Since we last met with World Medicine, in 2014, the company has continued to aggressively expand its footprint in Turkish and foreign markets. Could you provide us with an overview of the key projects that World Medicine has undertaken over the course of the past year?
Rovshan Tagiyev (RT): For the past year, we have put significant effort into expanding our business in the Turkish pharmaceutical market and in global pharmaceutical markets. We have been continuously working towards the development, registration and market launch of new medicines in Turkey. In order to expand our business into foreign markets during this period, we have formed strategic alliances with Pharma Ival Company in Algeria and Polymedic Company in Morocco to build new factories in these countries. Also, we have concluded many distributorship agreements to make our products available to markets in Asia, Africa and the Middle East. We have intensified our efforts in registering our products in European Union (EU), which resulted in the successful registration of nine of World Medicine’s products in Greece. We expect to get marketing authorizations for six to eight medicines in Great Britain by the end of this year. In addition, our medicines are under registration today in Portugal, Bulgaria, Romania, and Poland. These developments will yield the desired outcomes for our business expansion.
What external factors have affected your activity in foreign markets?
RT: Currency devaluation in the foreign markets has again impacted World Medicine, as the company is active in several markets that have exhibited macroeconomic volatility over the past year. We are active in Commonwealth of Independent States (CIS) countries, where sharp movements in the currency exchange rates have occurred. On top of that, the company has felt the impact of the war in Ukraine.
Economic turbulence has cut the purchasing power of our target markets. In addition, owing to individual market regulation, we are unable to change the price at which we supply them. As a result, we have operated at a loss on occasion. Be this as it may, the diversification of foreign markets has provided us with the opportunity to grapple with the twists and turns of the global economy more easily than many others.
While the complicated situation in the markets of Russia and Ukraine has resulted in decreased sales volume of World Medicine in these countries, our activity within other markets has increased.
Which foreign markets are most appealing to World Medicine?
RT: In 2015, World Medicine seeks to focus more heavily on our activity in the EU. We aim to see our products in pharmaceutical markets in Romania, Bulgaria, and even Spain. To this end, we began the market authorization process for the European Union last year. Operating within the European market requires GMP certification. Although the Turkish and European GMP requirements coincide in many respects, we were required to undergo an additional certification process to enter the European market, and naturally, we have undertaken this. Today, the manufacturing facilities of World Medicine have GMP-compliance certification for the EU, which is crucial for the execution of our strategy.
In the past year, we have seen the profitability of pharmaceutical manufacturing in Turkey decline rapidly, impacted by both the country’s system of cross-reference pricing and currency volatility. What has this meant for World Medicine?
RT: In 2014, World Medicine launched 15 new products on the market. Of course, World Medicine has been impacted by these two macroeconomic events, the country’s system of cross-reference pricing and currency volatility, but the larger impact that these two events have had on the industry is observed in the creation of unmet medical needs within the domestic market, a result of the Turkish pharmaceutical manufacturer’s inability to profitably develop new products or continue existing product lines. World Medicine and many others within the Turkish market are fully aware that there is a need for certain types of pharmaceutical products to be developed and launched. The possibilities of the manufacturers to do so are quite limited, and the immediate consequence of this has been that World Medicine, like many others in the contemporary pharmaceutical environment, is now more heavily focused on the development of export markets.
World Medicine has a strong commitment to research and development (R&D), evidenced in the partnerships that it has forged with Turkish academic community. Can you please provide us with an overview of your R&D strategy in 2015?
RT: In 2015, World Medicine has been engaged in developing two new products through our R&D strategy and is in close collaboration with two Turkish universities.
Beyond this, World Medicine has also commissioned the development of a biotechnological laboratory, which we will complete in 2016. Again, the development of these facilities and relevant laboratory studies will be performed in collaboration with Turkish universities. To guide our R&D strategy, we have also contracted several reputable foreign scientists from Canada, South Korea and Argentine, countries where the governments have already promoted biotechnology as a priority of research and engineering policy.
We have now completed the first quarter of 2015. What strategic initiatives will World Medicine enact over the remainder of the year to ensure the further growth of the company?
RT: World Medicine is currently heavily focused on completing the market authorization process, the essential part of our product launching within emerging pharmaceutical markets in Southeast Asia, as well as to East African markets. In fact, we have already begun to export to these two regions; however, we now seek to expand our product offering in them. The markets of Southeast Asia and Africa show great promise for their underlying potential. In the future, they will become quite economically profitable.
What has the Turkish government’s treatment of the regulatory framework governing the pharmaceutical sector meant for World Medicine’s confidence as a manufacturer in Turkey?
RT: Turkey has prioritized the development of its pharmaceutical sector. We have felt this at every stage: in developing new products within the country, as well as while using the country as a base for extending our presence within the foreign markets. It is because of the confidence that we have in the Turkish government that this year World Medicine will develop two new factories for pharmaceutical manufacturing, for which we have just acquired land and begun the project development process.
These two factories will have different production lines: one will be dedicated to sterile and lyophilized products, and the other will be dedicated to additional manufacturing for anti-asthmatic products. We hope that the factory opening ceremonies will be performed by 2016.
Where might we see World Medicine in five years?
RT: Over the next five years, World Medicine will become more global than ever before. We are currently establishing a factory in Belarus. We will soon develop a factory project in Algeria. We seek to enter the EU, and many of the world’s most quickly growing, emerging medical markets. We see great promise in these regions.
Rovshan Tagiyev (RT): Our company was established and started to carry out its business activity in the United States. We initially focused on creating a product assortment and gaining the distribution rights for international markets by entering into license and distributorship agreements and, of course, on marketing our products. Later we realized that we would accomplish our objectives more effectively and establish footholds for conquering new markets if we transferred our headquarters to the United Kingdom (UK). So, in 2004 the company World Medicine UK was established, and World Medicine USA transferred all its rights to the newly created company. Subsequently, World Medicine Company has grown swiftly due to the location of its headquarters in Great Britain, which has made it easier to administer and manage the company’s operations in other countries. Aimed at business expansion, affiliated companies under the identical name of World Medicine have been created in such countries as Greece, Bulgaria, and Turkey. Within a short time, over 40 strategic partnership agreements have been concluded, and the products of our company were available at the markets of more than 16 countries.
We aim to be a successful pharmaceutical company by introducing high quality and effective medicines that increase quality of life. We are committed to maintaining our reputation for professionalism, as a reliable partner, supplier, and employer.
Today, World Medicine Group is a leading company in many countries. We have our own research and development laboratory, as well as our own production facilities. Our company’s product portfolio contains more than 350 products, and we employ over 4000 people. Our products are available in more than 23 countries.
Our motto is “Health is a treasure we share.”
World Medicine Turkey was established in 2011. What encouraged this decision?
RT: We initially came to Turkey in 2007 to create a logistic center in a free-trade zone for the group of companies, and we succeeded within a short period of time. We started to conduct market research in Turkey to study market opportunities, whereupon we took the decision to set up an R&D laboratory and establish our own production facilities. We believe Turkey will be an excellent logistical center or hub. The Turkish pharmaceutical market is quite developed, and Turkish products are in great demand by consumers in neighboring countries.
Moreover, the Turkish pharmaceutical industry is renowned for its highly qualified work force and its use of high technologies for production. Also the pharmaceutical sector is growing quickly, with terrific support from the Turkish government. The government has implemented regulatory reforms and streamlined the process for gaining regulatory approval, particularly when compared to other countries. Ultimately, we value Turkey’s geographic position, which is strategically important and advantageous for expanding our coverage of global markets. Specifically, territorial proximity to our major markets in 2011 inspired us to build our production facilities in Turkey. The Turkish government shares our goal of increasing the export of high quality pharmaceutical products.
What have been the growth patterns and main milestones since World Medicine was established in Turkey in 2011?
RT: We set up the R&D center to support our companies in 2011. We just completed the construction and equipment for own production facility in Istanbul, which has a production capacity of 65 million boxes per year. It took us three years to finish the project and set up the production process. We invested considerable resources to new products development. These investments enabled us to increase our export volume from Turkey in 2012-2013, which equaled to 12 million dollars in a very short time. Although these exports are only 3 percent of the total business of World Medicine Group, we aim to grow. Our targeted export turnover from Turkey is 150-200 million dollars by 2016-2017. We are currently exporting our products to 23 countries and we are planning to expand into two or three new countries every year. Our main targeted markets are the ex-Soviet countries, Asia, Middle East, Africa, as well as Eastern Europe. On a long-term horizon we plan to enter the markets of more than 10 countries in South and North America, as well as Europe.
World Medicine is very upbeat about its business operations in Turkey, but there is one challenging aspect of Turkish pharmaceutical industry: the pricing system for the internal market. Will this aspect affect your company or will you export most of your products?
RT: Essentially, this aspect considerably affects the policy of pharmaceutical companies; our company is not an exception. But unlike other companies, we are focused on exporting our products; therefore, the issue of price adjustment does not have great influence over our plans. Pricing is a quite complicated issue, and the careful attention of relevant governmental authorities should be focused on keeping producers interested in the Turkish pharmaceutical market.
World Medicine conducts its research and development activities in Turkey, working closely together with local universities. Could you please describe your R&D operations and your collaboration with universities?
RT: Out of more than 300 total employees, we have over 75 people committed to R&D. Our research and development team is top-notch, as are our facilities. Our R&D staff is working on over 100 products at the same time, coordinating with many different departments. We also work side by side with Turkish universities and have successfully completed two projects with them. We primarily work on new molecule formation and new products. We are constantly maintaining contacts with scientists in Turkish universities to learn from their expertise. As you know, development does not exist without scientific support.
Could you please tell us about the local workforce and how World Medicine sources its employees?
RT: It is not easy to find qualified people for new projects and products. There are many specialists who can work in the R&D laboratory or the production facility. There is an abundance of excellent professionals working in our company. As far as the new technologies for production of pharmaceuticals are concerned, there are specific difficulties finding experienced personnel. For instance, it is rather challenging to find experts in biotechnology.
It is not yet too late for Turkey to enter the wave of biotechnology that is revolutionizing the global pharmaceutical industry. Is World Medicine focusing on biotechnology products or planning to develop partnerships with other companies in the sphere of biotechnology?
RT: We are not engaged in any joint ventures at this time but we are looking for them and imagine future partnerships in biotechnology. The market for biotechnology is rapidly growing, and 100% of products are imported. The Turkish government renders significant support for companies involved in developing biotech products. I think that in 3 to 4 years, the first biotechnology products of local manufacturing will become available.
What does the future hold for World Medicine in the next five years?
RT: As a group of companies, we are planning to improve and increase our production capacity. We also tend to be active in more countries, spreading our footprints all over the world. And we surely want to grow our business and increase our income. We are currently building another factory in Belarus which will cost approximately 55 million dollars. In 2016 or 2017, we plan to construct a second factory in Istanbul for manufacturing sterile pharmaceutical products.
Do you have any final thoughts for our readers?
RT: The Turkish pharmaceutical industry already belongs to the global market but we hope and expect that it will play a larger role in the future, as the domestic pharmaceutical market is expanding rapidly. For example, this year the CPhI Worldwide conference was held in Turkey for the first time. We strongly encouraged UBM (United Business Media) to arrange a conference here in Istanbul, and finally this event has taken place. We believe that this is an exceptional opportunity to present Turkish production to the entire world. My idea is that Turkish factories are technologically superior to many factories in the world, and the global community should recognize Turkey for this achievement. Global approval will lead to new investments in Turkey, which in turn will increase competition and help transform Turkey into a global player in the pharmaceutical sector.
We salute the government of Turkey for its contribution to the development of pharmaceutical industry. Going forward, we would hope that it performs in-depth studies of the practical application of regulatory frameworks in other countries. This will benefit the local pharmaceutical industry. For example, there is a general discussion about joining the Pharmaceutical inspection cooperation scheme (PIC/S), which would favorably affect the pharmaceutical sector by facilitating the entrance of Turkish producers into new markets. Joining the abovementioned system would ease registration formalities and promote the recognition of Turkish companies in the global community.
I am sure that the medicinal products manufactured by Turkish pharmaceutical companies are of the highest quality, and over the course of time Turkish production will gain the confidence of international consumers, and Turkey’s industry will occupy a strong place in the global market.