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Candan Carabagli: The East is Up


Pharmaceutical Executive

Pharmaceutical ExecutivePharmaceutical Executive-10-01-2011
Volume 0
Issue 0

Candan Karabagli, CEO, Abdi Ibrahim A.S.

As the circle of engagement in pharma expands from the mature markets to a more diverse array of middle-income countries, a new business player with global growth aspirations is emerging: the locally based, high-margin generic, family-owned enterprise. Executing to achieve that market growth is increasingly in the hands of a new generation of professional managers, often with experience outside the industry and beyond the confines of the local market. Candan Karabagli is a symbol of this transition in her role as CEO of Turkey's largest pharmaceutical company, Abdi Ibrahim, where she is responsible for consolidating the company's lead position in Turkey through more in-house R&D and licensing deals with innovative companies while building a stronger regional footprint that could ultimately extend to the developed world.

Candan Karabagli CEO, Abdi Ibrahim A.S.

Karabagli is repositioning the company around four basic competencies. First is to ensure Abdi Ibrahim is flexible enough to adapt to frequent changes. "The multinational drug makers don't move that fast, so agility and speed are important competitive differentiators," she says. The second competency is to better understand the customer, with the aim of expanding the revenue base by engaging with constituencies beyond the physician. "We must adopt a full-service mentality when we deal with different parties in healthcare, each of whom has special needs that we must identify." Third is to create a broader product portfolio by expanding into new delivery and treatment areas. The fourth competency is to build up the product licensing operation to achieve a balanced therapy portfolio divided 50 percent each between generic/consumer and innovative medicines. "Each of these themes is built into the Vision 2021 strategy platform that I developed upon my arrival, which focuses heavily on keeping the company profitable for the next generation and on developing new capabilities."

Karabagli believes strongly that managers like her are being recruited precisely to think and act differently in response to a dramatic realignment in the staid business of Big Pharma. "Turkey is a good example, as we are undergoing a transition from a market focused on Rx reimbursement to a more consumer-oriented platform characterized by a bigger role for private insurance as well as increasing reliance on out-of-pocket pay. The definition of 'health professional' is also expanding to include new constituencies such as pharmacists, nurse practitioners, and medical officers in the private insurance market. And it goes without saying we have to pay more attention to the payer—who also is likely to be a patient."

Karabagli is also putting a fresh cast on the company's culture. The search is on for new management talent; having a global mindset that can adapt to the way that business is done outside Turkey is key. Karabagli also relates the importance of helping employees distinguish between strategic decisions taken for the long-term and the day-to-day work of meeting revenue targets in the current year's operating plan. "I have a critical task in investing for the future, to implement our 2021 vision, without turning people's focus off what is required to deliver results now." To do that, Abdi Ibrahim is scrutinizing its activities, moving from an ad hoc operation to something more strategic. The expertise to make this shift does not yet rest in-house, so investments in the necessary human and capital infrastructure have to be made. "We don't intend to start from scratch."

At the same time, Karabagli wants to ensure the company remains aware of its roots, noting that the key "disruptive" trend facing the industry over the next five years is the genericization of the product stream. Patent expirations and a less-than-stellar new drug pipeline means that Big Pharma is moving to make a claim on the generic market. Warns Karabagli, "We have no intention of ceding the generics space to the multinationals." One reason is the collaboration Abdi Ibrahim has with the government, as a "national champion" in medicines. Despite the winds of change, 85 percent of all drugs consumed in Turkey are still paid through the public sector. "Foreign drugmakers can't compete as effectively with the access the domestic industry has under the current system."

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