Süha Taşpolatoğlu

How suitable was 2019’s annual pharmaceutical price increase for Abdi İbrahim’s operations?
Pricing in the pharmaceutical industry is controlled by the government, and this control mechanism has been developing against the pharmaceutical industry since 2009. The most recent price adjustment from 46% to 47% was needed. However, if we consider that almost all our costs are related to foreign currency, this figure still does not meet our costs. In recent years, pharmaceuticals production and import costs have increased more than prices, and 2019 is no different.

What regulatory changes are necessary to promote and advance the Turkish pharmaceutical sector?
Without the margins necessary for investments in R&D, we cannot become a regional or global player. We need resources to make these investments, and we can only create them through higher sales. However, unfortunately, the sector is unable to make the investments needed to be competitive as a result of the changes in pharmaceutical prices. Several laws and plans were introduced; however, they didn’t make the sector more competitive. We work with the government on amending these laws, both as a company and as part of a union. One plan is to review the mechanisms of incentives and, if necessary, contribute through grants. Some countries have become significant players in the pharmaceutical industry over the last 10 years largely because they have invested heavily in R&D. In order to become a big player, we need to move away from the regulations seen in Europe and the US and tailor regulations to Turkey’s needs. Finally, the sector needs more qualified human resources, and we have experienced and sufficient human resources in the production and development of conventional chemical products. However, the same cannot be said about biotechnology or other latest technologies. There is a need for government-funded incentives, doctoral programs, and overseas collaborations to further uplift the entire industry.

What does the opening of your biotechnology facility represent for your future direction?
We have divided our biotechnology investments into several stages. The first stage is called fill and finish, where we acquire the active substance from abroad and complete the formulation and filling processes in Turkey. The second stage is the production of biosimilars, which are devised in other countries from the cell through technology transfer. The third stage is producing our own biosimilars and biological products, which is the most difficult for a number of reasons: it requires a great deal of investment; there is a lack of related human resources; and the biosimilars field is new. Healthcare professionals and the related public authorities around the world are still skeptical of biosimilars. At Abdi İbrahim, we have invested USD100 million in this area in order to make Turkey a major player in this field and to prepare our company for the future. This number will continue to increase because one has to continue to invest when they start to work in this field. By doing so, we are now focused more on biological products.

Why did you choose to invest in production facilities in Algeria and Kazakhstan?
We studied both markets in terms of their market potential, access, and ROI, among other factors. Kazakhstan and Algeria are both big countries and big markets. Moreover, both countries enable us to access more markets. From Algeria, we can access Maghreb countries, and from Kazakhstan we can access Georgia, Azerbaijan, Belarus, and Russia. Another factor that works in our favor is Turkey’s reputation in these countries. Both countries offer different advantages to investors.

Which export markets are you focused on growing?
Currently, the share of international markets in our total turnover is around 17-18%, and our goal is to increase that figure to 50%. To that end, we are working with more than 10 countries excluding Algeria and Kazakhstan, such as Azerbaijan, Georgia, Bosnia, Iraq, and Gulf countries.