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Chinese biotech companies are emerging as serious competitors in the global market as the country's drug development landscape claims industry attention once more.
China’s drug development landscape has once again taken center stage in industry discussions. This time the focus is not only on inclusion of China in global trials, but also on how Chinese biotech companies are emerging as serious competitors in the global market.
China always has been a key strategic and commercial focus for multinational biopharmaceutical companies. As Asia’s largest market and global patient pool for many diseases, China accounts for 19% of the world’s population and 22% of the world’s population over the age of 65. China’s health care providers treat three to four million cancer patients annually, representing 37% of lung cancer patients, 44% of stomach cancer patients and 52% of liver cancer patients across the globe. The People’s Republic has 110 million diabetics and another estimated 500 million pre-diabetics. An economic powerhouse, China represents 15% of the world’s GDP and 11% of global pharma expenditures.1
Even though these statistics suggest opportunities exist for global biopharma companies to introduce innovative therapies into China, regulatory complexity and timelines historically have excluded or delayed China in global clinical development programs. China’s National Medical Products Administration (NMPA) began to overhaul the country’s regulatory landscape in 2018 in acknowledgement of these challenges. Significant changes have taken place, including:
This means China can no longer be an afterthought in global drug development. The country now should be considered an essential component of an integrated global strategy.
As regulatory pressures recede, other challenges have become more prominent. One significant example deals with an industry talent shortage and scarcity of qualified and experienced clinical trial sites in China. The country can only field approximately 800 qualified centers to run clinical trials, compared to more than 10,000 in the United States. As a result, there is fierce competition for available sites and principal investigators. Despite an increase in the number of qualified CROs that can handle global studies, consistency of quality within the industry is still questionable, particularly full-service and subcontracting capabilities.
There are additional challenges for non-Chinese companies including China as a participant in global development programs: the potential treatment paradigm, language and cultural differences. Standard of care or referral routes can be quite different in China versus the rest of the world.Performance endpoints also can be affected due to cultural influence on variables such as patient-reported outcomes or physician assessments.
China’s own biotech industry also is entering a new phase of innovation and ambition. In 2018, China contributed to 7.8% of the global drug innovation pipeline and 11.6% of new drug launches. Chinese biotech and pharma companies now also are sponsoring global clinical trials. For instance, there are 50 IND applications by Chinese companies in the U.S. compared to single-digit numbers five years ago. Necessity drives this transformation as much as ambition. Many Chinese pharma companies have focused on generics, but domestic drug pricing and reimbursement reforms, such as a government centralized drug procurement policy that awards low bidder contracts a guaranteed sales volume of 60-70% of the total market for a year, are reducing drug prices and encouraging generic drug industry consolidation. Companies must not only focus on innovative drug development but also global expansion to survive. Biotech companies founded in China are poised to sell their medicines worldwide and have started conducting clinical trials in the U.S. and internationally.
For many Chinese drug developers, running international clinical trials outside their own country is unfamiliar territory. They face considerable challenges finding the right CRO partner possessing both the global expertise and cross-cultural understanding to help them bridge societal differences. Team chemistry is a crucial factor affecting a sponsor–CRO project team relationship, as teams must work closely and relate to each other for extended periods of time, often on projects involving multiple countries and large investments. Sponsors need to know that all teams involved share the same values, work ethic and general approaches. Conversely, CROs must be cognizant of sponsor cultural differences and adjust their business practices accordingly.
At the same time, Chinese biotech companies should adapt their practices through the adoption of a more holistic approach to their development programs and strategic planning, as their commercialization strategy should look beyond FDA or EMEA approval. As opposed to U.S. and European practice, the Chinese pharma market historically has not required health care outcomes data for reimbursement. Previous pricing and reimbursement have focused solely on drug cost rather than drug value. It’s now common practice for pharma and biotech to incorporate this research into their clinical development programs for future value dossier development
As part of Beijing’s “Made in China 2025” industry plan, the pharmaceutical sector has been targeted for expansion. One way to place China’s drug development industry on par with the rest of the world would be to develop a viable means to establish competitive prices, especially on cancer drugs such as PD-1 inhibitors. Last year, leading global companies began introducing their bestselling cancer drugs into China only to find Chinese companies undercutting them with their own patented PD-1 inhibitors costing a third of what multinational drug makers charge.
As China’s pharma industry continues to evolve and mature, it is hoped that overseas expansion and greater innovation will be exported to serve the interests of patients through effective treatments at affordable prices. In addition, greater engagement in the global market has the potential to make the local market and clinical landscape more hospitable to global developers - improving patient outcomes both in and out of China.
Albert Tsai is the Vice President, Regional Medical Officer, at PPD Biotech