It’s been less than a year since Beijing cut back red tape on drug approvals and already Chinese patients can expect to get some breakthrough medicines before Americans.
Britain’s AstraZeneca Plc will bring its newest anemia treatment to pharmacies in Shanghai and Beijing about a year before it’s available in U.S. cities. It’s a similar story for the bowel cancer remedy that Indianapolis-based pharmaceutical giant Eli Lilly and Co. is making with a Chinese partner.
“Twenty years from now, China’s going to have a market that’s comparable, or possibly bigger, than the U.S.,” said Daniel Mahony, a health-care fund manager with Polar Capital LLP in London. “Getting first approval in China might sound unusual today, but may not be five years from now.”
After decades of being starved of innovative treatments for serious conditions like cancer, diabetes and kidney disease, China’s 1.4 billion people are becoming global pharma’s prime target. They’ve got more medical insurance than ever and millions are paying out of their own pockets for western treatments that aren’t covered.
It’s all part of President Xi Jinping’s push to reinvent China’s pharmaceuticals industry, which he’s notably spared from the escalating trade war with Donald Trump. In May, even with tensions in full swing, Beijing eliminated tariffs on 28 imported drugs and lengthened patent protection to deflect criticism that its intellectual property protections were too lax.
Until recently, negotiating China’s tedious drug approval process blocked many prescription medicines from getting in. By its own count, China’s Food and Drug Administration said fewer than a third of the 433 new treatments approved in developed countries reached China between 2001 and 2016.
Then last October, the regulator abolished a rule that had required companies to repeat all drug trials in China before giving its blessing. That move, part of broader reforms, was a game changer because it meant big pharma could conceivably roll out blockbusters in China at the same time as the U.S., if not sooner.
“People have gone from caring about whether they have enough food to ‘If I get cancer, what’s going to happen?’ ”
Roxadustat, the anemia medicine AstraZeneca is developing with San Francisco-based FibroGen, is putting the new system to the test. China’s FDA gave it priority review and is evaluating it on a rolling basis: as researchers finish each trial, the results are shared. By comparison, they’ll apply to the U.S. FDA in the first half of 2019, when all trials are done.
“It’s a big milestone,” said Ludovic Helfgott, head of the kidney, heart and diabetes unit at Cambridge, England-based AstraZeneca, which expects the regulator’s go-ahead by year-end. “It’s going to be the first time that a global brand, a global product, a global medicine would be first authorized in China.”
Even with cancer, there’s progress on the horizon. Eli Lilly is collaborating with Hutchison China MediTech Ltd. of Hong Kong to introduce fruquintinib, a treatment for colorectal cancer, in China after it’s approved, probably later this year. China MediTech will then roll it out in the U.S. and Europe. Almost one in five sufferers are in China, according to the World Health Organization.
Lilly has agreed to a series of payments to Hutchison China of up to $86.5 million when fruquintinib reaches certain research milestones. Analysts believe the drug could generate more than $2 billion in sales as a colorectal cancer treatment and up to $4 billion if it is used for other cancers.
While it may still be faster to get approval in the west, the pressure for China to catch up has intensified. Its population is aging rapidly and has significant unmet medical needs after shifts in diet, pollution and heavy workloads increased the prevalence of obesity, diabetes and inflammatory conditions like asthma and bowel disease.
Consumers, especially in the surging middle class, are taking matters into their own hands, as the rare protests in Beijing last month over low-quality vaccines attest. They don’t want to solely place their trust on locally made drugs and 3,000-year-old traditional remedies using herbs, and techniques like massage and acupuncture. Many travel abroad, and even go into debt, to get drugs for suffering family members. A recent Nature report said only four of the 42 cancer medicines approved globally in the past five years are sold in China.
“People have gone from caring about whether they have enough food to ‘If I get cancer, what’s going to happen?’,” said Xin Tao, a Washington-based lawyer with Hogan Lovells LLP, who follows Chinese drug regulation.
He pointed to the popularity of a Chinese low-budget film called “Dying to Survive” last month as evidence the nation had reached its tipping point. Based on the true story of a businessman with leukemia who imported cheap generic drugs from India to save himself and fellow patients, the movie is one of the highest-grossing in Chinese cinema history.
“We didn’t predict the rapid expansion of the Chinese market. Now people think we’re brilliant, that we had a crystal ball”
In a push to improve coverage, more than 100 western medicines were added to public insurance policies last year, including AstraZeneca’s Brilinta heart drug, and cancer treatments like Roche Holding AG’s Herceptin and GlaxoSmithKline Plc’s Viread—some costing as much as 50 percent less than they do in the U.S. or Europe.“We didn’t predict the rapid expansion of the Chinese market,” said Chris Chung, FibroGen’s vice president of China operations. “Now people think we’re brilliant, that we had a crystal ball.”
Anemia, a deficiency of red blood cells that can damage organs if not treated, has been on the rise in China as a side effect of chronic kidney disease, a condition plaguing tens of millions. Roxadustat tricks the body into thinking that oxygen levels are low, triggering an increase in hypoxia-inducible factor (HIF) which boosts levels of red blood cells and hemoglobin. It’ll be manufactured locally in a plant FibroGen set up as part of expanding its local presence this decade.
Showing it’s serious about speeding up approvals, China’s FDA is increasing its staff to as many as 1,000 by year-end, compared with under 100 in 2014. Since then, it’s reduced the backlog of drugs—mostly generics—waiting for a green light to 4,000 from 19,000.
With researchers at health-data firm Iqvia Holdings Inc. predicting China’s drug market will grow 30 percent by 2021 to $170 billion, big pharma isn’t wasting time. Takeda Pharmaceutical Co., the Japanese drugmaker best known for its diabetes treatment Actos, plans seven roll-outs in China in the next five years, more than anywhere else.
“Our goal in the mid-term is to include China from the early stages of development,” said Christophe Weber, Takeda’s chief executive officer.