The production of local biotechnological medicine

local biotechnological medicine
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The production of local biotechnological medicine
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Health Care
Biotechnology and Pharmaceuticals
Business Model Description

Investments in the R&D and production of biotechnology medicine

Expected Impact

Investments in biotechnology medicine production will increase the value added from medicine and make essential pharmaceuticals more readily accessible for Turkish patients.

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
> 25% (in IRR)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
> USD 10 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Good health and well-being (SDG 3) Industry, Innovation and Infrastructure (SDG 9)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Climate Action (SDG 13)
Country
Regions
  • Turkey: Black Sea Region
  • Turkey: Central Anatolia Region
  • Turkey: Marmara Region
  • Turkey: Mediterranean Region
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Health Care
HC

Development need: According to the Sustainable Development Report Dashboard of 2020, significant challenges remain in Turkey's performance on SDG 3 (Good Health and Well-being). This situation is exacerbated by COVID-19

Policy priority: Pharmaceuticals and medical devices are listed as priority investment areas (11th Development Plan and the 2020 Presidential Program). The Ministry of Health 2019-2023 Strategic Plan highlights constraints such as the the inefficient use of information technologies, the limited scale of R&D, inequalities in regional health services and the underemployment of health personnel

Gender inequalities and marginalization issues: 60% of healthcare workers in Turkey are women. (15) There is no official data providing a gender-based breakdown of the job categories in the healthcare sector. There are 1.83 doctors per 1000 people in Turkey (16), this is below the OECD average of 3.4.(17) There are currently 19.05 hospital beds per one million people in the country. (16) Although the regional breakdown of these indicators are not provided, rural and remote areas have an unequal access to health facilities and personnel.

Investment opportunities: Wide-scale reforms and significant sectoral growth drive investments towards healthcare.The production of high-value added pharmaceuticals and medical devices are marked as priority investment areas by the country. Moreover, the presence of many clinics and hospitals under the internationally accredited Joint Commission International supports prospects for health tourism

Key bottlenecks: The lack of collaboration among scientists and industry & the shortage of opportunities to encourage the private sector to invest in basic research limit scale. Overall, health research and R&D infrastructure development is necessary

SubsectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Biotechnology and Pharmaceuticals
HC.1

"Development need: The coronavirus pandemic has demonstrated the importance of medical biotechnology in the efforts to produce a vaccine. Turkey's yearly investments in innovative drug R&D is significantly lower than the world average (global investments in innovative drug R&D is USD 120 bl/y, Turkey’s share is only USD 60 mil/y representing only 0.039% of global R&D). (8) "

Policy priority: Medicine and Medical Devices are among the priority sectors highlighted by the 11th Development Plan. The 2020 Presidential Program highlights biotechnological drugs as a priority area in healthcare.The 2019-2023 Strategic Plan of the Ministry of Health stresses the importance of domestic medicine production and R&D efforts.

Gender inequalities and marginalization issues: 60% of healthcare workers in Turkey are women. (15) There is no official data providing a gender-based breakdown of the job categories in the healthcare sector. There are 1.83 doctors per 1000 people in Turkey (16), this is below the OECD average of 3.4.(17) There are currently 19.05 hospital beds per one million people in the country. (16) Although the regional breakdown of these indicators are not provided, rural and remote areas have an unequal access to health facilities and personnel.

"Investment opportunities: Existing biotechnology clusters in Izmir under the Izmir Biotech Cluster Initiative: they offer a biotech startup end-to-end product development as well as testing and certification (6)(7). Moreover, biotechnology drug production is a priority investment area for the country, and therefore is eligible for multiple government investment incentive programs. "

"Key bottlenecks: Entry barriers include the few API manufacturers in operation, high costs of initial investment, the ambiguity in the regulatory approval processes of locally produced biosimilars and the difficulty of finding trained scientists for biosimilar/biotech production (6)"

IndustriesMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Biotechnology and Pharmaceuticals
HC-BP
Investment Opportunity Area

The production of local biotechnological medicine

Business Model

Investments in the R&D and production of biotechnology medicine

Market Size (USD)Describes the value in USD of a potential addressable market of the IOA.
> USD 1 billion
Critical IOA UnitDescribes a complementary market sizing measure exemplifying the opportunities with the IOA.
Per kilogram value

Since August 2018, The Turkish biotechnologiy medicine market is valued above 5 billion TL. Biotechnology medicines constitute 20% of the Turkish pharmaceutical market. (9)

The world pharmaceutical market is worth around 1.2 trillion dollars, biotechnology medicines constitute approximately 260 billion dollars of this total value. (9)

On average, the per kilogram value of biotechnological drugs is one million dollars (9)

IRRDescribes an expected annual rate of growth of the IOA investment.
> 25%

Interviewed local investors interested in medical technology models target an IRR of 20-40% from these investments.

TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)

On average, the production of a new medicine takes around 12-15 years, and requires a significant amount of initial investments.

The licensing process in Turkey is composed of many stages such as 1) R&D efforts 2) Pre-Clinical Trials 3) Clinical Trials 4) License Application and Review Process 5) Sales Approval.

Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
> USD 10 million
Market - High Level of Competition
The presence of strong international pharmaceutical companies in the market limit the competitive potential of domestic research centers and companies
Sustainable Development Need

Access to essential medicine and its affordability constitute a global policy concern in terms of SDG 3.The coronavirus pandemic has demonstrated the importance of medical biotechnology in the efforts to produce a vaccine

Turkey's yearly investments in innovative drug R&D is significantly lower than the world average.

Currently, drug production in Turkey is oriented towards low value-added products, while high value-added products are imported. (10)

Gender & Marginalisation

There are rural-urban disparities in the access to health services and personnel in Turkey

Expected Development Outcome

Increase the value added from medicine and possibly make essential pharmaceuticals more readily accessible for Turkish patients

Enhance scientific research and the R&D capacity of Turkey

Increase R&D expenditure as a proportion of the GDP

Gender & Marginalisation

Increase access to essential medicines for female, inmigrants or rural ppopulation

Primary SDGs addressed
3 - Good Health and Well-Being
Good health and well-being (SDG 3)

3.b.1 Proportion of the target population covered by all vaccines included in their national programme

3.b.2 Total net official development assistance to medical research and basic health sectors

Current Level

86.47% (12)

2.16 billion US$ (12)

Target Level

100%

9 - Industry, Innovation and Infrastructure
Industry, Innovation and Infrastructure (SDG 9)

9.5.1 Research and development expenditure as a proportion of GDP

9.5.2 Researchers (in full-time equivalent) per million inhabitants

9.b.1 Proportion of medium and high-tech industry value added in total value added

Current Level

0.96% (1)

1,156.51 per million people (2015) (12)

31.45% (12)

Target Level

3.7% (1)

15 per thousand (1)

Secondary SDGs addressed
13 - Climate Action
Climate Action (SDG 13)
Directly impacted stakeholders
People
Researchers, employees working in pharmaceutical manufacturers/medical research institutes, biotechnology drug consumers, shareholders, caregivers
Corporates
Patient organizations, pharmaceutical manufacturers,
Public sector
Public and private universities, research centers, government, public and private payers, Social Security Institution and health technology associations
Indirectly impacted stakeholders
People
The general public, as they will gain access to local & affordable medicine options. Biotechnology medicines and vaccines are also tested and used to treat Iifectious disease outbreaks such as the coronavirus pandemic and SARS.
Gender inequality and/or marginalization
women / inmigrants / rural population who lack access to basic medicine
Corporates
The competitiveness of the Turkish healthcare and manufacturing industries through the production of high value-added biotechnological drugs, investors and the financial community
Outcome Risks

Without an effective and transparent regulatory system which monitors the production processes and quality standards closely, new drugs might pose health risks to users

Impact Risks

Execution Risk

Unexpected Impact Risk

What

Important, positive outcome: increased wellbeing and competitives in biotechnological medicine.

Who

Medical researchers, R&D centers and universities, the general public/patients, healthcare providers, academia

Risk

Low Risk (The potential risks for this model include problems related to quality and safety procedures (litigation and quality assurance)

Impact Thesis

Investments in biotechnology medicine production will increase the value added from medicine and make essential pharmaceuticals more readily accessible for Turkish patients.

Policy Environment

(11th Development Plan): Medicine and Medical Devices are among the priority sectors highlighted by the 11th Development Plan.

(2020 Presidential Program): The 2020 Presidential Program highlights biotechnological drugs as a priority area in healthcare

(2019-2023 Strategic Plan of the Ministry of Health): The 2019-2023 Strategic Plan of the Ministry of Health highlights the importance of domestic medicine production and R&D efforts.

Financial Environment

Financial incentives: The Ministry of Industry and Technology offers project-based incentives for R&D projects. The Central Bank of Turkey provides grant support to innovative drug production and R&D activities. (13). TÜBİTAK provides financial support to eligible R&D and innovation projects.

Fiscal incentives: Biotechnology drug production benefits from Region 5 Incentives: tax reductions, VAT exemption, credit and insurance support. Pharmaceutical production is also included in the Large Scale Investment Incentive Program if they have a minimum investment of 50 million TL

Other incentives: Companies geographically active or established in the Technology Development Zone will benefit from Institutions Tax Exemption (Kurumlar Vergisi İstisnası), Income Tax Exemption, Insurance Prime Support and VAT exemptions.

Regulatory Environment

Law 6550 on Supporting Research Infrastructure; qualified research centers are entitled to acquire legal personality as thematic research infrastructure.

The Social Security Institution, Medicine Refund Regulation and the Alternative Refund Regulation lays out the conditions for social security refunds/coverage of treatments and medicine in the Turkish health system

The Ministry of Health Human Medical Products Licensing Regulation (Beşeri Tıbbi Ürünleri Ruhsatlandırma Yönetmeliği) sets out the procedure and the principles for the licensing of human medical products

The Turkish Medicine and Medical Devices Institution sets the standards and regulations for the production of medicine and medical devices

Official Gazete # 30217 (21 October 2017) Human Medicine Manufecturers Regulation delineates the principles and procedures of manufacturing medicinal products for human use in compliance with Good Manufacturing Practices and nationally and internationally accepted standards

Private Sector

Banks like İş Bankası with R&D credit lines, companies like Eczacıbaşı, VSY Biotechnology, EPİGENETİKS Genetik Biyoinformatik Yazılım A.Ş, ARVEN İlaç, Inovita etc.

Government

Industrial Development Bank of Turkey, The Social Security Institution, The Directorate of Health Industry of Turkey, the Ministry of Health, the Medicine and Medical Devices Agency. Dokuz Eylul Uni. International Biomedicine and Genom Institute, Ege Uni. Research and Application Center of Drug Development, Investigative Pharmaceutical Firms Foundation, Black Sea Technical Uni. Pharmaceutical Technology Research and Application Center, Trabzon's Innovation and Biotechnology Center The Medicine and Medical Devices Institution of Turkey.

Multilaterals

International Finance Corporation, WHO

Public-Private Partnership

Türkiye Teknoloji Geliştirme Vakfı'nın (TTGV), Turkish Chamber of Pharmacies, The Pharmaceutical Manufacturers Association

country static map
urban
Turkey: Black Sea Region
The Turkish pharmaceutical industry is mainly developed in Istanbul, Kocaeli, Tekirdağ, Ankara and İzmir. Trabzon is also taking the initial steps to establish a medicine and biotechnology cluster in the region.
urban
Turkey: Central Anatolia Region
The Turkish pharmaceutical industry is mainly developed in Istanbul, Kocaeli, Tekirdağ, Ankara and İzmir. Trabzon is also taking the initial steps to establish a medicine and biotechnology cluster in the region.
urban
Turkey: Marmara Region
The Turkish pharmaceutical industry is mainly developed in Istanbul, Kocaeli, Tekirdağ, Ankara and İzmir. Trabzon is also taking the initial steps to establish a medicine and biotechnology cluster in the region.
urban
Turkey: Mediterranean Region
The Turkish pharmaceutical industry is mainly developed in Istanbul, Kocaeli, Tekirdağ, Ankara and İzmir. Trabzon is also taking the initial steps to establish a medicine and biotechnology cluster in the region.
Sector Sources
  • 1) SDG Index & Dashboard, 2020, https://dashboards.sdgindex.org/profiles/TUR/indicators "2) 11th Development Plan http://www.sbb.gov.tr/wp-content/uploads/2020/03/On_BirinciPLan_ingilizce_SonBaski.pdf " "3) 2020 Annual Presidential Program, http://www.sbb.gov.tr/wp-content/uploads/2019/11/2020_Yili_Cumhurbaskanligi_Yillik_Programi.pdf " 4) 2019-2023 Strategic Plan of the Ministry of Health, http://www.sp.gov.tr/upload/xSPStratejikPlan/files/Anobg+StratejikPlan2019-2023.pdf "5) Sustainable Development Goals Evaluation Report http://www.surdurulebilirkalkinma.gov.tr/wp-content/uploads/2020/03/Surdurulebilir-Kalkinma-Amaclari-Degerlendirme-Raporu_13_12_2019-WEB.pdf " 6) Swiss Chamber of Commerce, 2015, https://www.tr-ch.org/wp-content/uploads/2015/06/Turkey-Pharmaceuticals2015DT.pdf 7) Bioizmir, http://bioizmir.deu.edu.tr/en/ 8) PwC, "İlaç Sektörü Vizyon 2023 Raporu, https://www.pwc.com.tr/en/publications/industrial/pharma/pdf/ilac-sektoru-vizyon-2023-raporu-eng.pdf
IOA Sources
  • 9) Cumhuriyet Daily, "Türkiye'nin İlk Yerli Kanser İlaci Üretildi", http://www.cumhuriyet.com.tr/haber/turkiyenin-ilk-yerli-kanser-ilaci-uretildi-1144366 10) PwC, "İlaç Sektörü Vizyon 2023 Raporu, https://www.pwc.com.tr/en/publications/industrial/pharma/pdf/ilac-sektoru-vizyon-2023-raporu-eng.pdf 11) Gün + Partners Avukatlık Bürosı, Turkey a Rising Star in the Pharmaceutical Industry, https://gun.av.tr/insights/articles/turkey-a-rising-star-in-the-pharmaceutical-industry 12) SDG Tracker, 2020, https://sdg-tracker.org/ 13) The Central Bank of Turkey, "Yatırım Taahütlü Avans Kredisi Uygulama Talimatı", https://www.tcmb.gov.tr/wps/wcm/connect/4f7dcdda-a5f9-4b34-a4e5-fbde33496d6a/Yat%C4%B1r%C4%B1m+Taahh%C3%BCtl%C3%BC+Avans+Kredisi+Uygulama+Talimat%C4%B1+Temmuz+2020.pdf?MOD=AJPERES 14) WHO, Local Production for Access to Medical Products: Developing a Framework to Improve Public Health, https://www.who.int/phi/publications/Local_Production_Policy_Framework.pdf 15) Anatolian Agency, 2020. https://www.aa.com.tr/tr/sirkethaberleri/saglik/saglik-sektorunde-kadin-paneli/656192 16) Trading Economics: OECD Health Data, 2018. https://tradingeconomics.com/turkey/medical-doctors 17) OECD, 2017. https://www.oecd-ilibrary.org/docserver/health_glance-2017-52-en.pdf?expires=1615450933&id=id&accname=guest&checksum=75ABA90B65E377ACA91EBA3E9CEBA6B2