Global Blockbuster Drug Struggles in China Amid Surge of Biosimilars; PD-1 Inhibitors Face Fierce Domestic Competition

NBD Reporter Hua Ang, NBD Editor Zhang Haini

Recently, the renowned biotechnology website GEN released a list of the top 15 global drug sales in 2018. AbbVie’s adalimumab (brand names: Humira, Xiumingle) retained its title as the “blockbuster drug king,” achieving annual sales of $19.936 billion. Meanwhile, two PD-1 inhibitors that have gained significant traction in the global market—Bristol-Myers Squibb’s (hereinafter referred to as BMS) Opdivo and Merck & Co.’s Keytruda—jointly broke into the top five, with annual sales exceeding $7 billion each.

Reporters from National Business Daily noted that, contrary to common patient perceptions, all of the top 15 global pharmaceutical products by sales volume are therapeutic agents for complex and challenging conditions such as rheumatoid arthritis, cancer, and psoriasis, rather than commonly used medications with higher daily consumer demand. Without exception, these listed drugs were developed by multinational pharmaceutical giants, resulting in exceedingly high annual medication costs for patients.

Currently, all of the top 15 drugs by global sales in 2018 have been launched in mainland China. However, the "blockbuster drug" adalimumab has faced a lukewarm reception in the mainland Chinese market for many years, while simultaneously confronting pressure from more than 20 Chinese pharmaceutical companies actively developing biosimilars. In contrast, two popular imported PD-1 inhibitors achieved the opposite outcome, with first-quarter sales exceeding RMB 100 million each shortly after their launch in the mainland; however, they will face stiff competition from domestically produced counterparts this year.

Who Will Secure the First Generic Approval for the “Blockbuster Drug” in China?

In the Top 15 Global Drug Sales List for the previous year released by GEN, AbbVie’s product adalimumab achieved annual sales of $19.936 billion, representing an 8.2% year-over-year increase from the previous year’s sales of $18.427 billion.

Reporters from National Business Daily noted that this marks the seventh consecutive year since 2012 that adalimumab has retained its title as the “king of drugs.”

Currently, the adalimumab approved in mainland China for the treatment of rheumatoid arthritis and ankylosing spondylitis is priced at 7,700 yuan per prefilled syringe (40 mg/0.8 mL) on a certain online pharmaceutical marketplace. Purchase requires submission of a prescription for record-keeping purposes, and the drug has not yet been included in the National Reimbursement Drug List. In 2017, sales of adalimumab in sample hospitals in mainland China amounted to only approximately RMB 18 million.

Is the Global “Blockbuster Drug” Failing to Adapt in Mainland China? Yet Domestic Pharmaceutical Companies Are Highly Enthusiastic About Adalimumab. Currently, 28 Chinese pharmaceutical companies are “clustering” their efforts in the research and development of adalimumab biosimilars. Among listed companies alone, Hisun Pharmaceutical (600267, SH), Fosun Pharma (600196, SH), Buchang Pharmaceuticals (603858, SH), and Hualan Biological Engineering (002007, SZ) are intensifying their R&D efforts for “domestically produced Humira.”

Why Do Chinese Pharmaceutical Companies Actively Develop Similar Drugs Despite Poor Sales of Originator Drugs? A senior pharmaceutical industry analyst told a reporter from National Business Daily, “For patented drugs still within their patent term, (multinational pharmaceutical companies) strategically abandon some price-sensitive markets to maintain their global pricing structure. Consequently, many blockbuster drugs that perform well globally are currently selling poorly in China.”

“In the early years, our drug import approval process was relatively slow. Humira has many indications abroad, but it has not yet been approved in China,” said the aforementioned analyst.

A reporter from National Business Daily noted that, according to information on the China National Intellectual Property Administration’s “China and Multinational Patent Examination Information Query” website, the invention patent for “Human Antibodies Binding to Human TNFα,” filed by AbbVie Biotechnology Ltd. on February 10, 1997, is currently listed as “expired and terminated.”

Adalimumab is a fully human anti-TNFα monoclonal antibody. Thus, it appears that the patent for this drug has already expired in mainland China.

Currently, among the adalimumab biosimilars being raced to be replicated by various pharmaceutical companies in China, four companies—Aotai Biologics, Hisun Pharmaceutical, Innovent Biologics, and Henlius (a subsidiary of Fosun Pharma)—have had their new drug marketing applications accepted by the Center for Drug Evaluation of the National Medical Products Administration. The first domestically produced adalimumab will emerge from among these four companies.

“The competitive landscape in China remains uncertain; the final output value of the product will depend on the number of competitors. If there are many competitors, prices will not rise,” the aforementioned pharmaceutical industry analyst told a reporter from National Business Daily.

　PD-1 Anti-Cancer Drugs Become Blockbusters Both Domestically and Internationally

Notably, unlike adalimumab, which is a global best-seller but has seen lukewarm reception in China, the two imported PD-1 inhibitors achieved sales exceeding RMB 100 million within less than three months after their launch in mainland China in the third quarter of last year.

In the rankings released by GEN, two star PD-1 inhibitors, BMS’s Opdivo and MSD’s Keytruda, engaged in fierce competition in the global market last year. Opdivo achieved annual sales of $7.57 billion, while Keytruda reached $7.171 billion, ranking fourth and fifth on the list, respectively.

BMS’s Opdivo and Merck Sharp & Dohme’s Keytruda were approved for launch in China in June and July of last year, respectively. According to Shanghai Pharmaceuticals’ (601607.SH) 2018 third-quarter report, the company has entered into cooperation agreements with both BMS and Merck Sharp & Dohme, securing exclusive nationwide distribution rights in China for these two highly competitive PD-1 inhibitors in the global market.

Shanghai Pharmaceuticals disclosed that, as of the end of the third quarter last year, its distribution revenue for Opdivo amounted to RMB 190 million, and for Keytruda, RMB 150 million, marking a strong start following their market launch.

However, in 2019, these two imported PD-1 inhibitors encountered formidable competitors: domestically produced PD-1 inhibitors from Junshi Biosciences and Innovent Biologics, with similar products from Hengrui Medicine and BeiGene potentially entering the fray at a later stage.

“This has laid the groundwork for a price war. With so many players involved, those without a pricing advantage will struggle to move their products,” the aforementioned pharmaceutical analyst told a reporter from National Business Daily. “From the patient’s perspective, a price war is undoubtedly beneficial. However, from an investor’s standpoint, it may not be such good news. Pricing strategies will affect market expectations for innovative drugs.”

Among the two domestically produced PD-1 inhibitors already on the market, Junshi Biosciences’ product has been approved for the indication of malignant melanoma, which is identical to the approved indication for Merck Sharp & Dohme’s PD-1 inhibitor, leading to particularly intense competition between the two. Innovent Biologics’ product has been approved for the treatment of relapsed or refractory classical Hodgkin lymphoma. Bristol-Myers Squibb’s PD-1 inhibitor has been approved for the treatment of non-small cell lung cancer.

Currently, the suggested retail price for BMS’s Opdivo in mainland China is RMB 9,260 for the 100 mg/10 mL specification and RMB 4,591 for the 40 mg/4 mL specification; the price of MSD’s Keytruda is RMB 17,918 (100 mg/4 mL).

Meanwhile, reporters from National Business Daily noted that the prices of the two domestically produced PD-1 inhibitors already on the market are only 30% to 40% of those of imported products. Specifically, Junshi Biosciences’ “Tuoyi” is priced at RMB 7,200 per 240 mg vial, while Innovent Biologics’ “Tyvyt” is finally priced at RMB 7,838 per 100 mg vial.