Revisions to Brazil's drug price framework are coming - what's included and what's missing? Our analysts provide th… https://t.co/8s17gnKCXf
China: Pharma in the year of the Ox
As China enters the year of the Ox - a zodiac sign symbolizing honesty, reliability and stability - we take this opportunity to look at what the healthcare sector can expect in the world's second-largest pharmaceutical market. Overall, prospects for the industry look very promising, with total health spend and pharmaceutical sales in China forecast to grow by 8.20% and 9.8% in 2021, respectively. Growth is driven by a combination of continued strong macro-economic growth and favorable demographics, as well as a continued rise in household incomes. In this blog post, we highlight the main trends for the new year in China.
Chinese biotech ambitions continue to rise
The race to successfully develop a COVID-19 vaccine belies greater ambitions from China to establish itself as a leading player in biotech development. In 2021, Chinese authorities are expected to move even more aggressively to encourage and sponsor domestic biotech R&D; and pro-innovation policies are starting to bear fruit, particularly for chimeric antigen receptor T-cell (CAR-T) therapies.
China will continue to engage in vaccine diplomacy
In the week starting 8 February 2021, China made new COVID-19 vaccine donations to Cambodia, Equatorial Guinea, Laos, the Philippines, and Zimbabwe. Sinopharm's COVID-19 vaccine continues to be the primary vaccine donated by the Chinese authorities.
Increased pricing pressure
Six months after the latest centralised drug procurement, China on 8 February released the results of its fourth round of joint procurement. The key lesson is that the substantial price cuts conceded by bidders remain stable - at 52% - compared to previous rounds of centralised drug procurement. Pressure on drug prices will continue in 2021 as China adopts an increasingly dynamic approach to NRDL updates, which are now expected to occur on an annual basis.
The high price cuts involved in each round puts pharma multinationals in a very difficult situation, where the probability for them to be able to compete meaningfully against local players is extremely small. Only 4% of bids were won by overseas drug makers during this 4th round of centralised drug procurement.
Faster time to market for imported innovative treatments
Overseas drug makers are likely to benefit from faster time to market for imported innovative and rare disease treatments, which are eligible for accelerated approval pathway and breakthrough therapy designation. The latest list - issued in November 2020 - of treatments eligible for priority review includes 85 imported drugs. Another space to watch is the rare disease area: China is expected to take further steps to facilitate market entry for imported rare-disease treatments, after publishing its first list of rare diseases in 2018.
Amendment to patent law
China has published its fourth amendment to its Patent Law, which is to come into effect on 1 June 2021 and introduces provisions for patent linkage and patent term extension. The regulations, allowing swift legal challenges of patent violations, are expected to benefit originator manufacturers.
Market exclusivity for first-to-market generics
To balance the stronger patent protection provisions, China is simultaneously seeking to encourage early generic competition by offering one-year market exclusivity to producers of first-to-market generics. That said, the increase in generic competition is not expected to significantly challenge patented, innovative imported treatments in the short term.
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