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					PHARMACEUTICAL
   INDUSTRY
          INTRODUCTION
• Turkey’s pharmaceutical production makes it
  16th among the world's 35 leading
  pharmaceutical producing countries.

• Turkey has the lowest pharmaceutical
  consumption rate.
   Turkish pharmaceutical industry
production is mostly realized:

under licenses agreements,
the industry has high added value,
huge production and export capacity.
HISTORY OF PHARMACEUTICAL
         INDUSTRY
  80% of the world pharmaceuticals production
      is generated by developed countries.
         Graph 1: World Pharmaceuticals Market
                                   2001(%)


                                   6
                      11,1


                 12                                       47,2




                        23,7


 North America   Europe        Japan   Africa,Asia & Australia   Latin America
 Turkish pharmaceutical industry
• Pharmaceutical industry has become one of the most
  progressive sectors in Turkey.
• 1928-1950: Fabrication period
• International pharmaceutical companies : Bayer
  (Germany), Aventis Pharmaceuticals, Inc (US), Pfizer
  (US), Roche (Switzerland), Sanofi (France) and
  Novartis (Switzerland).
• The leading Turkish manufacturers are Eczacıbaşı,
  Abdi İbrahim, Fako, İlsan İltaş, İbrahim Ethem and
  Bilim.
• Medium level of concentration which is 33,41 CR4.
       MARKET STRUCTURE
                   Market overview

• The Ministry of Health, other government hospitals,
  the Turkish Social Insurance Organization (SSK), and
  the government's Pension Fund
• Turkey’s present population is at around 67 million
• The number of people per hospital bed is 380
• There are 83,200 doctors, 77,000 nurses and 14,700
  dentists
• The number of patients per doctor is 800
• The population per dentist is 4,500
• Turkey’s annual per capita health
  expenditure is USD 160.
• Europe-wide per capita spending on health
  care goods and services is USD 2,140.
• There are 22,000 pharmacies
in Turkey.
• There are about 900 pharmacists
 graduate from university each year.
             Competition

• Local competition is quite strong.
• 134 fairly large-sized companies
• 85 are pharmaceutical producers, 11
  raw materials producers, and 38 are
  importers.
• 952 million units of drugs and 4,382
  tons of raw materials were produced in
  Turkey in 2002.
The Porter’s diamond concept in a
     pharmaceutical setting
Pharmaceutical production in Turkey

      Years              Quantity

       1998            923,000,000

       1999            1,005,000,000

       2000            1,100,000,000

       2001            925,000,000

       2002            969,000,000
          Raw Material Production
Table 4 : Production of pharmaceutical raw materials in Turkey


            Years                         Quantity
             1998                           7,076
             1999                           5,552
             2000                           4,980
             2001                           4,382
             2002                           3,909
• The production of raw materials in Turkey concentrates on many active
   ingredients of pharmaceuticals, primarily antibiotics and analgesics,
        by using fermentation, extraction and synthesis methods.



• The Turkish pharmaceutical raw materials sector is represented by 11
          plants of private sector and 1 plant of public sector.

• The major characteristics of pharmaceuticals raw materials industry
  are:
          the investments are made at a great proportion
                   by privately owned companies,
          the existing production capacity can be easily shifted
                  to various production possibilities.
                 Quality Standards
• Investments for the development of technology in
  the industry have been accelerated and today
  production technology of the Turkish
  pharmaceutical industry has reached world
  standards.

• Turkey started recognizing patents from 1995.

• Patent protected products will only become
more common between 2005 and 2007.
  Pharmaceutical Consumption in Turkey
• In 2002, sales level of pharmaceuticals in
  Turkey is US$ 2.6 billions.
• Public sector employees including civil
  servants account for almost 80% of Turkey’s
  pharmaceutical consumption.
• Antibiotics :18,2% Painkillers: 12,1%
• The factors that affect the consumption:
  Invention of new pharmaceuticals, economic
  and cultural level of the country, population
  growth, average life period, urbanization rate,
  income distribution.
     EXPLORING CONDUCT
     Pricing and paying-back policies
Prices are under control of the Ministry of Health
    THE PAYING BACK APPLICATIONS FOR
          PHARMACEUTICALS OF…
• Emekli Sandığı: Medicine expenditures of civil
  servants, their relatives, widows and orphans
• Has aggrements with 16,000 pharmacies
• SSK: It has 261 pharmacies in its structure
• Bağ-Kur: It has its own pharmacies and health
  institutions
• Medicines can be bought from contractual
  pharmacies
• Complementary social security foundations:
  Ordu Yardımlaşma Kurumu, Amele Birliği and
  İlksan
                      Foreign Trade
 • Exports: In 2003 total value of pharmaceutical industry exports
   reached US$ 220 million.

 • Imports: Turkey's pharmaceutical industry imports have shown

   an increase by years and reached to US$ 2,296 million in 2003.

             2001    2002     2003     2004    Avr. yearly growth (%)
                                                     2004-2005
 Imports     1,300   1,500    1,700    1,950            15

  Local      900     1,200    1,400    1,600            17
Production
 Exports     132      140     184       200             10

  Total      2,068   2,560    2,916    3,350            15
 Market
                          EXPORTS
•Major export products are the ones containing
               -Penicillin,
               -Antibiotics,
               -Alkaloid medicaments.


•Turkey is now exporting various pharmaceutical products to 50
countries including developed countries like ,
       Germany, the United States, Austria, Belgium, Finland,
       the Netherlands, the United Kingdom, Switzerland,
       Italy and Japan.
                           IMPORTS

• In our country the pharmaceuticals industry, as in all developed
  countries, is importing some products in finished forms.



• Major import products of the industry are medicaments
  consisting of mixed or unmixed products.



• Major countries from which pharmaceutical products imported
  are the United Kingdom, Germany, France, the United States,
  Switzerland and Italy.
                                   Investments
• The industry is continuously in loss due to unstable pricing policies

                 Graphs 2: Investments, 2001 ( US$ Millions )
                                          Investments


                   80

                   70

                   60

                   50

                   40

                   30

                   20

                   10

                        0
                            1997   1998         1999    2000   2001

            US $ Mio.       45,4   68,8          65,8   68,6    77

                                                Year
 R&D Strategies and Its Importance
• The pharmaceutical industry does not
  have enough funds to transfer on R&D
  activities in Turkey.
• In Turkey, the R&D activities for
  pharmaceutical industry should start
  immediately for the competition in
  foreign markets .
               Employment
• The number of the total employees working
  for the industry as of year 2001 is about
  20,840.
      Marketing Strategies
• Medical representatives,
  advertisements in medical, direct
  mail, academic meetings, exhibitions
  and other similar activities organized
  during such meetings, distribution of
  samples to doctors and pharmacists,
  gifts and printed promotional
  materiel.

• The advertising of medicinal products
  in newspapers without prior
  permission by the Ministry of Health
  is prohibited.
          PERFORMANCE
            Growth

• If Turkey gives importance to the
  growing up in the market and
  rearranging plans, future of the
  industry seems to be hopeful.
• The developments concentrating
  on bio-technology is expected to
  provide important contributions
  into the economy and sector.
    CONCLUSION AND FUTURE
        EXPECTATIONS
• Turkey needs to make both technical and marketing
  investments.
• It is expected that total pharmaceutical market by 10
  percent increase each year will reach to 8.292 million
  dollars in 2013.
• After 2005, the number of the original
  pharmaceuticals patented in Turkey and introduced
  to the market will increase.
            SWOT ANALYSIS
                • Strengths

- Availability of the capacity to meet the
 domestic market in conventional products,
- Availability of the conventional drug
 production technologies that all basic drugs
 can be produced,
- Availability of qualified human source,
- Production of high quality products,
- Growth of domestic market development
 (%10 annually).
               • Weaknesses

-Inability to use the full production capacity
-No R&D activity for new pharmaceuticals
-Government interference
-Weak financial resources
-Insufficient investment level
-The limited number of patents taken by
 national industry
-Inability to develop new technologies
-Inability to create funds necessary for
 expensive research
                 • Opportunities

-Rapid development of information and
 communication technologies and the easy
 access to information
-Increase in the technology transfer
 possibilities
-Positive changes in population and
 demographical structure
- As a result of globalization, the availability of
 capital seeking for investment opportunities
- The potentials gained by the our fellow
 citizens in foreign countries for new
 technologies
              • Threats

-The exponential increase of science and
 technology in the world
- Low purchasing power
- High inflation rate
- High cost of and limited credit
 resources,
- Insufficient research consciousness
 and appreciation
- Insufficient government resources
 allocated to health and education

				
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