Another Round of Monoclonal Antibody Price Cuts: The Key to Winning in a Trillion-Yuan Market

Yiyao.com, April 23: "The procurement price dropped directly by 56.9%, from 1,925 yuan to 830 yuan."

 

On April 22, the Shaanxi Provincial Public Resource Trading Center announced that Roche had voluntarily initiated an action regarding tocilizumab injection (specification: 80 mg/4 mL).ProcurementThe price has been adjusted as mentioned above. This is a microcosm of the drug's across-the-board price reductions in all provinces. A few days ago, Jiangsu Province issued aPharmaceuticalsNotice on Supply Price Adjustments, Including Tocilizumab

 

 

According to statistics, global sales of tocilizumab reached $1.88 billion in 2017. In China’s urban sampleHospitalIn 2018, sales of tocilizumab declined, dropping by 11% year-on-year. According to data from Menet, tocilizumab has been included in the medical insurance catalogs of only three regions: Anhui, Ningxia, and Tibet. Industry analysts believe that as adjustments to the National Reimbursement Drug List are underway, priority will be given to medications for major diseases such as cancer. Tocilizumab’s price reduction strategy is likely aimed not only at countering declining sales in China but also at preparing for its inclusion in the national medical insurance catalog.

 

Furthermore, the first domestically produced biosimilar is poised to hit the market. What will be the pricing for this Chinese-made rituximab? An answer is expected soon. Reporters have noted that the majority of monoclonal antibody drugs currently available in China’s clinical practice have either undergone significant price reductions or are preparing for such cuts, as companies vie for the substantial future potential of China’s monoclonal antibody market.

 

 

Antibody drugs are currently the therapeutic class generating the highest number of global blockbuster products. A look at the top 10 global pharmaceutical sales in 2018 reveals this trend: six monoclonal antibody products—adalimumab, pembrolizumab, trastuzumab, bevacizumab, rituximab, and nivolumab—made the list. Humira’s global sales reached as high as $19.9 billion, setting a new record in pharmaceutical sales history.

 

Judging from these blockbuster products, the domestic monoclonal antibody market holds significant promise. However, the development of monoclonal antibody drugs in the Chinese market started relatively late. Despite their superior clinical efficacy leading to a rapid increase in sales domestically, their sales revenue and market share on hospital drug usage lists remain far below international levels. Taking Humira as an example, its sales in sample hospitals amounted to only RMB 16.17 million in 2018, while infliximab recorded sales of merely RMB 153 million. Even after reasonably extrapolating the sample hospital data to represent the broader market, the sales scale for these two drugs remains orders of magnitude lower than their respective global sales figures of USD 19.936 billion and USD 5.326 billion in 2018.

 

How to achieve scale is an urgent question for all domestic and international monoclonal antibody products. In 2019, China’s monoclonal antibody sector entered a harvest period: the approval and market launch of two domestically produced PD-1 monoclonal antibodies and the first domestically produced monoclonal antibody biosimilar at the beginning of the year marked the onset of a wave of launches for Chinese-made antibody drugs. Furthermore, numerous companies, both large and small, have rushed to enter and strategically position themselves in the monoclonal antibody field, leading to intense clustering around popular targets such as PD-1 and HER2.

 

In response, China Everbright Securities stated in its latest research report that “there are three main reasons for the poor sales performance of monoclonal antibodies (mAbs) in China: First, high costs. For instance, the average annual treatment cost for adalimumab in China is approximately RMB 200,000, while infliximab costs around RMB 100,000. Both require long-term use, exceeding the affordability of most households across the country. Second, inadequate insurance coverage. Reimbursement coverage for mAbs under the national medical insurance scheme is relatively limited, with only seven mAb products included in Category B of the National Reimbursement Drug List (NRDL). Among these, bevacizumab and others were included in Category B through price negotiations. Additionally, four other mAb products are covered by provincial or regional medical insurance plans. The latest round of NRDL adjustments may provide greater growth potential for these mAb products that have proactively adjusted their prices. Third, insufficient education for both physicians and patients. For example, middle-aged and elderly patients in China with autoimmune diseases such as rheumatoid arthritis are more inclined to use physical therapy and traditional Chinese medicine.”Pharmaceuticalstherapies, while the proportion of domestic hospitals with rheumatology departments is low, and awareness of monoclonal antibody therapies in modern medicine is relatively weak.”

 

Overall, as domestically produced monoclonal antibodies continue to enter the market, their prices are expected to decline, and they will be gradually included in the national medical insurance coverage through negotiations. Furthermore, with the growing alignment of prescribing and medication practices among healthcare providers and patients with international standards, the potential for significant volume growth in the monoclonal antibody market is promising.

 

 

As domestically produced monoclonal antibody biosimilars and innovative drugs targeting the same indications gradually enter the market, the prices of blockbuster antibody therapies will be progressively driven down, thereby creating conditions for their inclusion in the National Reimbursement Drug List (NRDL) through price negotiations and subsequently stimulating volume growth in the monoclonal antibody market. Taking PD-1 inhibitors as an example, domestically produced PD-1 inhibitors are priced at approximately one-third of that of imported products. Their future inclusion in the NRDL, accompanied by further price reductions, will enhance medication accessibility and promote their widespread clinical application.

 

In fact, the trend of domestic products replacing imports is beginning to emerge. A research report from Everbright Securities points out that currently, anti-TNF-α antibody drugs in China include two imported monoclonal antibodies—adalimumab and infliximab—and one imported antibody fusion protein, etanercept, as well as three domestically produced antibody fusion proteins. In terms of sales revenue, imported antibody drugs have shown a declining trend in recent years, while domestically produced antibody drugs are gradually achieving import substitution.

 

So, how can one feast in the future market? The aforementioned report believes that, inEnterpriseAt this level, the primary factor determining sales revenue is academic promotion capability. Since PD-1 inhibitors were relatively unfamiliar to clinicians and patients, while featuring complex indications and side effects, pharmaceutical companies required robust academic promotion capabilities to enhance market penetration. The strength of Bristol Myers Squibb (BMS) and Merck & Co. lies not only in their PD-1 inhibitors but, more critically, in their comprehensive academic promotion capabilities, which are key to scaling up innovation. For instance, besides Keytruda, which generated $7.1 billion in sales, Merck also had sitagliptin with $3.7 billion in sales; similarly, apart from Opdivo with $6.7 billion in sales, BMS had apixaban with $6.4 billion and abatacept with $2.7 billion. It is evident that strong academic promotion capabilities can rapidly introduce new products to the market, achieving swift volume ramp-up for high-quality monoclonal antibodies.

 

From the product perspective, the trajectory of Keytruda’s rapid rise and its subsequent sales overtaking Opdivo highlights the advantages of expanding indications. In 2018, Keytruda surpassed Opdivo, primarily driven by its approval for first-line treatment of squamous and non-squamous non-small cell lung cancer (NSCLC), which significantly expanded the patient base and elevated its therapeutic standing. Furthermore, scalable manufacturing and cost-control capabilities serve as effective moats to ensure supply and deter competition, constituting a core advantage in navigating price wars.

 

 

Currently, the therapeutic applications of monoclonal antibodies are primarily focused on oncology and autoimmune diseases. These agents precisely target antigenic epitopes with high selectivity and minimal side effects, thereby demonstrating significantly superior efficacy compared to conventional drugs. However, their large molecular weight and complex structure make monoclonal antibodies difficult to replicate, pose significant challenges for mass production, require substantial investment, and thus present extremely high barriers to market entry.

 

In terms of targets, popular oncology targets include HER2, CD20, PD-1/L1, EGFR, and VEGF (R2), while key targets for autoimmune diseases include TNF-α and interleukins (ILs). From an indication perspective, the market potential for monoclonal antibodies in both oncology and autoimmune diseases remains largely untapped. With the sequential launch of domestically produced monoclonal antibodies and the expanding coverage of national medical insurance, the domestic market, valued at hundreds of billions of yuan, is expected to gradually open up.

 

Currently, the first-tier players in China’s monoclonal antibody sector—including Hengrui Medicine, Henlius, Hisun Pharmaceutical, Innovent Biologics, Junshi Biosciences, and BeiGene—are accelerating their efforts at full speed. For instance, Henlius set a new record for the fastest inclusion of a monoclonal antibody into China’s National Reimbursement Drug List (NRDL): its rituximab biosimilar was approved for market launch in February and included in the Guangxi provincial medical insurance reimbursement scheme by March.

 

Everbright Securities’ research report posits that “future competitive dynamics will no longer be won by relying on a single product. Companies with robust product pipelines, broad expansion of indications, and strong academic promotion capabilities will unlock growth potential. Of course, risk control must also be prioritized in this process: First, there is the risk of increased competition and declining prices. Currently, many domestic companies are investing in R&D for various popular targets. As competitors targeting the same mechanisms successively launch their products, pressure to reduce prices will intensify, thereby compressing corporate profit margins. Second, there is the risk that R&D progress may fall short of expectations. The development of monoclonal antibodies (mAbs) is highly challenging; due to their large molecular weight and complex structure, the development of mAb biosimilars is far more difficult than that of conventional generic chemical drugs, approaching the complexity of original innovator drugs. Consequently, companies new to mAb development may experience R&D timelines that lag behind expectations. Another consideration is the risk of failing to recoup costs. The production of mAb-based therapies entails high manufacturing costs and substantial upfront investment. If price wars erupt post-launch or if market approval is denied, companies will face significant pressure in recovering their costs.”