Diabetes Delivers China Strength For Merck
Executive Summary
Merck & Co reported continued good growth in China in the second quarter, helped in large part by its diabetes franchise, and the company is looking to further strengthen its presence in this market through disease awareness efforts and a major recently inaugurated R&D center.
China continued to provide robust double-digit growth in the second quarter for Merck & Co. Inc., and in spite of increased generic and brand name competition for its best sellers including Januvia (sitagliptin) for diabetes, the US firm saw key brands keep growing across emerging markets.
In the primary care Januvia franchise, strong double-digit growth in emerging markets and China is going to continue over time, Adam Schechter, executive vice president and president for Global Human Health, predicted during an earnings call.
“We really have not gotten National Reimbursement Drug List [NRDL] approval for Januvia in China yet. So once that's achieved, I think that that represents another opportunity for us for growth of the Januvia franchise outside of the US,” he noted.
Inclusion in the list would provide wider reimbursed access through China’s national health insurance schemes for Januvia, which was launched in China in March 2010.
In China, the US firm is taking various steps to improve disease awareness and the availability of modern therapies in the diabetes sector. It held the Sixth Incretin Forum in Shenzhen in March, gathering experts to discuss China’s diabetes market and address precise and localized treatment solutions for Chinese patients, as well as the effective management of diabetes within a digital healthcare system.
Linong Ji, the director of endocrinology at the Beijing People’s Hospital, pointed out at the forum that the prevalence of diabetes in China is now close to 10% of the population, with the total number of patients exceeding 100 million already. However, the awareness rate of the disease is only 40%, he noted.
Merck plans to organize more than 40 incretin seminars in 19 cities across China this year to expand its presence in diabetes. By building a professional academic exchange platform, the company hopes to improve knowledge levels of primary doctors to improve China's overall diabetes care and prevention levels.
The US firm introduced the fixed-dose combination Janumet (sitagliptin/metformin) in China in January 2013, and the company established a new local diabetes business unit in July 2015 to help grow the franchise.
International (ex-US) sales of Januvia/Janumet rose 8% to $745m in the quarter; the company does not break out product sales in emerging markets.
Emerging Markets In Q2
In the second quarter, ex-Venezuela and excluding foreign exchange effects, Merck reported emerging markets growth of about 6%, with China continuing to log a strong increase at 11%. “So the growth, albeit not as good as it was a couple years ago, continues to be robust,” Schechter said.
On a US dollar basis, Q2 Asia-Pacific pharma sales were 8% higher at $890m while China rose 5% to $353m.
“Lumping emerging markets together today is not a good idea because you have very different dynamics in terms of what's occurring in a market like China versus what's occurring in a market like Russia or what's happening in Argentina,” Schechter noted.
Therefore, Merck has adjusted its emerging markets strategies and now focuses country-by-country on what the opportunities for growth are and “titrates” its expense base in those markets based upon the opportunities. “But I do believe that the emerging markets will provide growth going forward and remain an important opportunity for us,” he added.
In April, Merck’s new R&D center in Beijing began operations, which is the company’s second largest research facility outside the US with a total investment of $3bn. The 4,700 square meter site is focused on new drug discovery and development for cardiovascular disease, infection, immune diseases and respiratory system diseases.
The new center is also the company’s only R&D hub to carry out research specifically for a disease spectrum relevant to Chinese and Asian populations.
China Alliances
Merck set up an alliance with the China Cardiovascular Association (CCA) at the end of May, and the two partners will work together in a number of projects, including gradually developing standardized cardiovascular evaluation and treatment services based on healthcare big data, risk-stratified care management for patients with abnormal blood lipid, and promoting blood pressure management for patients with a high salt diet.
Merck and CCA will also jointly make efforts to enhance communication and education between academia, doctors and the public, and to introduce innovative drugs and technologies into China.
Under a market promotion service contract signed back in 2012, Zhifei Biological Product, Merck’s vaccine business partner in China, said on July 20 that its service contract for the human papillomavirus vaccine Gardasil remained valid despite the termination of two other contracts for the hepatitis A vaccine Vaqta and pneumococcal vaccine Pneumovax.
In July, Merck China revealed that clinical trial data aggregation and analysis for Gardasil had been completed and relevant documents submitted to China’s Center for Drug Evaluation (CDE) for review. Currently the clinical data are being progressed at the public notification stage for on-site verification.
GlaxoSmithKline PLC’s Cervarix recently became the first HPV vaccine to be approved in China (Also see "China Approves First HPV Vaccine But Can GSK Secure Its Lead?" - Pink Sheet, 19 Jul, 2016.).
From the editors of PharmAsia News.