT IN TURKISH PRIVATE HOSPITALS

AVERAGE CAPACITY UTILIZATION – 60% (2006)

AVERAGE CAPACITY UTILIZATION – 60% (2006)

- TURKISH HOSPITAL STRUCTURE (2008) -

NUMBER OF HOSPITALS

NUMBER OF BEDS

SHARE

PUBLIC 894 138 217 87%PRIVATE 400 20 938 13%

MoHMEDICAL SCHOOLS PRIVATE TOTAL

2000 17 655 7 204 4 226 290 8522006 23 808 10 447 6 786 41 041

- NUMBER OF DOCTORS IN TURKEY (2006) -


- TURKISH PHARMACEUTICAL INDUSTRY: R&D and INNOVATION PERFORMANCE -

SINCE 2002SINCE 2002

Share of R&D expenditures in GDP has increased from 0.53% to 0.71%

The number of R&D personnel increased from 29 000 to 83 000

The number of scientific publications increased from 10 000 to 22 000

The number of patent application increased from 85 to 357

Share of R&D expenditures in GDP has increased from 0.53% to 0.71%

The number of R&D personnel increased from 29 000 to 83 000

The number of scientific publications increased from 10 000 to 22 000

The number of patent application increased from 85 to 357

INVESTMENT TO CLINICAL RESEARCH IN TURKEY

INVESTMENT TO CLINICAL RESEARCH IN TURKEY

20 Pharma-Companies (250 employees in total)

2 Associations playing a key role

12 CRO’s

Total Investment: $ 40-60 mln.

20 Pharma-Companies (250 employees in total)

2 Associations playing a key role

12 CRO’s

Total Investment: $ 40-60 mln.

Source:AIFD

- TURKISH PHARMACEUTICAL INDUSTRY: COMMERCIAL INSURANCE -

THE INSURANCE SECTOR IN TURKEY IS STILL SMALL, BUT IT IS RAPIDLY GROWING

TOTAL PREMIUM AMOUNT GENERATED BY THE SECTOR WAS $ 6.7 BLN. WITH A GROWTH OF 16%

THERE ARE 54 INSURANCE AND 2 RE-INSURANCE COMPANIES OPERATING IN TURKEY

21 INSURANCE COMPANIES WORK IN THE LIFE-INSURANCE SECTOR

33 INSURANCE COMPANIES WORK IN THE NON-LIFE SECTOR

THE INSURANCE SECTOR IN TURKEY IS STILL SMALL, BUT IT IS RAPIDLY GROWING

TOTAL PREMIUM AMOUNT GENERATED BY THE SECTOR WAS $ 6.7 BLN. WITH A GROWTH OF 16%

THERE ARE 54 INSURANCE AND 2 RE-INSURANCE COMPANIES OPERATING IN TURKEY

21 INSURANCE COMPANIES WORK IN THE LIFE-INSURANCE SECTOR

33 INSURANCE COMPANIES WORK IN THE NON-LIFE SECTOR

Source:IGEME

THANK YOU VERY MUCHFOR YOUR ATTENTION

BANU OGAWA SENIOR PROJECT DIRECTOR “HEALTH SECTOR OF TURKEY”

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