11-Provincial Alliance Drug Procurement Results Revealed: Rituximab, Growth Hormone, and Blood Products Face Sharp Price Cuts

On March 10, the Guangdong Provincial Drug Exchange Center issued two notifications in a row to warm up in advance for the bidding of the procurement of 87 common and chronic disease medicines in the Guangdong consortium, which will be held online tomorrow.

 

On the same day, the online bidding for the first batch of the Guangdong Alliance's centralized volume procurement of 276 drugs, including Diclofenac, took place as scheduled. According to the published list of qualified products, this batch covers 146 drugs and involves a total of 579 companies.Enterprise, 1,608 product specifications, including rituximab, injectable human growth hormone, and injectable recombinant human coagulation factor—three biologics, hormone drugs, and blood products that have drawn significant industry attention—are all on the list. Eight pharmaceutical companies, such as Ruiyang, Northeast, CSPC, Qilu, Luoxin, and Guangzhou Baiyunshan Tianxin, are involved with more than seven varieties each. Based on the information disclosed during the live broadcast of the public conference, the price reduction for some products exceeded expectations.

 

 

Human Coagulation Factor VIII, used for the treatment of hemophilia patients, faces a supply shortage in the Chinese market, and the issue has been highly emphasized at the national level. In this round of the Guangdong Alliance centralized procurement, Swiss companies Baxalta and Novo Nordisk both secured tentative winning qualifications with price reductions exceeding 30%.

 

 

Currently, the recombinant Factor VIII products that have been approved for marketing in China include Bayer's Kogenate and Kovaltry, Baxter's Advate, Pfizer's ReFacto, and Novo Nordisk's Novoeight, all of which are imported products. In July 2021, Sinocelltech announced that its injectable recombinant human Factor VIII (Anjiajin) had been approved. The domestic recombinant Factor VIII developed by Sinocelltech achieved a "zero" breakthrough, altering the competitive landscape. In the recent procurement alliance involving 11 provinces (autonomous regions, corps) including Guangdong, there were 14 specifications of injectable recombinant human Factor VIII, with six companies, including Bayer and Shenzhen Cell Engineering Company, engaging in fierce competition.

 

 

On a deeper level, due to the strict regulation of the blood products industry in China, the industry has a high degree of concentration. Currently, the main manufacturers of Factor VIII that are listed in China include 11 products produced by Shanghai RAAS, Hualan Bio, Green Cross, Shandong Taibang, Shanghai Xinxing Medicine, and others, all of which are first-generation plasma-derived Factor VIII. Imported products include Baxter's Advate, Bayer's Kogenate, Pfizer's ReFacto, and four others, mainly recombinant human Factor VIII (second generation). In December 2020, Novo Nordisk's third-generation recombinant human Factor VIII for injection was approved in China. Products under research by Zhengda Tianqing and Rongsheng Pharmaceutical are currently in phase III clinical trials. From the perspective of current market demand, the future hemophilia market in China will gradually shift towards recombinant human Factor VIII as the primary treatment, and the level of competition is expected to intensify.

 

On the other hand, the off-hospital market also deserves attention. In January 2021, Qilu Pharmaceutical's listing application for Eltrombopag Ethanolamine Tablets, filed as a Category 4 generic drug, was accepted by the CDE. Data from Menet shows that in 2019, retail sales in Chinese urban areas...PharmacySales of Eltrombopag Ethanolamine Tablets reached 170 million yuan at the terminal, increasing by 289.63% year-on-year. In 2022, the sales may replace Recombinant Human Coagulation Factor VIII for Injection to become the best-selling hemostatic drug in physical pharmacies.

 

This foretells that the competitive landscape of human coagulation factor VIII both inside and outside hospitals in China will change.

 

 

Taking Rituximab as an example, the 11-province alliance in Guangdong included five dosage forms, covering Roche, Fosun Henlius, and Innovent. The first two manufacturers have both large and small capacities, while Innovent’s 10ml: 0.1g is the same dosage form as Roche's. According to the latest results obtained from the public information session, Innovent may ultimately secure the proposed winning qualification at a price of over 880 yuan, representing a reduction of nearly 60% compared to the highest valid bid price. Meanwhile, Roche and Fosun Henlius also achieved the proposed alternative qualification with significant price reductions.

 

 

Such a situation poses a significant challenge for Roche: In 2021, Roche's pharmaceutical business revenue in China reached $3.6 billion (3.276 billion Swiss francs), accounting for 7.3% of Roche's global pharmaceutical business revenue. However, its "three major products"—bevacizumab, trastuzumab, and rituximab—continued to face strong competition from biosimilars, with revenue declines of 38%, 37%, and 28% respectively in 2021. In China, the revenue from rituximab dropped by 13% in 2021. Moving forward, a large portion of China’s rituximab procurement market will witness fierce competition among these three companies. Who will gain the upper hand? This remains to be seen.

 

　

Source: PDB Database

 

However, it is worth considering that the total sales of five biosimilars under Amgen in the first nine months of 2021 were approximately 20 billion US dollars. How far is China's biosimilar market from such a scale? In 2015, Amgen announced the submission of a Biologics License Application to the US FDA for the biosimilar ABP501. This drug is a biosimilar to AbbVie’s blockbuster drug Humira. This move was interpreted by the industry as the "Amgen-AbbVie patent war," significantly impacting AbbVie’s market.

 

A similar strategy was adopted for Basaglar, a biosimilar insulin glargine developed jointly by Eli Lilly and Boehringer Ingelheim. Basaglar is a generic version of Lantus, the leading product in the insulin market. It received FDA approval at the end of 2015 but was delayed due to patent disputes and officially launched in the United States in mid-December 2016. By 2019, its global sales had reached $1.113 billion. Basaglar became the first biosimilar to reach the blockbuster level of $1 billion in sales.

 

The difference is that the focus of the market environment varies. In order to ensure the accessibility of innovative products and enhance the sense of medication availability for the Chinese population, bulk procurement or alliance procurement naturally compresses the overall market size of individual products by exchanging volume for lower prices. Can this create the aforementioned blockbuster products? The market will provide the answer. As far as rituximab is concerned, in 2019, the rituximab injection Hanlikang developed by Henlius was approved for marketing, becoming the first biosimilar produced in China. Currently, approximately 180 pharmaceutical companies in China have laid out plans for the research and development of biosimilars, involving around 400 drugs. Most of the biosimilars under development in China are concentrated on popular targets such as CD20, VEGF, and HER2, and the competition will be self-evident.

 

In order to standardize the competitive landscape of the biosimilar market, in 2021, the CDE released a total of 29 guidance principles closely related to biologics (including 18 drafts for public comment). General principles such as the "Technical Guidance Principles for Biosimilar Similarity Evaluation and Extrapolation of Indications" further standardized the development and evaluation of biosimilars, strengthened the whole lifecycle management of biologics, and optimized procedural requirements in the review and approval process. Eight of these are directly related to biosimilars. It is not difficult to predict that such competitive trends will intensify.

 

 

In terms of the competition among varieties, some groups will see fierce competition for the qualification to be selected. According to statistics, the number of enterprises involved in Group B of the Cytidine Diphosphate Choline (Citicoline) Injection procurement list reaches 43. Data shows that as a brain metabolism activator, Cytidine Diphosphate Choline was widely used in China in 2018.HospitalThe drug expenditure amounted to 836 million yuan, with a growth rate reaching 20.5%. Faced with the substantial market demand from the Guangdong consortium, pharmaceutical companies such as Chenxin Pharmaceutical, Guangdong Bangmin, and Suicheng Pharmaceutical engaged in fierce competition. As a result, Chongqing Lemei and Shandong Yikang Pharmaceutical secured tentative eligibility for selection.

 

 

It is worth noting that at the beginning of 2021, the "Six Provinces and Two Regions" inter-provincial alliance led by the Sichuan Provincial Medical Insurance Bureau and the Chengdu Municipal Medical Insurance BureauMedicineIn the centralized bulk procurement, Cytidine Disodium Injection was also on the procurement list. At that time, the average price reduction for the 11 selected drugs, including Cytidine Disodium Injection, was 58.05%, with the maximum reduction reaching 91.69%. The prices of several selected injections dropped to rock bottom. Although the winning prices were not disclosed at that time, judging from the overall decline, the price reduction of Cytidine Disodium Injection was significant. It remains to be seen whether the price cuts by the Guangdong Alliance will align with this.

 

The competition for the cefoperazone sulbactam injection classified under procurement list 1B is second only to that of citicoline (cytidine diphosphate choline) mentioned earlier, involving 33 companies. It is reported that Hainan Weikang, Sinopharm Zhi Jun, Suzhou Dongrui and other pharmaceutical companies have all been granted tentative qualification for selection.

 

 

Data from MiNe Network shows that although cephalosporin products have seen an overall decline in sales due to policy impacts in recent years, injectable products remain unrivaled in their market leadership. This is because they allow cephalosporins to take effect more quickly and offer better efficacy through routes such as intravenous infusion or intramuscular injection. In 2020, their market share increased to 88.28%.

 

Table: Top 10 Cephalosporin Injection Varieties in 2020

Source: Key Provincial Public Hospital Terminal Competitive Landscape from Menet

 

Note: * represents products proposed to participate in the fifth round of national procurement.

 

According to the competitive landscape of key provinces and cities' public hospital terminals from MiNe Network, in the top 10 Cephalosporin injection varieties in 2020, Cefoperazone Sulbactam rose to the top with a market share of 18.41%. In fact, after reaching a sales scale of 1 billion yuan in 2016, the sales of Cefoperazone Sulbactam have been steadily increasing. Even in 2020, when the pandemic affected patients' frequency of visiting hospitals, and the sales scale of the entire small category of Cephalosporin injections declined by more than 20%, the sales decline of Cefoperazone Sulbactam was only about 9%, making it the injection variety with the smallest decline in the top 10, with sales at the level of 1.5 billion yuan in 2020. Currently, the original research pharmaceutical company Pfizer holds a market share as high as 90%. Although there are many domestic generic drug approvals, only Suzhou Dongrui Pharmaceutical has passed the evaluation. Whether this selected product can seize the market share of the original drug remains to be seen in subsequent results.

 

In addition, the three varieties of Piracetam, Cefazolin, and Diclofenac in Group 1B procurement list involve more than 20 companies each, with similarly intense competition. The industry generally believes that the reason why the Guangdong Alliance has drawn so much attention is not only due to its broad market coverage but also because the total number of collected procurement varieties is nearly 500, making its large scale an important factor that cannot be ignored. The selection results of the first batch of varieties will obviously determine the industry's expectations for the subsequent procurement of the Guangdong Alliance.PharmaceuticalsThe Economic Report will continue to keep an eye on the situation.