TABLE OF CONTENTS

Biological Medicines

In order to increase our exports, we need to gain competence in biological medicines whose share in the world pharmaceutical market is increasing. The sales of biological medicines, in the world pharmaceutical market was USD 1 trillion 237 billion in 2019, accounted approximately to 30% of the total market or to USD 362 billion. Biosimilar products make up more than 1% of the market. The share of biological medicines has grown from 22% to 30% in the last 5 years, far above the average growth of the market.

In order for our country to be a competitive player in the global market, to enable smooth exports of biotechnological products, international standards that will enable access to safe and effective quality of these products should be adopted in our country for their registration and licensing. In this context, we believe that our country's memberships to ICH (International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use) and PIC/S (Pharmaceutical Inspection Cooperation Scheme) are the right strategic moves.

We, as AIFD do not only internalise the objective of the 11th Plan to make Turkey the regional leader in clinical trials field, we also pursue with shared wisdom ways of increasing the investments of our members in line with this objective, despite the fact that almost all of the industry supported clinical trials are already conducted by AIFD members.

The policies determined in 2019 should now be implemented on the basis of action plans. In this regard, we maintain our excitement and determination to fulfill each of the goals of our country by taking concrete steps as a result of our joint efforts with the public authorities starting from 2020.

On the other hand, significant developments took place in 2019 in the localization policy in pharmaceuticals, which was built in five phases, with the completion of the first two phases. Claiming that localization policy is against the World Trade Organization (WTO) rules, EU brought the issue to the WTO platform on April 2, 2019, and first started a consultation process, but there was no consensus between the parties. Subsequently, the EU requested the establishment of a panel on 2 August 2019. As a result, a panel was established on September 30, 2019 with the decision taken by the WTO Dispute Settlement Body. The panel is expected to make its decision in 2021. While these developments in the international arena are ongoing, the public authorities have expressed in several platforms that the localization policy would not proceed beyond the second phase.

Modernisation of the Customs Union

The Ankara Agreement signed between the European Economic Community (EEC) and Turkey in 1963 anticipated that a customs union would be established in the transition period before Turkey’s full membership. Turkey and the EU established a customs union in 1996, following the decision taken at the Association Council meeting on 6 March 1995. Since this period, initially intended to be transitionary, for 24 years Turkey still is not a full member of the EU, and hence has no say in the decision taking mechanism of the EU. Tough Turkey is not taking part in decision taking mechanism as it is not yet a full member, Turkey is required due to customs union to assume the responsibilities that result from free trade agreements signed between the EU and third parties; the need to revise the existing customs union is on the agenda for some time.

The need to update and modernise the Customs Union agreement was on the table during the EU-Turkey summit decisions in November 29, 2015 and March 18, 2016; the European Commission has requested authorization to renew the customs union between the EU and Turkey from the Council of Europe on December 22, 2016. However, under the shadow of political developments between the EU and Turkey the issue has continued to be dragged through the end of 2019. However, we were told during our conversations with our stakeholders in the public sphere that the work in bureaucratic channels has not been ended, in particular the existence of the political will on the Turkish side to modernise the Customs Union is continuing.

It was agreed that Customs Union will to be updated in three issues. The first was to include agriculture, services and government procurement in the Customs Union. The second concerned abolishing restriction of free movement of goods covered under Customs Union on ground transportation from Turkey to the EU area. This would reduce transportation costs and speed up delivery times. The last one would allow Turkey to be a direct party in free trade agreements signed between the EU and third parties.

The second and third points are directly relevant to the pharmaceutical sector. Thanks to a reduction in red-tape, shipping times would be reduced. Delivery is a crucial issue for the pharmaceutical sector. There are specific standards that need to be met while storing pharmaceuticals during delivery. Any interference in delivery could have negative impacts on pharmaceuticals. Free movement in ground transport of goods covered by the Customs Union would alleviate this risk.

Being a direct party in the agreements between the EU and third parties will allow Turkey to expand its trade network. This also opens the door for Turkey to be a party in the possible TTIP to be signed between the EU and the USA.

The importance of both the current Customs Union and its planned modernization for the enhancement of policies and investment climate to advance the pharmaceutical sector has been emphasized in our talks with the Ministry of Trade. We emphasized that an updated Customs Union, which offers better protection of intellectual property rights including data exclusivity, incentivises innovation, includes government procurement and establishes dispute settlement mechanism, will be the most important structural development that would allow our sector to flourish.

AIFD-EFPIA-PhRMA Joint Strategy Meeting

AIFD represents Turkey at international platforms as a member of EFPIA (European Federation of Pharmaceutical Industries and Associations) and IFPMA (International Federation of Pharmaceutical Manufacturers & Associations). Additionally, our association has a close relationship with PhRMA (Pharmaceutical Research and Manufacturers of America), a globally active and influential US trade association.

Our association, which aims to use these international connections to contribute to the development of our country, discusses the developments, problems and opportunities in the pharmaceutical sector at a strategy meeting once a year with the participation of EFPIA and PhRMA representatives. As a result of this meeting, taking into account global trends, the economy and industry in Turkey, we aim to develop new solutions for further development.

In our joint meeting (Joint Strategy Session-JSS), which we held online due to the pandemic, on October 14, 2020, we discussed the prominent issues in our three main fields of activity: Industry and Innovation Policies, Science Policies and Legislation, Economic Policies and Market Access. Our 2021 Strategic Plan was established on the outcomes of this joint meeting.

International Platforms (PIC/S, ICH, BIO 2020)

Turkish Medicines and Medical Devices Agency (TITCK), with its autonomous and professional organization, is the leading entity to pave the way to advancing the pharmaceutical sector in Turkey. TITCK as Turkey’s medicines authority should stand out in the world similar to FDA for the USA and EMA for the EU: as an internationally renowned, respected, and competent medicines authority that approaches domestic and international issues with a global competitiveness mindset.

Our Agency has come a long way in this direction in a short period of 9 years since its establishment in November 2011. Especially in the last few years, steps such as sending employees to education abroad in order to increase the regulatory competency and agency are noteworthy moves of a long-term approach.

In this regard, we already acknowledged TITCK becoming a member of PIC/S (Pharmaceutical Inspection Co-operation Scheme) as the most important development regarding the sector in 2017. Turkey has entered a new period starting on 1 January 2018, after a lengthy process started back in 1989 with Turkey’s first application. With this new era, the quality and safety of medicinal products produced in Turkey will be assured and the technical barriers that have prevented the export of pharmaceuticals produced in Turkey to the global market will disappear.

As AIFD, we have always supported this crucial step, which we believe has boosted Turkey’s international prestige, opened up opportunities for Turkey’s pharmaceutical sector and led to international appreciation of TITCK’s capabilities.

Following membership to PIC/S in 2017, TITCK has started preparations for membership to ICH, The International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use. Once Turkey becomes an ICH member, Turkey’s pharmaceutical licensing processes and regulations will be further aligned with globally accepted scientific and technical standards.

During the assembly meeting in Kobe, Japan, on 2-7 June 2018, TITCK was voted in as “ICH Observer” and an important step was taken towards Turkey’s ICH membership. TITCK thereafter attended the ICH assembly meeting in the US with an ‘observer’ status on 14-15 November 2018.

Before the assembly meeting TITCK attended the International Pharmaceutical Regulators Program (IPRP) meeting, organized to facilitate information exchange and communication between regulatory bodies, among which are healthcare regulators of USA, Japan, China, Brazil and the European Union, as well as the DRA meeting.

TITCK's Vision to Become a Reference Authority
Providing full support to TITCK to make it a global brand and to become a reference authority has continued to be one of the strategic priorities of AIFD Health Science Policies SMC.

After TITCK was accepted as an ICH observer member in 2018, AIFD made many attempts to support TITCK in the entire process since the application process. TITCK's application for ICH full membership was approved unanimously at the Council's meeting on 27 May 2020. Turkey, will play an active role in global drug development and manufacturing processes. TITCK has taken its place among the few authorities on pharmaceuticals. TITCK will not only comply with ICH guidelines, but will also contribute to the creation of these guidelines.

The second ICH survey for observing, evaluating and monitoring the compliance of the member authorities with ICH guidelines was launched in December in 2020. ICH carries out this survey with the Center for Innovation in Regulatory Science (CIRS), with which TITCK collaborates in different projects. TITCK as a full member of ICH, will also participate in this survey as well as the industry representatives. After the finalisation of the survey, the results are planned to be shared with all participants and presented at the ICH General Assembly to be held in 2021.

Meetings were organized by AIFD, EFPIA and IFPMA among member companies in order to inform companies that will participate in the compliance studies of ICH standards, about the process and to increase the harmony between members. During these meetings, the representatives of EFPIA and IFPMA briefed participants about the full compliance process of ICH.

In support of the ICH full compliance process, AIFD made a call on 15 October to AIFD companies for the ICH Working Groups operating within IFPMA and applications were collected to ensure AIFD representation in the relevant groups. A total of 10 AIFD experts were selected for the IFPMA ICH Working Groups below.

1. E2D(R1) EWG
2. E19 EWG
3. Q9(R1) WG
4. E6(R3) EWG
5. E8(R1) EWG
6. E20 EWG
7. M13 EWG
8. Q2(R1) / Q14 EWG

We believe that the participation to IFPMA ICH groups will be an opportunity for AIFD to smooth the ICH harmonisation process of Turkey and it will improve communication between all stakeholders associated with ICH.

Draft Licensing Regulation and Guidelines
No progress was achieved in 2020 in the updating of The "Regulation on Licensing of Medicinal Products for Human Use", which was initiated in 2017 aimed to comply with the relevant legislation of the European Union.

We continued to express, both in academic and administrative platforms, our views and objections to the articles of the Draft Licensing Regulation that diverge from the EU legislation and contain significant incompatibilities with the acquis. We stated that the licensing regulation should be at international standards and be based on science.

We have shared at every opportunity, verbally and in writing with the top management of both the TITCK and of the Ministry of Health that we are fully behind the goal and vision of TITCK to become a globally accepted, respected reference institution that internalized international standards, and that we will make every effort to support it.

In this context, the basic regulation provisions objected by AIFD are the following:

• "Original" medicinal product and "Generic" medicinal product terminology should not be changed
• Inclusion of the term "High similarity" in the definition of "Biosimilar Product"
• Specifying the re-evaluation criteria specified in the definition of "Production Location"
• Shortened applications should not be accepted during the "Data Exclusivity" period
• Requesting clinical trials in abbreviated applications of "Combined Products"

Draft Variation Regulation and Guidelines
The finalisation of the evaluation of regulations and guidelines related to the variations of licensed pharmaceuticals for human use in line with the international standards will be an important contribution to assure supply continuity, patient access and simultaneous evaluation with international authorities.

It was observed that there are significant divergences between the variation evaluation and approval processes currently implemented in our country and the international standard methods; our observations and proposals to eliminate the divergences in the processes were submitted to the Agency in October with an official letter

BIO Convention-BIO Digital 2020 & BIO Startup Program & BIO Startup Corona Sprint Program

One of the most important contributions of AIFD and member companies of Turkey's economy and society is to support innovation. AIFD published reports on R&D in pharmaceuticals in Turkey and the world, policy recommendations and development areas to attract attention to innovation. In line with this, AIFD launched a new program called “BIO Startup” to support the startups that are the carriers of innovation. The main motive of this approach is the fact that innovations are generated by startups. As a matter of fact, out of 118 new products approved between 2016-2018 by FDA, 65% were generated by startups.