Overview of Global Biopharmaceuticals Market
For the pharmaceutical industry, the 20th century was the golden era for small molecules market. Pharmaceutical companies thrived with profits generated through simple compounds and patenting them. However, as most of the small molecule products are reaching expirations in the early 21st century, pharmaceutical companies are working to find new cures and new growth segments to rejuvenate the industry. Many companies, established as well as start-ups, have found redemption through biologics.
Biologics are large molecule prescription drugs made by cells or living organisms (mammalians) used for the prevention or treatment of diseases. The biological agents are derived from many forms such as living cells, tissues, genes delivered in viruses, proteins such as antibodies, growth factors, enzymes, sugars, and nucleic acids. Gene based and cellular biologics are at the forefront of biomedical research and may be used to treat a variety of medical conditions for which no other treatments are currently available.
Biologics have revolutionised the treatment of diseases such as cancer and rheumatoid arthritis and have transformed the treatment of life threatening, debilitating diseases such as multiple sclerosis. Consequently, the key benefit has been targeting a disease which causes major physical deterioration and death, by managing the chronic condition effectively.
Biologics have an almost similar structure as the conventional small molecules market. There are the Innovative Biologics (original) and the Biosimilars (off-patent products). Many early biologics are now facing patent expirations and already facing biosimilar competition. The biosimilar market is still largely untapped and is forecast to grow rapidly driving the overall biologics market globally.
The global biologics market has grown rapidly in the last 5 years at a CAGR of above 8%, reaching 210 billion USD in 2015 (20% of the global pharmaceutical market revenues), driven by the revolutionary impact on the prevention and treatment of life threatening diseases.
By 2013, there were 120 biologic drugs active in the market, regulated by the U.S. Food and Drug Administration Center for Biologics Evaluation and Research (FDA, CBER), the Committee for Proprietary Medicinal Products (CPMP) of the European Medicines Agency (EMEA), and comparable agencies in other countries worldwide.
Overview of Turkey’s Pharmaceuticals Market
The Turkish pharmaceutical market is the 16th largest in the world and the 7th largest in Europe. It was valued at 5 billion USD in 2015 which registered a CAGR of 9% in the last 10 years, amplified by expanded public insurance, modernisation, broad prevalence of chronic diseases, and increased health awareness and affluence. However, due to rigid reimbursement and pricing policy of the government, the market faced serious challenges after 2008, with declining profits and price ceilings that did not exceed 66% of reference prices.
There are 353 pharmaceutical companies and 42 drug manufacturing facilities in Turkey, of which 53 are multinationals operating 14 manufacturing facilities. Turkey’s pharmaceutical market is dominated by international companies including Novartis, Pfizer, Bayer, and Roche among others that constituted a share of above 30% in 2015. Local manufacturers including Abdi Ibrahim (7.5%) and Bilim Ilac (4.9) were also among the top ten pharmaceutical companies in Turkey.
Overview of Turkey’s Biopharmaceuticals Market
Exhibit 1: Biotech Pharmaceutical Market Size and Growth Forecast in Turkey (TRY, billion)
Biotechnology drugs, supported by the incentive plan adopted in 2012, are a key growth area in the Turkish pharmaceutical market, poised to register a CAGR of 15% during 2013–2018. In 2012, the biotechnological drugs valued at 703.2 million USD, accounted for 11% of the total pharmaceutical market in Turkey.
The market for reference biotechnological drugs has increased by 19.4% during 2014–2015, reaching 2.57 billion TRY. There are 183 reference biotechnological drugs available in the Turkish market, constituting 16.6% of the prescription drugs revenue in Turkey.
Biosimilar drugs were non-existent in the Turkish biotechnological pharmaceuticals market prior to 2009. In 2015, however, they constituted 3% in value of all biotechnical drugs. There are currently 183 reference biotechnological drugs and 38 biosimilar drugs circulating in the Turkish pharmaceutical market. Out of the 34 biosimilars present in the market, only 13 of them (34% of the total) are being produced in Turkey. Biosimilar drugs experienced a significant 59% rise in the last two years, rounding up to 73.6 million Turkish liras in revenue.
Biosimilar drugs containing abciximab, enoxaparin sodium, epoetin alpha, erythropoietin, erythropoietin alpha, filgrastim, infliximab, and somatropin are licensed in Turkey, and among them, those produced in Turkey contain the active substances of enoxaparin sodium, epoetin alpha, and infliximab.
There are over 140 biotechnical companies in Turkey, with 56 of them serving the health sector. A large number of these companies contribute very little to research and production; instead, focus on diagnostic methods and equipment. Companies that focus on research and development through biomedicine are vastly outnumbered in the field. The leading Turkish pharmaceuticals manufacturer, Abdi Ibrahim, established its biotechnological pharmaceutical manufacturing facility (AbdiBio) at a cost of $100 million in 2016 which will be operational in 2017, producing biologics for cancer, diabetes, rheumatism, CNS, blood, GI, dermatological, and immunological diseases.
Government Incentives and R&D
Turkey started to focus on the development of biotechnologies at the beginning of 2000s, with academic and scientific institution beginning to publish heavily on the issue. Their focus was on three major fields of biotechnologies which were pharmaceuticals, agriculture, and industrial contribution. However, Turkey is still in its early steps in biotechnological advancement; in the Scientific American Worldview’s 2015 score-card evaluation of innovation in biotech, Turkey ranked 45th in a list of 54 countries. Productivity, workforce, and policy formations are only a few of the categories of the list, which is led by the United States, Denmark, and New Zealand. For biotech patents, Turkey’s share is as small as 0.03% led by the health sector. However, with the rising number of university programs focused on biotechnology, biotech efforts in the medical and pharmaceutical areas are not only popular but also potentially rewarding.
As a result of growing commercial and academic interest in biotechnology, the Ministry of Science, Industry and Technology released a “Strategy and Action Plan” in 2014 in a bid to define and track biotech goals set by the rapid increase of activity in the field. The report states that the health sector is the country’s leading field of biotech implementations.
In the last 5 years, biopharmaceuticals are the area in which the Turkish pharmaceutical manufacturers have placed the greatest emphasis in their R&D activities. Responding to an incentive scheme developed by the government, which can cover as much as 50% of expenditures related to R&D and focused largely on the production of biosimilars and bio-betters, Turkish manufacturers have invested heavily in developing ventures within this field by partnering with companies primarily from the APAC region, which have established product lines.
One of the advantageous aspects of pursuing medical biotech in Turkey is the low cost of clinical studies and production when compared to countries such as the United States and some Western European countries. Various setbacks also define the field such as lack of internationally credited labs, deficiency in current qualified workforce, a private sector disinterest in the field, lack of regulative associations to arrange and improve the technological conditions required to further research, difficulty in establishing interdisciplinary studies between biotech and medical fields, insufficient numbers of university research faculties and facilities, frequent miscommunication between researchers and clinicians, and a lack of participation in the international agreements and procedures in the field.
There is also a lack of legal content in Turkey with regards to copyrighting, bio-banks, and consumption coding that hampers the success of university and private efforts in the medical field. Lack of good policy is a global problem in the field of biotechnology, with two focal points: intellectual property rights and sharing biological databanks.
The Turkish government aims to transform Turkey into a global hub for biotechnology post 2020. However, before this can occur, several structural changes must take place to establish a collaboration of 3 main actors: the private industry, the government, and academic circles.
