Roche's HER2-Targeted ADC Trastuzumab Emtansine Slashes Price by 14,448 RMB per Box in China Amid Intensifying Competition

Contributing Writer | Jumping Hydrogen Bonds

Roche Intensifies Competition, Price War for HER-2 Positive Breast Cancer Drugs Never Ends.

Recently, the Liaoning Provincial Drug and Medical Consumables Centralized Procurement Website released the "Notice on Implementing the Results of Voluntary Price Reductions for 20 Drugs Including Trastuzumab Emtansine for Injection."

Roche has taken the initiative to reduce the price of its HER-2 ADC drug, trastuzumab emtansine, with the annual treatment cost dropping from 647,000 yuan to 309,000 yuan, representing a price reduction of more than 50%.

Specifically, the current online price of 27,632.04 yuan for the injection trastuzumab emtansine has been adjusted to 13,184.05 yuan across Liaoning Province.

This is the first price reduction for Trastuzumab Emtansine since its launch in 2020. Although it failed to be included in the medical insurance through negotiations in 2021, the magnitude of this price reduction is close to the average price reduction achieved during medical insurance negotiations.

01 Competitors of Trastuzumab Emtansine

Currently, the drugs targeting HER-2 available on the market in China are divided into three categories: monoclonal antibodies, ADCs, and small-molecule targeted drugs. The main indications for large-molecule monoclonal antibodies are first-line and adjuvant treatments for breast cancer, and they do not compete with trastuzumab emtansine in terms of sales.

However, the indications for small-molecule targeted drugs and ADC drugs are basically the same, focusing on second-line adjuvant treatment for early breast cancer and second-line treatment for advanced breast cancer.

Since the indication for which Rongchang Bio's Disitamab Vedotin was approved is gastric cancer, the main competitors of Trastuzumab Emtansine are small-molecule TKIs with the same indication. Especially after Lapatinib was removed from the medical insurance list, Hengrui’s Pyrotinib became the main competitor.

Table 1 Overview of Targeted Therapy Drugs for HER-2 Positive Breast Cancer in China

Data Source: Yaoke Database

So why did Roche take the initiative to cut prices this time? The author speculates that the main reasons are as follows.

02 China's Sales Situation Under Global Pricing Strategy Is Worrisome

In order to maintain the global pricing system, Enmetrastuzumab has not been reduced in price since its launch in China, and the medical insurance negotiation has also failed. However, this has resulted in its pitifully low sales volume in China compared to another product of Roche, Trastuzumab.

Moreover, for the indication of second-line treatment of HER-2 positive breast cancer, the annual treatment cost of small molecule targeted drugs is lower. For example, the annual treatment cost of Hengrui's Pyrotinib is about 155,000 yuan, and after medical insurance reimbursement, it is only about 46,000 yuan.

Pyrotinib quickly entered the medical insurance system through negotiation after its market launch, leading to a significant increase in its sales volume.

In addition, Neratinib was included in the medical insurance through negotiation in 2021, with the annual treatment cost decreasing from 200,000 to 80,000 RMB, and after reimbursement, it is only 24,000 RMB. When Neratinib begins to increase sales in 2022, it will further impact the market share of Trastuzumab Emtansine.

Table 2 Statistics of the Minimum Treatment Costs for HER-2 Drugs in Breast Cancer in China

Data Source: Drug Instructions, PharmEasy Database

03 May Seize Market Share Before Biosimilars Hit the Market

Although currently only trastuzumab has one biosimilar on the market, and only trastuzumab and pertuzumab have biosimilars under development, the patent expiration for ado-trastuzumab emtansine is approaching, followed by the gradual expiration of patents for small-molecule TKIs.

The emergence of an increasing number of generic drugs and biosimilars in the future will have a significant impact on the overall market. Roche's proactive price reduction for Kadcyla this time may be aimed at strengthening the product's competitive edge before biosimilars disrupt the market.

At the same time, as centralized procurement becomes increasingly normalized and expands in scope, biosimilars are highly likely to face the risk of further overall price reductions caused by centralized procurement in the future.

Table 3 Statistics on Information of HER-2 Generic Drugs and Biosimilars in China

Data source: Yaoke database

04 Latecomers may put huge pressure on Roche

The final crucial factor in Roche's proactive price reduction this time is the aggressive newcomer, DS-8201a from Daiichi Sankyo. In the NCCN Breast Cancer Guidelines in the United States, DS-8201a has already replaced trastuzumab emtansine as the preferred second-line treatment for HER-2 positive breast cancer. Meanwhile, DS-8201a has also initiated multiple phase 3 clinical trials for breast cancer in China. Especially the earliest head-to-head phase 3 MRCT clinical trial with trastuzumab emtansine has been ongoing in China for more than two years and could potentially be submitted for marketing approval at any time.

Table 4 DS-8201a Phase 3 Clinical Trials for Breast Cancer Conducted in China

Data source: Yaoke database

At the same time, domestic competitors are also catching up rapidly. Currently, the leading companies in China are TTY Biopharm and Zhejiang Medicine, both of which have entered Phase 3 clinical trials, while products from four other companies are in Phase 2 clinical trials.

Table 5 Progress of HER-2 ADC Development in China

Data Source: Yaoke Database

05 Conclusion

As the process of domestic substitution accelerates, high-priced imported drugs will gradually abandon their lofty stance and enter the fierce competition, otherwise they will be phased out by the increasingly competitive market.

However, it is worth noting that the domestic substitution is only the first step in the development of China's pharmaceutical industry, and the fact that Chinese patients cannot afford medicines is only temporary. As more similar drugs emerge, suicidal price competition will be hard to avoid, and internal competition will gradually escalate.

In the face of the current situation, going global is the only option. However, the European and American markets are not lacking in Me-too drugs. Only by focusing on clinical value to develop First-in-class drugs, or like Zanubrutinib, which can conduct head-to-head trials to demonstrate true clinical benefits, can one successfully enter the global market.