Murat Salihoğlu

Deputy Secretary General

Pharmaceutical Manufacturers Association of Turkey

2 May 2010

The Pharmaceutical Industry in Turkey

It was founded in 1964 in Istanbul with the purpose of

sustaining development of the local pharmaceutical

industry. It plays an important role in healthcare policy-making and

promotes the use of generics.

Head office is in Istanbul and a liaison office in Ankara.

It currently has 43 members.

Pharmaceutical Manufacturers Association of Turkey (IEIS)

No. of pharmaceutical companies

Multinationals

>300

56

No. of manufacturing facilities

Multinationals

42

14

Employment in the pharmaceutical industry ~ 25,000

No. of pharmaceuticals in the market ~ 5,000

Number of pharmacies ~ 23,500

Facts & Figures of The Industry

Source: IEIS, TEB

75

132

165

322

429

429

495

503

557

560

566

629

651

956

0 200 400 600 800 1000

Russia

TURKEY

Poland

UK

Australia

Italy

Germany

Spain

Canada

Greece

Belgium

Japan

France

USA

Source : United Nations,IMS Health, IEIS

Per Capita Consumption on Medicines(2009, $)

Source: IMS, IEIS

Pharmaceutical Market

860 9531.108

1.1911.312

1.370 1.422

426 473 538 588 634 661 691434 480

570 603678 709 732

0

200

400

600

800

1.000

1.200

1.400

1.600

2003 2004 2005 2006 2007 2008 2009

Total Reference Generics

Volume (mn units)

Source: IMS, IEIS

Pharmaceutical Market

3.6874.340

5.0645.240

6.208 6.342 6.536

2.4992.848

3.309 3.519

4.134 4.136 4.226

1.1881.492

1.755 1.7212.074

2.206 2.310

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

2003 2004 2005 2006 2007 2008 2009

Total Reference Generics

Value (mn €)

Volume

Value

Source: IMS, IEIS

Breakdown of Market: Originator - Generic

48,6%48.2%49.5% 49.6% 48.6% 49.3% 48.3% 51,4%51.8%50.5% 50.4% 51.4% 50.7% 51.7%

0%

20%

40%

60%

80%

2003 2004 2005 2006 2007 2008 2009

64,7%65.2%66.6%67.2%65.3%65.6%67.8%

35,3%34.8%33.4%32.8%34.7%34.4%32.2%

0%

20%

40%

60%

80%

2003 2004 2005 2006 2007 2008 2009

Originator Generic

Source: IMS, IEIS

Volume

Value

Breakdown of Market: Imports – Local

21,7%20.2%11.6% 12.7% 14.1% 15.8% 17.9%

78.3%79.8%88.4% 87.3% 85.9% 84.2% 82.1%

0%

20%

40%

60%

80%

100%

2003 2004 2005 2006 2007 2008 2009

51.9%50.1%47.9%45.2%41.0%37.1%37.3%

48.1%49.9%52.1%54.8%59.0%62.9%62.7%

0%

20%

40%

60%

80%

100%

2003 2004 2005 2006 2007 2008 2009

Imports Local

Source: IEIS, Turkish Statistical Institute

Foreign Trade

1.807

2.181 2.288

2.984 2.932

1.719

2.143

2.413 2.577

308288262249227200218165167

10,2%

9,9%

10,5%

9,7%

10,2%10,3%

9,2%

9,1%

9,7%

0

500

1.000

1.500

2.000

2.500

3.000

3.500

2001 2002 2003 2004 2005 2006 2007 2008 2009

8,0%

8,5%

9,0%

9,5%

10,0%

10,5%

11,0%

Import Export Export/Import Ratio

Export, € mn Export/Import Ratio

Source: IMS, IEIS

Therapeutic Classes Market Share (Value Basis)

Antibiotics; 19.9%

Antibiotics; 15.1%Cardiovasculars;

14.1%

Cardiovasculars; 12.5%

Antirheumatics; 10.4%

Antirheumatics; 8.2%

CNS's; 7.1%

CNS's; 7.1%

Antiasthmatics; 3.6%

Antiasthmatics; 5.5%

Oncologicals; 3.8%

Oncologicals; 7.6%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

2003 2004 2005 2006 2007 2008 2009

Regulatory Environment

Pricing• Reference Price system is in force since 2004.

• The reference price is the lowest ex-factory price among 5 EU members. Currently the reference countries are France, Greece, Italy, Portugal and Spain.

• An original product which is in reimbursement list, can be priced up to 100% of the reference until its first generic enters into the market. Then they are both priced at 66% of the reference price. This rule is applied to the products with an ex-factory price over 3.56 TL.

• The system takes also into account the Euro/TL exchange rate. A 90-day moving average is followed and more than 5% change is reflected to the prices.

Track and Trace system

• The pharmaceuticals track and trace system which enforces the companies, wholesalers, pharmacists to take technical measures (2D barcode), to control the products purchased by social security institutions have been on the agenda since 2007.

• This system was firstly described in the Regulation Regarding the Packaging and Labeling of Medicinal Products for Human Use in February 2008. However, due to the complex issues and a structure not tested anywhere, the commencement of the system has been postponed although the pharmaceutical companies have been faced with considerable financial implications arising from their investments made in accordance with this regulation.

• Currently, the problems of the system have not been solved yet and different approaches from the IEGM as well as SGK and the Pharmacists’ Associations are hindering the correct functioning of the system which results uncertainty of the payments made from the SGK.

• Though all those facts above the system will be operational starting from 1st of June

Social Security System• Social security system covers approximately 90% of the

population.

• The government is the largest buyer accounting for around 90% of the sales.

• Since 2004, the Ministry of Labour and Social Security has been working on a new structure for the social security and the general health insurance system covering the whole population.

• Three public social security institutions were united under a new single body in 2006.

Reimbursement•Reimbursement status after the marketing authorisation •Positive list •Discounts for state drug purchases;

producer discounts; 4% for those with retail price equal and/or smaller to 3.56TL 23 % for original products having no generic competition with ex-factory price greater than 3.56TL (except the first year from launch of products with new

molecules) 11% for the rest pharmacy discounts; 0% - 2.5% according their revenue

•Ongoing process of removing the OTC products from the list since 2006•Price band (cheapest +15%) on 407 active substances

• In January 2005, the licensing regulation was published in line with EU principles and was amended in April 2009.

• Accordingly, the applications must be made in CTD format and the appraisal period is limited to 210 days. Under the old regime, this period could be as long as 2 years.

• The regulation grants data exclusivity to reference products licensed in the EU starting from January 1st, 2005. The exclusivity is limited with the patent term of the

concerned molecule.

Licensing

In accordance with the new amendments in April 2009;

• Licenses will be renewed once after five years.

• In order to reduce healthcare expenditures and to ensure rapid public access to the drug, the licensing procedure shall be completed within no more than 180 days.

• The application for certain co-marketed products (where the reference product is authorised in Turkey) shall be concluded within 90 days.

• Although, the obligation of the market access permission is revoked with this amendment, the Council of State granted a stay of execution on December 15th, 2009. The final decision has not been taken yet.

Licensing

Patent 20 years patent protection was introduced in 1995

Data exclusivity6 years for products licensed in the EU starting from 01/01/2005 as well as for molecules registered in the EU from 01/01/2001 to 31/12/2004 if no generic product application exists for these molecules

Bolar Provision It was introduced in 2004

Intellectual Property Rights

THANK YOU

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