New Products, Expanding Coverage To Propel AstraZeneca In China
Executive Summary
For the first time, new product launches start driving growth for AstraZeneca in China where a new national reimbursement scheme is likely to further expand market access to five products but that comes with a steep price cut.
As the most important emerging market for AstraZeneca PLC, China sales grow 3% (8% constant currency) in the half of 2017, aided by the strong start of newer products, including new launches of anti-diabetic Forxiga (dapagliflozin) and TM790-mutation targeting third-generation EGFR inhibitor Tagrisso (osimertinib).
"Tagrisso expanded on its impressive global launch and recorded the first sales in China," noted AZ CEO Pascal Soriot during the company’s quarterly earnings call.
The treatment for non-small cell lung cancer delivered $23m in sales after gaining approval only in March, amid China FDA's notably accelerated approval of innovative new drugs, many of which are imported drugs from multinational companies. Tagrisso is the first AstraZeneca medicine to be approved under the CFDA’s priority review pathway.
That performance fuels hope that innovative new drugs will be able to offset the impact from divesting non-core products and become a major revenue generator in the world's second largest pharma market.
In October, AZ sold its antidiabetics Byetta (exenatide)/Bydureon (exenatide extended release) to China's 3SBio Inc. (Also see "AstraZeneca Divests Antidiabetics To 3SBio In New China Growth Plan" - Scrip, 12 Oct, 2016.).
"So, as soon as we get out of this divestment part, we will return to this very high growth rate in China. we have a business that is starting to make a difference in China, it's very big," stated CEO Soriot.
China has seen its cancer occurrence rate rising rapidly and lung cancer is the most prevalent cancer type among Chinese males and the second one in females.
Overall, the first half for AZ has been somewhat slow in emerging markets, where total sales reached $3.004bn, up 3%. Out of that, China sales stood at $1.419bn, accounting for nearly 50%. In the first quarter, the company reported (Also see "China Leads Strong AstraZeneca Emerging Markets Charge In Q1" - Scrip, 2 May, 2017.)
Newer Products, Higher Growth
Among the plethora of the new approvals AZ secured another key approval for Forxiga - the first sodium-glucose cotransporter 2 (SGLT2) approved in China and indicated to treat type 2 diabetes.
Forxiga has delivered particularly stellar growth in emerging markets, up 83%, compared to average growth of 22% and 24% for Europe. In effect, the SGLT2 inhibitor with $457m sales in the six months accounts for 40% of volume market share globally, said the company.
Antiplatelet agent Brilinta (ticagrelor) also grew strong in the quarter, delivering roughly $0.5bn and growing 28% driven by the US and emerging markets including China.
For one of AZ's core respiratory market, the UK drug maker reported that Symbicort (budesonide/formoterol) China sales were up by 18% in the half driven by "extensive Symbicort campaign to highlight its strong differentiation versus competitors", explained Mallon.
AZ 20171H Sales($M)
|
Products
|
Emerging markets |
%Change
|
China
|
%Change
|
|
Pulmicort (budesonide) |
396 |
+13 |
322 |
+12 |
|
Symbicort(budesonide/formoterol) |
213 |
+2 |
89 |
+11 |
|
Zoladex (goserelin) |
168 |
+10 |
79 |
+32 |
|
Iressa (gefitinib) |
129 |
-4 |
75 |
+6 |
|
Brilinta |
121 |
+33 |
61 |
+42 |
Note: growth rates at actual currency
23% Discount
Market access has become a challenge in China due to the government's tightening price pressure.
China's national payer, the Ministry of Human Resources and Social Security (MHRSS), on July 19, released a updated national reimbursement drug list(NRDL) after an eight-year hiatus, adding 44 drugs. Out of them, five are from AstraZeneca, a fact that has made the company feel rather good.
"Importantly, for our long-term business, we have seen five of our medicines added newly to the Chinese national reimbursement drug listing, one of the best performances of any company in China, and including most importantly Brilinta." said AstraZeneca Executive VP Mark Mallon during the call.
The addition, however, comes with large price concessions. Brilinta, for one, has seen its average sale prices slashed by 22.8%, from CNY153 ($22.8) to CNY118 for a box of 14 tablets of 90mg dosage.
Four other products added to the list also received haircuts. Faslodex(fulvestrant) 5ml price was slashed from CNY5,419.6 to CNY2,400, or 55.7%, and the coverage is limited to the treatment of late stage breast cancer patients showing no response to aromatase inhibitors and to hormone receptor (ER / PR) positive patients.
In the first year-half, Faslodex China sales grew by 22% (33% at CER) to $11m.
Meanwhile, the prices for Seroquel (quetiapine) XR three dosage tablets have roughly seen a 23% reduction rate.
In comparison, the average reduction rate is 44% for the total 36 newly added drugs, and the deepest cut is 65% for Roche's Herceptin(trastuzumab) injection, reduced from CNY21,613 to 7,600 for the 0.44g dosage.
AZ Products Added to China's NRDL
|
Products
|
Dosage |
Reimbursed Price(CNY) |
Average Sale Price(CNY) |
Price Reduction |
|
|
Brilinta |
90mg |
118 |
153 |
22.8% |
|
|
Faslodex |
5ml, 0.25g |
2,400 |
5,419.6 |
55.7% |
|
|
Seroquel ER
|
50mg |
74.4 |
96.9 |
23.2% |
|
|
200mg |
215 |
281 |
23.5% |
||
|
300mg |
293 |
383 |
23.4% |
||
（MHRSS, Scrip）
From the editors of PharmAsia News