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Multinational Companies Face Protectionist Hurdles as Turkey Lays Plans to Become a Net Exporter of Pharmaceuticals

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SOURCE Decision Resources Group

Lengthy Authorization Process for Imports Could Spur Investment in Local Production, According to Findings from Decision Resources Group

BURLINGTON, Mass., July 16, 2014 /PRNewswire/ -- Decision Resources Group finds that Turkey continues to hold appeal for multinational pharmaceutical companies due to its large domestic market and strategic location as a gateway to Europe, the Middle East and Africa, but that interest is being tested. Marketing authorization that stretches into years, extremely low drug pricing and high government discounts have resulted in low profit margins and the withdrawal of certain drugs from the market. The Turkish government hopes that incentives to develop and manufacture innovative drugs in the country will allow it to depend less on imports and develop a thriving pharmaceutical export industry.

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Other key findings from the Turkey Market Access Tracker advisory service:

  • Largest pharmaceutical market in the Middle East: The Turkish pharmaceutical market is the largest in the Middle East and Africa region, the seventh largest in Europe, and the sixteenth largest in the world, mak­ing it a very important target for multina­tional pharmaceutical companies.
  • Importation barriers: Drug imports accounted for 51 percent of $8 billion in Turkish pharmaceutical sales in 2013 and represent 10 percent of Turkey's current account deficit. This has prompted the government to erect barriers to the importation of pharmaceuticals; to provide incentives to local manufacturers and exporters; and to prioritize pharmaceutical R&D and the development of innovative, higher-priced drugs on Turkish soil.
  • Increased foreign investment: Foreign companies increased their investments in the country in 2013 and 2014, with Amgen, Russia's R-Pharm and Italian drug maker Recordati all opening or expanding production facilities. Locally, Pfizer Turkey manufactures 70 percent of the products it markets in Turkey and also exports from Turkey.
  • Drug shortages and black market activity: The number of authorized but unavailable drugs in the country increased 50 percent in late 2013 as drug mak­ers withdrew some drugs from the market as profits plunged and wholesalers diverted others to more-profitable countries. Oncology drugs, in particular, are in short supply in the country, leading to an active black market and considerable counterfeit drug activity. In addition, applications to import new drugs have declined precipitously.

Comments from Decision Resources Group Analyst Taylor Holliday:

  • "Rock-bottom prices-the lowest in Europe-have led to drug shortages in Turkey, and citizen outcry has forced Turkish officials to announce they will consider flexible pricing for essential medications. But a current account deficit fueled partly by healthcare expenditures makes it unlikely that the country will increase prices across the board."
  • "Turkey is applying the carrot and stick approach to multinational drug companies: offering generous incentives for investment in the country while making it increasingly difficult to import pharmaceuticals or price them profitably. Turkey's gamble is that MNCs will value the market enough to clear the hurdles and invest in its vision of making Turkey an R&D and production hub for the region."

About Decision Resources Group
Decision Resources Group offers best-in-class, high-value information and insights on critical issues within the healthcare industry. Clients rely on this analysis and data to make informed decisions. Find out more at www.DecisionResourcesGroup.com.

All company, brand, or product names contained in this document may be trademarks or registered trademarks of their respective holders.

For more information, contact:

Decision Resources Group
Christopher Comfort
781-993-2597
ccomfort@dresourcesgroup.com

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