New Turkish Biosimilar Insulin Glargine Poses Challenge For Sanofi’s Lantus
Executive Summary
Koçak Farma’s launch of a biosimilar version of Lantus could encourage Sanofi to invest in local production in Turkey, especially if the originator is at risk of being left off the reimbursement list.
A Turkish biosimilar version of the antidiabetic drug insulin glargine is set to give Sanofi’s originator product Lantus a run for its money, and could spur the multinational to accelerate plans to manufacture insulin in Turkey.
The insulin glargine market in Turkey is worth around TRY288m ($83m), with about 12 million diabetes patients and numbers on the rise as a result of dietary and lifestyle factors. Until this year all insulin glargine products – Lantus and Eli Lilly & Co./Boehringer Ingelheim GMBH’s version, Basaglar KwikPen – were imported.
At the beginning of 2017, though, the Turkish company Koçak Farma received marketing approval for its locally produced biosimilar, Insülin Glarjin, from the ministry of health, and subsequently launched the product, which is understood to be the first biotechnological insulin to be manufactured locally.
In a string of interviews in August, the company’s CEO Hakan Kocak underlined the importance of domestic production and called on the government for more support against imported products.
Although Kocak didn’t give any specific data about sales of his company’s product, he said that its market share had been increasing consistently.
Lantus has long been among the top selling drugs in Turkey, and in 2016 it was the second-best selling product in the general market with a turnover of TRY214m. Kocak Farma claims that it can reduce spending on insulin glargine by offering a lower price so that its product replaces the imported drugs.
The new competition might cause Sanofi to accelerate the investment process to which it committed itself last year. The company has been negotiating with the government on local insulin production, although it is not clear whether production of Lantus is on the agenda, and so far the project has not borne fruit.
The company has a large factory in Luleburgaz, near Istanbul, which was established with an investment of €610m and is the Sanofi group’s third-largest production facility globally. Apart from Sanofi products the factory also produces for other companies, and in value terms, 45% of all products on the Turkish market are manufactured there. The facility includes an R&D center employing about 60 researchers and focusing mainly on generics and biosimilars.
Sanofi supports the government’s policies to encourage local manufacturing – Sanofi Turkey president Fabrizio Guidi
Sanofi Turkey general manager Fabrizio Guidi says the company supports the government’s policies to encourage local manufacturing, noting that 80% of its products for the Turkish market are produced locally. He has said that the company intends to increase the use of its total production capacity from the current level of 68% to 77% by 2018. If Sanofi decides to go ahead with its new insulin investment, it will need to find a local partner, transfer new technology, and offer a price low enough to satisfy the government.
The health ministry and the Social Security Institution (SGK) want to encourage local manufacturing to replace imports, and have provided a range of incentives to encourage multinationals to make high-tech investments in the country, including-track licensing, quick entry to the reimbursement list, and purchasing guarantees by the public sector.
More importantly, the government has a policy of excluding imported products from reimbursement when locally produced drugs are available in the same therapeutic categories. In February this year, it issued a list of 54 branded drugs that would removed from the reimbursement list next year unless their manufacturers agreed to local production. (Also see "Turkey: Produce Selected Drugs Locally Or Lose Reimbursement" - Pink Sheet, 4 Mar, 2017.)
The tactics seem to be working: in June this year, it was disclosed that multinational companies had agreed to manufacture locally around TRY1.8bn of currently imported products. (Also see "Firms Commit To Local Production As Turkey Seeks Import Cuts" - Scrip, 7 Jun, 2017.)
With 12 million diabetes patients in Turkey, it is unlikely that Lantus will be excluded from the reimbursement list, but that may happen at some point in the future, depending on the performance of Insulin Glarjin.
Established in 1971, Kocak Farma markets drugs in a number of therapeutic areas including gynecology & obstetrics, urology, tuberculosis, cardiology, oncology and general health protection. Last year it acquired the serum business of Baxter Eczacibasi, which had a 60% share in the Turkish serum market.