Qilu Pharmaceutical Enters the Atorvastatin Arena: Can Daizong Enterprises Revive Its Prospects?

Author: Liang Jian

Yesterday, the NMPA announced new developments: Qilu Pharmaceutical’s generic drug, Atorvastatin Calcium Tablets, has officially passed the consistency evaluation review. With this approval, the number of domestic pharmaceutical companies competing in the atorvastatin market has reached four. These include Beijing Jialin Pharmaceutical, Xing’an Pharmaceutical, Lepu Medical’s subsidiary New Donggang Pharmaceutical (now renamed Zhejiang Lepu Pharmaceutical Co., Ltd.), and Qilu Pharmaceutical, which received formal approval this time.

Lipitor, the original branded drug of atorvastatin, was jointly developed by Pfizer and Warner-Lambert. The product was launched in China in 1999 and has achieved cumulative global sales of approximately $150 billion, becoming the first blockbuster drug to surpass $100 billion in total sales. It can be said that after the expiration of Pfizer’s patent protection period, the market potential for this product will be highly sought after by major manufacturers.

Among the current manufacturers of generic atorvastatin, Beijing Jialin Pharmaceutical Co., Ltd. was the winning bidder in the first round of the "4+7" volume-based procurement program last year, with a bid price of RMB 6.6 per tablet, representing an 80% price reduction. Therefore, given that Jialin Pharmaceutical has captured the majority of the market share, other three companies, led by Qilu Pharmaceutical, must focus their efforts on markets outside the cities implementing volume-based procurement to secure a share. This trend also signals further intensification of market competition.

Atorvastatin: A Fierce Market Battle

In fact, in the initial years after Pfizer’s Lipitor was launched in China, Beijing Jialin Pharmaceutical’s Ale, as the first domestic generic version, was also approved for market entry in 1999 and has consistently maintained a market share of approximately 10%, holding a leading position.

Currently, Beijing Jialin Pharmaceutical Co., Ltd.’s atorvastatin calcium tablets, branded as Ale (10 mg/20 mg), have passed the consistency evaluation and secured 70% of the sales rights in 11 cities through last year’s volume-based procurement. Moreover, the first prescription for Ale was issued on March 25 this year at a private hospital in Xi’an, one of the “4+7” pilot cities. The prescribed price was RMB 6.6 per box (7 tablets/20 mg per box), consistent with Ale’s winning bid price.

It can be said that with Qilu Pharmaceutical’s recent approval, its market space has been largely exhausted under the impact of the “4+7” volume-based procurement program. More importantly, in non-“4+7” pilot cities, the fierce competition in the atorvastatin market shows no signs of abating. According to Lepu Medical’s 2018 annual report, Lepu plans to intensify the promotion of its generic atorvastatin (brand name: Youliping) in non-“4+7” pilot regions this year, thereby offsetting the adverse effects in the “4+7” areas.

Lepu Medical’s annual report shows that Youliping generated RMB 885 million in revenue last year, a year-on-year increase of 143.3%. Of this, revenue from the “4+7” regions amounted to RMB 63.96 million, while revenue from non-“4+7” regions reached RMB 440 million. In addition, Youliping has already been included in the centralized drug procurement list, and the company is highly confident about its inclusion in the newly updated National Reimbursement Drug List formulated this year.

In addition to Lepu Medical, Xing’an Pharmaceutical should not be underestimated. On February 1 this year, Xing’an Pharmaceutical passed the consistency evaluation. Notably, almost simultaneously with the announcement of passing the evaluation, the company also announced its acquisition by Dongrui Pharmaceutical, a company listed on the Hong Kong Stock Exchange. In its acquisition announcement, Dongrui Pharmaceutical explicitly stated that, upon completion of the acquisition, it would integrate Xing’an Pharmaceutical’s flagship product, Atorvastatin Calcium Tablets, into its product portfolio to diversify its offerings and enhance the company’s overall competitiveness.

Therefore, if Qilu Pharmaceutical intends to expand its market beyond the “4+7” pilot program, it will inevitably face intense competition from Lepu Medical and Xing’an Pharmaceutical. After all, with limited market share and numerous competitors, each company is sharpening its strategies in anticipation of the next volume-based procurement round.

The Green of Qilu Endures

In fact, since the beginning of this year, Qilu Pharmaceutical has continuously made new progress in the approval of new drugs and the consistency evaluation of generic drugs. For example, on April 24, Qilu Pharmaceutical’s adefovir dipivoxil tablets became the first to pass the consistency evaluation. Adefovir dipivoxil tablets are one of the commonly used anti-hepatitis B virus drugs, indicated for adult patients with chronic hepatitis B who have compensated liver function, active replication of hepatitis B virus, and persistently elevated serum aminotransferases. The original research manufacturer is GSK. Under competition from domestic generic drug manufacturers, sales of the originator drug have declined year by year.

According to data from Menet, the sales revenue of adefovir dipivoxil reached RMB 1.499 billion in 2017, with Chia Tai Tianqing holding a 29.17% market share, GSK accounting for 19.77%, and Qilu Pharmaceutical capturing 7.99%. As a non-"4+7" volume-based procurement variety, Qilu Pharmaceutical became the first company to pass the consistency evaluation for this drug. Consequently, it will receive priority in drug procurement processes across China, and its market share is expected to expand further.

In addition to Adefovir Dipivoxil Tablets, the NMPA website also shows that Qilu Pharmaceutical’s Lenalidomide Capsules (25 mg) were approved for production on April 25. The product was submitted for marketing approval as a Class 4 generic drug; upon approval for production, it is deemed to have passed the consistency evaluation, making it the first drug of this specification in China to pass such evaluation.

Lenalidomide is an immunomodulatory antineoplastic agent. The original drug, marketed under the brand name Revlimid, was developed by Celgene and exhibits multiple effects, including antitumor, immunomodulatory, and anti-angiogenic activities. In recent years, the global sales of this drug have maintained a double-digit growth rate.

From 2015 to 2017, lenalidomide rose from the tenth to the second position in the global pharmaceutical sales rankings, and from the fourth to the first position in the global anti-cancer drug sales rankings. Moreover, according to the official website of Qilu Pharmaceutical, it is predicted that the sales of lenalidomide will reach $13.4 billion by 2022, making it the best-selling chemical drug.

According to data from the National Medical Products Administration (NMPA), lenalidomide capsules produced by three companies—Beijing SL Pharmaceutical, Chia Tai Tianqing Pharmaceutical, and Qilu Pharmaceutical—have been approved for production in the domestic market, with a total of five approval documents. This indicates that Qilu Pharmaceutical has taken the lead over pharmaceutical companies such as Chia Tai Tianqing and Beijing SL Pharmaceutical in terms of R&D speed and market capture speed for lenalidomide, thereby gaining a first-mover advantage in the market.

In addition, Qilu Pharmaceutical has recently been applying across China to lower the prices of its products, including gefitinib and pemetrexed. These frequent moves by Qilu Pharmaceutical signal that a period of significant product success is imminent.

On one hand, new products have gained market approval or generic drugs have passed consistency evaluations; on the other, negative news continues to plague the company. Last month, a fire at Tianhe Huishi, a subsidiary of Qilu Pharmaceutical, sparked external doubts about its environmental protection development model. In fact, media outlets had previously reported that Tianhe Huishi had been repeatedly cited and warned by environmental authorities. The recent fire can be seen as the result of Qilu Pharmaceutical’s long-standing failure to effectively address these issues.

Following the fire, investors inquired about the impact on performance to the Board Secretary of Qilu Pharmaceutical. However, the Board Secretary responded that the company was unable to identify the specific product lines potentially affected by the incident. This response seems to foreshadow uncertainty in Qilu Pharmaceutical’s future development. After all, the incident occurred at a critical stage of new product research and development, leaving the path ahead shrouded in ambiguity.