The report, which in a nutshell assesses countries' desirability as a destination for investment from the perspective of biotech investors, was released on Thursday at the 3rd Annual BIO International Congress in Washington, D.C. -- an event that brings together thousands of biotech executives who hold the purse strings to the estimated $100 billion that the industry invests in research and development (R&D) every year.
The Scorecard is intended to illustrate various nations' strengths in such categories as work force availability, education and intellectual property protection, and what countries need to improve their capacity for creating biotech innovation. While Brazil, Russia, India and China (known collectively as BRIC) moved up the rankings to become “game changers,” Turkey maintained its lackluster performance moving only a couple of ranks up to become 39th this year.
“Turkey's rankings are pretty disappointing,” Jeffrey Kemprecos, executive director for Public Policy and Corporate Responsibility at MSD Pharmaceuticals for Eastern Europe, Middle East and Africa, told Today's Zaman. “Thirty-nine out of 48 is nothing to brag about, especially when you consider that countries such as Saudi Arabia and Malaysia score higher.”
The report is especially scathing for Turkey because the country has declared biotechnology a strategic sector that was to be promoted as a means of improving the country's overall investment climate.
The panel moderated by Fareed Zakaria, author, journalist and host of CNN's “Fareed Zakaria GPS,” was delivered to an audience of executives, many of whom were reported to have used the Scorecard as a key reference when deciding where to invest. Panelists included George Baeder, partner and vice president, Monitor Group Asia; Anula Jayasuriya, co-founder, Evolvence India Life Science Fund; Jay Siegel, chief biotechnology officer, head, global regulatory affairs, Johnson & Johnson; and Dato' Iskandar Mizal Mahmood, CEO, Malaysian Biotechnology Corporation Sdn Bhd (BiotechCorp).
“It is not a surprise that Turkey is not a leader,” Dr. Yali Friedman, editor of Scientific American's Worldview Scorecard told Today's Zaman in a phone interview. “The report tells us that there are opportunities for improvement,” he said, noting that many companies were interested in investing in Turkey.
But, according to many, an overall environment conducive to attractive investment is simply not in place in Turkey. “There are a lot of things [needed] to improve the biotechnology innovation capacity of the country” Friedman said. “Some of the things that we noticed were weak IPR [intellectual property rights], a relatively low number of patents and weak capital for biotech ventures.”
Last year's Scorecard quoted John Steele, director of international government affairs for Eli Lilly and Co., who pointed to Turkey as a country that failed to tap into its potential. “Last year they instituted a pricing decree … their savings fell disproportionately on innovation-based companies and currently they are not approving marketing authorizations without good manufacturing practices (GMP) site inspections which is blocking new product approvals. This is a place with great potential that can attract biopharmaceutical investment, but their actual policies are undermining this goal.” The improvement this year was only marginal.
Friedman, like most participants that Today's Zaman spoke with said the government has a long way to go to resolve this by strengthening patent laws. The strength of patent laws have long been shown to correlate positively with overall foreign direct investment (FDI) attraction.
Other areas for improvement Friedman pointed to included encouraging more Turks to enter scientific fields and investing heavily in R&D. This “is not simply matter of government subsidies. There are other measures the government can take to promote biotech ventures. Perhaps encouraging the establishment of foundations, tax breaks for R&D, creating venues for companies to find partners overseas."
The spillover effects associated with biotech resources are high. Research based biotech companies spend a disproportionate amount of their earnings on R&D when compared to other sectors such as the automotive, defense and high tech. And this spending creates high-tech jobs. Proponents of creating a burgeoning biotech sector are also quick to point out that creating a robust sector also helps reduce a country's dependency on imported drugs, will improve gross domestic product (GDP) and will help improve the current account deficit (CAD). The report also had a section that evaluated brain drains/brain gains.
“Companies around the world are interested in the Turkish market because of the entrepreneurial spirit. The problem is Turkey's ability to absorb,” Friedman said. “Because of weak IPR protection, it's not the place to invest.”
Kemprecos told Today's Zaman that last year Turkey was only able to export a mere $500 million in pharmaceuticals products, while competitors such as Ireland managed to export more than $6 billion even given the economic downturn.
Murat Aşık, external affairs director at MSD Turkey, emphasizes that the Scorecard is not so much trying to say that the country is doing badly, but rather a way to emphasize that there is room for improvement. “We will get our deserved place,” he told Today's Zaman. “We [Turkey] are planning to be amongst the top ten economies in the world by 2023. If we want to achieve this, we should also be in the top ten of the Worldview Bio-Innovation Scorecard as well.”
The BIO convention is the largest global event for the biotechnology industry, offering networking and partnering opportunities with policymakers, scientists, CEOs and journalists , and hundreds of sessions covering biotech trends, policy issues and technological innovations. The convention also features the BIO Business Forum, a unique platform for biotechnology and pharmaceutical companies, academic research institutions,and investors from around the world to gather and discuss strategic opportunities.