Multinational businesses on the road to Ankara

Back in July sources reported that Zentiva, a Sanofi subsidiary for the Czech Republic, is looking forward to establishing a new plant for the development and production of generic drugs in Turkey. Also quoted by the Business Monitor International Zentiva’s senior vice president Jerome Silvestre stated: «Our facilities in Lüleburgaz, in the Thracian province of Kirklareli, received quality certification from thirteen countries. We will turn our facilities in Lüleburgaz into a production base for generic drugs by shifting the production of many drugs from facilities abroad to Turkey». Nonetheless other reasons are paving the path to the industry’s further development. According to the Internet-based news service Invest in Turkey and most of all according to sources from the national ministry of Science, industry and technology, «the country’s pharmaceutical industry will have a clear roadmap ahead in regard to cutting down costly imports of drugs while boosting local production of medicines such as the ones used in treating» many forms of «cancer and diabetes». The strategy sprung up from the acknowledgment that two years ago Ankara ended up importing some five billion dollars of medicinal products while sales abroad were only 620 million worth. «Addressing the trade deficit», said Turkish minister of Science, industry and technology mister Nihat Ergun as reported by Invest in Turkey, has today become «a priority in this strategic sector». The web-based magazine considers Turkey as the homeland of the seventh largest pharmaceutical market in Europe; and the sixteenth largest in the whole world. And has also enthusiastically introduced the 700 million American dollars deal that allowed Us-based biotech giant Amgen Inc. to acquire the Turkish generic drugs manufacturer Mustafa Nezvat, in the late spring of last year. Nihat Ergun has also suggested that the roadmap he was on about is to be considered part of a major plan aimed at boosting the national chemical and pharmaceutical industry by 2023; and once again set to attract both foreign investments and skills in the country. But let’s see what it is all about.

Eyes wide open on Vision 2023

As shown in a document signed by the Republic of Turkey’s ministry of Economy and by the General directorate of incentive implementation and foreign investment last October, meaningfully dubbed Turkey’s new investment incentive program, Ankara has ideally divided the land into six regions. Each and everyone of them will offer investors from abroad different forms of incentives including Vat refund or exemption; tax deductions and customs duty exemption. Some of them, especially for what concerns regions from one to five, are also to deal with the pharmaceutical industry and market. They are in fact aimed at «specific pharmaceutical investments and defense industry» and «with a minimum investment amount of 20 million Turkish lira or 8,6 million euro». The Vision 2023 strategy built in order to celebrate the Republic’s first century of history proved itself to be much more ambitious. As reported in a Strategy document signed by market intelligence company Pricewaterhouse Coopers or Pwc together with the Association of research-based pharmaceutical companies (Aifd) «the Turkish government aims to make Turkey one of the world’s top ten economies in health services by 2023 by increasing research and development (R&D) expenditures to 3% of Gross domestic product and by increasing exports to 500 billion Us dollars». And moreover, the Pwc and Aifd Vision 2023 report strongly underlined that «Turkey should become the Eurasian production base for medium and high level technology products». Undoubtedly there is some significant room for further growth, the strategic document suggested: «While global investment in innovative drug R&D is 120 billion Us dollars each year», it read, «Turkey’s share is only 60 million Us dollars, representing only a 0,039% of global research and development. Currently drug production in Turkey is focused around low value-added products, with high value-added products being imported. Moreover, research and development aimed at developing new molecules (i.e. core research) has never been done in Turkey. As production of innovative drug increases, the added value of the drugs produced will also increase accordingly».