China Insights

Biosimilars in China: Charting success in complex market

Maartje van Diepen

Associate Director

Health 2014 05.01.2015 / 10:45

Biomedical Full

Why the path to commercial success is arduous for global drug companies.

Biosimilars is one of the fast-growing segments in global pharmaceuticals, with China poised as an important and attractive market expected to see exponential growth. In fact, China has set its sights on being a world leader in innovative drug development. In its 12th five-year plan, developing the biomedical industry is one of China's key goals, with the objective to provide the country's domestic market with affordable follow-on versions of biological medicines, or biosimilars.

According to a study by Kantar Health on China's biosimilars market, acceptance of biologics and its copy drugs in treating diseases such as cancer and inflammatory diseases (rheumatoid arthritis and ankylosing spondylitis*) is growing. The study also found that the use of biologics in oncology treatment will increase over the next five years, with most biosimilars produced by multinational pharmaceutical companies. In the case of rheumatoid arthritis, however, the market is driven by local biosimilars rather than products from multinational companies. The most widely used biosimilar in treating rheumatoid arthritis is Yisaipu, produced by CP Guojian.

Despite huge market potential in various therapies, the path to commercial success in biosimilars has proved arduous for many global drug companies. Price is one of the key factors that determine whether a biologic or biosimilar is widely accepted in China. Generally, Chinese patients are price-sensitive, and they expect a biosimilar to have a lower cost than its originator by at least 50 percent. Physicians also expect at least a 35 percent discount over the originator price.

In the case of some therapy areas where patient loads are heavy, acceptance of biosimilars is unexpectedly low. For example, China has heavy patient loads in rheumatoid arthritis and ankylosing spondylitis, although only a portion of these patients are diagnosed and treated. While the use of biologics is higher in ankylosing spondylitis than in rheumatoid arthritis, compliance is often poor due to high cost of treatment. Most physicians recommended treatment for six months; however, more than half reduced the dosage after just three months. Kantar Health's research also found that over one-third of patients stopped using biologics when their symptoms improve and, in most cases, the reason is cost.

However, some drugs enjoy high acceptance and compliance rates among patients, despite the high prices. One example is MabThera (rituximab), a biological drug used to treat non-Hodgkin's lymphoma (NHL). Because MabThera is the most effective drug in treating NHL, patients usually try their best to use it, even if they can only afford two to four cycles. The price of MabThera has not gone down in over 10 years, and almost all the physicians surveyed welcome a biosimilar for this drug. 

To broaden patient usage and encourage more doctors to prescribe these drugs, some pharmaceutical companies offer patient assistance programmes (PAPs). PAPs provide financial assistance to patients through offering either a drug free for a set period of time, free drugs bundled with paid ones, or direct discounts to the prices of drugs. Herceptin (trastuzumab), a drug that is widely prescribed for HER2-positive breast cancer patients, is a recent example of a successful PAP. Its program started with selected patients and has helped fuel Herceptin's growth by narrowing the price gap with its biosimilar.

Another challenge for pharmaceutical companies is how to distribute their drugs in China. Getting on a hospital's drug list is difficult due to a stringent drug distribution policy. For example, hospitals are restricted to stock no more than two medicines of similar molecules and brands under the same treatment category. Doctors are required to meet a medication-expense ratio, which means on average, they have to ensure that the costs of medicines they subscribed to their patients do not exceed a certain proportion of the patients' total expense at the hospital.

Retail pharmacies near hospitals have become attractive alternative dispensaries for biologics and biosimilars. Most biologics are now bought in retail pharmacies. In fact, physicians recommend that their patients buy biologics in retail pharmacies if they are not stocked in the hospital. Retail pharmacies are not restricted in the number of molecules they can dispense or the number of brands under one molecule. Their drug sales are also not included in the medication-expense ratio.

The trend of retail pharmacies as a distribution channel for biologics and biosimilars has released physicians in China from the pressure of keeping the medication-expense ratio. In Kantar Health's study, more than 50 percent of physicians refer their patients to retail pharmacies because of this reason.

Source: Kantar Health

Editor's notes

*Ankylosing spondylitis is an inflammatory disease that can cause some of the vertebrae in the spine to fuse together.

* To know more information, data and analysis of China's health market, please contact us.

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