BANU OGAWA SENIOR PROJECT DIRECTOR “ HEALTH SECTOR OF TURKEY ”

1. BANU OGAWA SENIOR PROJECT DIRECTOR “HEALTH SECTOR OF TURKEY”

2. OUTLINE • COUNTRY PROFILE • PHARMACEUTICAL MARKET; • MILESTONES • PRODUCTION • INTERNATIONAL SUCCESS • TOP 10 COMPANIES OF THE SECTOR • INTERNATIONAL RATING & TENDENCIES • REGULATION • ESTABLISHING A LOCAL OFFICE • REIMBURSEMENT, PRICING & DISTRIBUTION • TURKISH HOSPITAL STRUCTURE • R&D • COMMERCIAL INSURANCE ENVIRONMENT

3. COUNTRY INFORMATION Source: TUIK, 2009

4. - PRESCRIBEDPHARMACEUTICAL MARKET OF TURKEY - • HIGH LEVEL OF TECHNOLOGY & AUTOMATION • 25 000 EMPLOYEES IN THE PHARMACEUTICAL SECTOR • RAPID GROWTH IN 5 YEARS Source:IEIS

5. - TURKISH PHARMACEUTICAL INDUSTRY: MILESTONES - Source:IEIS

6. - TURKISH PHARMACEUTICAL SECTOR: PRODUCTION - • MAJOR DISTRIBUTION REGION - MARMARA REGION, ESPECIALLY: • - ISTANBUL • - KOCAELI • - TEKIRDAG • GOOD MANUFACTURING PRACTICES (GMS) APPLICATION • ALMOST EU-COUNTRIES COMPARABLE TECHNOLOGICAL LEVEL • (EXCEPT BIOTECHNOLOGY AND A FEW NEW PHARMACEUTICAL BRANDS) • APPR. 300 ENTITIES OPERATING • 43 MANUFACTURING FACILITIES • (INCL. 14 MULTINATIONAL FIRMS) • MAJOR TURKISH MANUFACTURERs: • - EIS-ECZACIBASI • TEKIRDAG • ABDI IBRAHIM • FAKO • ILSAN-ILTAS • MUSTAFA NEVZAT • IBRAHIM ETHEM • BILIM Source:IEIS

7. - TURKISH PHARMACEUTICAL INDUSTRY: INTERNATIONAL SUCCESS - • ILSAN-ILTAS IS WELL-KNOWN FOR ITS KNOW-HOW IN PELLET-DEVELOPMENT • MUSTAFA-NEVZAT PLANTS GOT INTERNATIONAL ACCREDITATION. IT IS A FIRST TURKISH PHARMACEUTICAL COMPANY. THE COMPANY SIGNED SEVERAL STRATEGIC PARTNERSHIP AGREEMENTS WITH LEADING US GENERIC COMPANIES FOR MARKETING AND SALES OF ITS PRODUTCS • EXPORT TO 140 COUNTRIES,INCL.: • GERMANY • USA • UK • SWITZERLAND • THE NETHERLANDS Source:IGEME

8. - TURKISH PHARMACEUTICAL INDUSTRY: TOP 10 COMPANIES - Source:AIFD

9. - TURKISH PHARMACEUTICAL INDUSTRY: INTERNATIONAL RATING - SHARE OF GLOBAL SALES (2013) Source: IMS Health

10. - TURKISH PHARMACEUTICAL INDUSTRY: REGULATIONS - • PATENT PROTECTION • DATA EXCLUSIVITY • PRICING & REGISTRATION • GOOD MANUFACTURING PRACTICES(GMP) • GOOD LABORATORY PRACTICES (GLP) • GOOD CLINICAL PRACTICES (GCP) • BIO-AVAILABILITY/BIO-EQUIVALENCY • PACKAGING LABELLING • PROMOTION/ADVERTISING • DRUG RESEARCH & MEDICINAL PRODUCT REGISTRATION • STABILITY REQUIREMENTS • REGULATION ON GOOD DISTRIBUTION & STORAGE PRACTICES • PHARMA-COVIGILANCE • THE PRODUCTION AND MARKETING OF ALL PHARMACEUTICALS MUST BE AUTHORIZED BY THE MINISTER OF HEALTH • PHARMACEUTICAL PRODUCTS AND FIRMS MUST BE REGISTERED IN THE MINISTRY Source:IEIS

11. - TURKISH PHARMACEUTICAL INDUSTRY: ESTABLISHING A LOCAL OFFICE - CONTROL OF COMPANY NAME AND TITLE PREPARATION OF COMPANY MAIN CONTRACT COMPANY ESTABLISHMENT(ADDITION TO LETTER OF APPLICATION & DOCUMENTS REQUESTED BY CHAMBER OF COMMERCE) PAYMENT OF CHAMBER OF COMMERCE SHARE(4/10000 OF CAPITAL) REGISTRATION OF COMPANY PUBLICATION OF COMPANY IN TRADE REGISTRY GAZETTE SIGNATURE SPECIMEN OF GENERAL MANAGER APPLICATION FOR TAX ACCOUNT NUMBER RECEIVING AND APPROVAL OF THE BOOKS COMPOSITION OF EXAMINATION RECORD RECEIVING TAX ACCOUNT NUMBER PRINTING INVOICE,SHIPPING BILL AND EXPENSE BILL REGISTRATION TO RELATED CHAMBERS GETTING THE WORK PERMISSION CERTIFICATE,WEEKLY HOLIDAY CERTIFICATE Source:MINISTRY OF HEALTH

12. - TURKISH PHARMACEUTICAL INDUSTRY: REIMBURSEMENT, PRICING & DISTRIBUTION - • FDA DOSSIER NEEDS TO BE CONVERTED TO EU-CTDFORMAT • PRE-FILLING: 3 MONTHS,INCLUDING TRANSLATION • OFFICIAL TARGET: 240 DAYS • REALITY: 18-24 MONTHS FOR GENERICS, 24-30 MONTHS FOR ORIGINALS • GMP INSPECTION ! Rx STATUS (18-30 months) • EYE DROPS • PANSIRON BRAND MEDICINE • COLD REMEDIES • DERMAL MEDICINE • HAY FEVER • PRICE CONTROL BY MINISTRY OF HEALTH (REFERENCE PRICING SYSYTEM) • MOSTLY REIMBURSED • PHARMACY SALES ONLY • DETAILING ONLY TO PROFESSIONALS& AD`S ONLY IN MEDICAL MAGAZINES Source:MINSITRY OF HEALTH

13. - TURKISH PHARMACEUTICAL INDUSTRY: REIMBURSEMENT, PRICING & DISTRIBUTION - • DOSSIER SHOULD INCLUDE; • FORMULA • CONTROL OF STARTING MATERIALS • MANUFACTURING METHOD • FINISHED PRODUCT CONTROLS • PIL • INNER & OUTER PACKAGE NON-Rx STATUS (18-24 months) • EYE WASHES • CONTCT LENS CARE • NAMED AS “INTERMEDIATE PRODUCTS” • PRICE CONTROL; • BY MINISTRY OF HEALTH Source:MINISTRY OF HEALTH

14. - TURKISH PHARMACEUTICAL INDUSTRY: REIMBURSEMENT, PRICING & DISTRIBUTION - FOOD SUPPLEMENTs (Ministry of Agriculture, 2-4 months) DERMO-COSTMETICS (Ministry of Health, 2-4 months) • VITAMINS, MINERALS, HERBAL PRODUCTS • REGULATORY PROCESS IS RELATIVELY SHORT • NO PRICE CONTROL • NO REIMBURSEMENT • LIP CARE • HAND / BODY / SUN CARE • PARFUMES Source:MINISTRY OF HEALTH

15. - TURKISH PHARMACEUTICAL INDUSTRY: REIMBURSEMENT & PRICING (AS OF 18TH OF MAY, 2009) - SEGMENT DIFFERENCES • REFERRED TO CHEAPEST EX-FACT PRICE AMONG ITALY, PORTUGAL, GREECE, SPAIN, FRANCE OR THE SOURCE (MANUFACTURING & SUPPLY) COUNTRY PRICE • PLANTS TO EXPAND TO 10 COUNTRIES (POLAND & HUNGARY!) • GREECE ALREADY REFERS TO HUNGARY; SO TURKEY REFERS INDIRECTLY TO HUNGARY • ORIGINALS WITH GENERICS - 60% OF REFERENCE PRICE • ORIGINALS WITHOUT GENERICS – 100% OF REFERENCE PRICE • ANY DECREASE IN REFERENCE COUNTRY PRICE SHOULD BE IMPLEMENTED IN 3 MONTHS • €/TRY CONVERSION IS FIXED Source:AIFD

16. - TURKISH PHARMACEUTICAL INDUSTRY: REIMBURSEMENT - After registration, the product is be submitted to Social Security Institution (SGK) REIMBURSEMENT • Rx Products are reimbursed as 80% • Non-Rx category (food supplement and dermo-cosmetics) are not reimbursed • The reimbursement is 15% of original product price, if there is a generics as of 1stof August 2009.The remaining sum is be paid by the patient • Approval may take 3-9 months • Approval may be based on various restrictions • SGK announces annual reimbursement rules (RUT) changing twice a year MANDATORY DISCOUNTs (18TH of September, 2009) • 24% for Originals without Generics • 11% for Originals with Generics • 24% for Drugs categorized as 20 years old with an equivalent group and a retail selling price higher than TRY 10,- until a reference price is assigned Source:MINISTRY OF HEALTH

17. - TURKISH PHARMACEUTICAL INDUSTRY: DISTRIBUTION - THERE ARE NO CHAIN PHARMACIES. A PHARMACIST CAN ONLY OWN ONE PHARMACY ALL DRUGS ARE TO BE SOLD IN PHARMACIES ONLY SOME VITAMINS ARE SOLD IN GROCERY STORES LICENSED BY MINISTRY OF AGRICULTURE INSTEAD OF MINISTRY OF HEALTH THE PHARMACIST SHOULD ALWAYS BE IN THE PHARMACY MANUFACTURER OR IMPORTER PHARMACEUTICAL WHOLESALER PHARMACIES Source:MINISTRY OF HEALTH

18. - TURKISH PHARMACEUTICAL INDUSTRY: HOSPITALs - 1 205 HOSPITALS WITH 192 685 BED CAPACITY (2006) - TURKISH HOSPITAL STRUCTURE (2008) - AN IMPORTANT NEW TREND: ATTRACTING PATIENTS FROM EUROPE (MAINLY, UK) OR MIDDLE EAST FOR A TREATMENT IN TURKISH PRIVATE HOSPITALS - NUMBER OF DOCTORS IN TURKEY (2006) - AVERAGE CAPACITY UTILIZATION – 60% (2006) Source:MINISTRY OF HEALTH

19. - TURKISH PHARMACEUTICAL INDUSTRY: R&D and INNOVATION PERFORMANCE - SINCE 2002 INVESTMENT TO CLINICAL RESEARCH IN TURKEY • Share of R&D expenditures in GDP has increased from 0.53% to 0.71% • The number of R&D personnel increased from 29 000 to 83 000 • The number of scientific publications increased from 10 000 to 22 000 • The number of patent application increased from 85 to 357 • 20 Pharma-Companies (250 employees in total) • 2 Associations playing a key role • 12 CRO’s • Total Investment: $ 40-60 mln. Source:AIFD

20. - TURKISH PHARMACEUTICAL INDUSTRY: COMMERCIAL INSURANCE - • THE INSURANCE SECTOR IN TURKEY IS STILL SMALL, BUT IT IS RAPIDLY GROWING • TOTAL PREMIUM AMOUNT GENERATED BY THE SECTOR WAS $ 6.7 BLN. WITH A GROWTH OF 16% • THERE ARE 54 INSURANCE AND 2 RE-INSURANCE COMPANIES OPERATING IN TURKEY • 21 INSURANCE COMPANIES WORK IN THE LIFE-INSURANCE SECTOR • 33 INSURANCE COMPANIES WORK IN THE NON-LIFE SECTOR Source:IGEME

21. THANK YOU VERY MUCH FOR YOUR ATTENTION