Pharmaceuticals industry in Turkey

Automation & RoboticsIndustrySouth-East European INDUSTRIAL Мarket - issue 1/2017

Pharmaceutical manufacturing, with its direct implications in the quality of human life, its high added value and cutting-edge technology, its experienced workforce and export potential, has been named a strategically important industry for its social and economic impacts in most countries around the globe - and Turkey is one of them.

Dictated by the expansion of the country’s medical needs, the landscape of the Turkish pharmaceutical industry has changed quickly following the reform of the country’s healthcare sector necessitated by the Turkish Ministry of Health’s Health Transformation Program.

The country’s Pharmaceutical Manufacturers Association (IEIS) claims that Turkey’s pharmaceutical industry provides more than 11 thousand kinds of products, which are being manufactured at different 67 facilities by international standards. Approximately 300 companies and 31 thousand employees are involved in the industry.

According to the Association, years and years of production experience have engendered the industry so that it is strongly committed to upholding international quality standards. As a result, the manufacturing process itself is heavily regulated by governmental institutions in the pharmaceutical sector, which ensure that all produced medicine is safe for consumption; the cutting-edge technology deployed within the sector ensures quality on part with products in developed markets. Official papers show that the industry’s footprint extends to 160 countries, which include European Union (EU) members, countries from the Commonwealth of Independent States (CIS), the Middle East, and North Africa.

Within the last couple decades the country’s total pharmaceutical sector has grown larger and the major local players have flourished accordingly. Even though the pharmaceutical market is dominated by international companies, accounting for 31,5% of the total market in 2012 as revealed by IEIS and the foreign investment agency of Turkey, local manufacturers such as Abdi Ibrahim (with a market share of 7,5%) and Bilim Ilac (market share of 4,9%) had also held considerable shares in 2012. Above all, the market is heavily fragmented based on the fact that there are approximately 300 pharmaceutical companies in Turkey.

In terms of the concentration on the entire market, the number of the foreign firms operating in the Turkish market increased from 73 in 2009 to 118 in 2015, show official reports for the industry. Within the same period nearly 100 local firms accessed the market, leading to peak the number of local firms reaching 337 in 2015.

Market concentration also intensified, and while 45 companies made up 90% of the total market for pharmaceuticals in 2009, six years later, in 2015 about 60 companies controlled this same proportion. Within the pharmaceutical market of Turkey, the share of the prescription and non-prescription drugs has declined while that of the non-pharmaceutical products has increased. It has been observed that non-reimbursed products have also grown within the last six years.

Foreign Trade
The industry exports various products to 160 countries, most of which are in the European Union (EU), the Middle East and North Africa region (MENA), and the Commonwealth of Independent States (CIS). These exports have significantly accelerated since 2015, and during the same year pharmaceutical exports increased by 9,1% even though Turkey’s total exports declined by 8,7%.

The export of pharmaceuticals amounted to 474 million US dollars in 2009 and by 2015 had increased by 96%, reaching USD 921 million in 2015. In the same period, Turkey’s total exports grew by 41%. The Pharmaceutical Manufacturers Association of Turkey compiled this data and determined that with contribution of the pharmaceutical industry, which is exporting nearly twice as much as total national exports, to the Turkey’s total export increased from 0,46% to 0,64%.

On the other hand, IEIS also notes that pharmaceutical imports have not increased significantly in the last six years and growth rate has become overall 4,1%. For the period from 2013 to 2014 imports have actually increased, but then they have dropped to the level of 2,7% in 2015 and about USD 4,61 billion.

Overall, the industry complies with modern international standards in terms of its production technologies, capacity and qualified human resources. With its 67 production facilities, approximately 300 companies and 30,000 employees, the produces approximately 11,500 products.

Turkey’s market of pharmaceutical raw materials is also significantly large. The Investment Support and Promotion Agency of Turkey reveals that there are 12 pharmaceutical raw material producing facilities and 10 different pharmaceutical raw material producing companies in the country, of which 4 are international companies.

The current issue of the South-East European INDUSTRIAL Market magazine includes an overview of some of the most prominent players within the Turkish pharmaceutical industry. The information covers manufacturers of raw materials, pharmaceutical ingredients, as well as finished medical products and solutions, and is based on materials provided by the companies and published on their websites.