AMBASSADOR MEETS WITH PHARMACEUTICAL REPS AND

UNCLAS SECTION 01 OF 02 ISTANBUL 000173

SIPDIS

COMMERCE FOR GTAEVS FCS ISTANBUL

E.O. 12958: N/A
TAGS: ECON EFIN FCSC PHUM TU
SUBJECT: AMBASSADOR MEETS WITH PHARMACEUTICAL REPS AND
PROMISES TO PRESS GOT ON REGULATORY REFORM


1. (SBU) (Summary) Ambassador Jeffrey recently met
with representatives of the U.S. pharmaceutical industry in
Istanbul. The discussion centered upon familiar and
long-standing industry problems in Turkey such as market
access, patent protection and data exclusivity, as well as
conformity with EU standards. The company officials asked
the Ambassador for assistance in getting their "Road Map"
report into the hands of key Turkish officials, including the
Prime Minister. The Ambassador agreed do this, and offered
to assist (perhaps combining efforts with the EU
representative to Turkey) to push the GOT on passing the new
Patent Law. He also promised to try to persuade Alpaslan
Korkmaz of the Investment Support and Promotion Agency of
Turkey (ISPAT) to reconsider his decision not to send
officials to a May 18-21 biomedical convention in Atlanta.
End Summary.


2. (U) On March 6 in Istanbul the Ambassador met with
Jeff Kemprecos of Merck Sharp and Dohme, Chris L. J.J.
Stijnen of Bristol-Myers Squibb, Muhittin Bilgutay of
Schering-Plough and Serkan Yagcioglu of GlaxoSmithKline to
discuss issues of concern to the pharmaceutical industry.


3. (SBU) Ambassador Jeffrey noted that, although the
United States no longer produces as much steel or
manufactured goods as it once did, it still produces and
exports high quality products like pharmaceuticals. He added
that in Turkey the drug industry is a politically sensitive
sector because it is plugged in to a highly socialized
medical system, and because poor people need access to
affordable drugs. If intellectual property rights are not
protected by the government there will be less incentive for
the industry to invest and produce in Turkey. "Turkey must
play by the rules," he emphasized. The Ambassador agreed to
pursue diplomatic efforts to help move the GOT on regulatory
reform, the industry Road Map and, hopefully, the Atlanta
Biomed convention.

THE ROAD MAP


4. (SBU) In October 2008 the industry completed an
advocacy report known as Vision 2015, also known as "The Road
Map", which followed up on earlier reports that called for
critical regulatory reforms in Turkey, and which cited
Ireland and Singapore as success stories in the realm of
biomedicine. In late December of 2008 industry
representatives presented the Road Map to Alpaslan Korkmaz,
President of the Investment Support and Promotion Agency of
Turkey (ISPAT) and his team. Jeff Kemprecos stated that the
presentation was a "huge hit" and that Korkmaz promised to
arrange a meeting where industry could present the report to
the Prime Minister and the Ministers of Health, Labor and
Industry. However, 2009 thus far has proved to be a
disappointment, with local elections in Turkey dominating the
government's focus in the first quarter of the year, and with
recent cabinet changes creating an uncertain vetting process
for complex regulatory reform issues in the near term.

THE ATLANTA BIO 2009 CONFERENCE BLOW-OFF


5. (SBU) According to the pharmaceutical
representatives, the Atlanta BIO 2009 Conference which begins
on May 19 is hugely important to the industry. Kemprecos
described it as "our Davos." In early 2009 GOT had confirmed
that it would send a fact finding team to Atlanta consisting
of seven officials and two ISPAT representatives. However,
just a few weeks before the conference all the officials
cancelled their trip, citing reasons ranging from the swine
flu crisis to the recent cabinet shuffle.

REGULATORY PROBLEMS IN TURKEY


6. (SBU) In Turkey it takes about two to three years
for new medicines approved in the United States or Europe,
including cancer drugs, to reach Turkish patients, a period
that sector representatives view as far too long. Pricing
and licensing approvals are determined by the Ministry of
Health (MOH),and the process can take 12 to 24 months or
more. Reimbursement for drugs purchased through the
socialized health system involves 9 to 12 months or more of
negotiations with the Social Security Institute (SGK). In
Europe the final price discount on a new drug should be about
11% below the industry reference price, but in Turkey
companies routinely are pressured to discount the price

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16-17% below the lowest comparable level in the EU. In
Europe the registration (licensing) phase is no more than 210
days and the reimbursement decision is given within 90 days.
Industry representatives believe that the whole process
should take about nine months: six months for licensing plus
three months for reimbursement.


7. (SBU) In Turkey, data exclusivity (DE) for drugs is
limited to six years, and the GOT counts the DE period from
the first registration in Europe. Subtracting the two to
three years of regulatory approval time required to get a
product on the market, a company may only have three years of
DE before the generic drug firms can use confidential test
data in their own marketing applications. This is roughly
one third of the European standard. Europe has an "8 2 1"
system which allows a company to apply for up to 11 years of
protection. Industry representatives believe the effective
protection period in Turkey should be at least six years and
that, as in Europe, a company should receive compensation if
the effective DE protection period for one of its drugs is
shortened due to regulatory delays.


8. (SBU) The pharmaceutical industry has pushed hard
for Turkey to enact a new patent law which would replace the
1995 Decree. They would like the United States to help push
this through, without any amendments. "We have a great
opportunity to get a first-class patent law," enthused
Kemprecos, but this will require a continued push. Kemprecos
stated that the Turkish Patent Law Office (TPI) has been
helpful in this regard ("objective and informative") but not
the MOH.


9. (SBU) (Comment) The strategic relationship
between the United States and Turkey is strong, but the
bilateral commercial relationship has not always kept pace.
Biomed is a sector where an improved regulatory regime could
foster significant growth in U.S. investment into Turkey.
Turkey is in the top 13 in the world as a health care market,
but receives only a USD 140 million share of the annual USD
90 billion research and development (R&D) market in biomed.
In contrast, as Kemprecos noted, biomed now accounts for 40%
of Singapore's total exports, and Ireland has been so
successful in this sector that the industry publicizes "The
Irish Miracle." Sector representatives believe that the GOT
lacks both the vision and the strategic plan to realize its
potential in this field, but that a concerted push to create
a better regulatory and legal climate could lead to a
substantial payoff for both Turkey and the pharmaceutical
sector.

End Comment.
Wiener