Dorzagliatin’s Inclusion in China’s National Reimbursement Drug List Fuels Hua Medicine’s Commercial Momentum

Last Wednesday, the results of the 2023 National Reimbursement Drug List (NRDL) negotiations were officially announced. Alongside the announcement, CCTV News released a short video capturing the intense “soul-bargaining” moment during the NRDL negotiations, featuring a domestically developed original hypoglycemic agent. In the tense negotiation room, the pharmaceutical company demonstrated sincere commitment, while the NRDL negotiators showed considerable patience. After multiple rounds of bargaining, the price per tablet of the hypoglycemic drug was reduced from an initial RMB 5.54 to RMB 5.39, successfully securing its inclusion in the national reimbursement list. During the negotiations, the company representative once quoted RMB 5.52, symbolizing “I love I love,” which is also the drug’s development code name, becoming a viral topic online on the day the NRDL was unveiled.

This glucose-lowering drug is Hua Medicine’s Huatangning.^®(Dorzagliatin, HMS552).

Dorzagliatin is Hua Medicine’s core product in the diabetes sector and the company’s first commercialized product to be successfully included in the National Reimbursement Drug List.This product is indicated as monotherapy, or in combination with metformin hydrochloride when glycemic control is inadequate with metformin hydrochloride alone, to improve glycemic control in adults with type 2 diabetes mellitus, alongside diet and exercise. Reportedly, this drug is not only the first glucokinase activator (GKA) approved for marketing worldwide, but also the first first-in-class innovative drug with a novel mechanism of action in the field of diabetes in the past decade, and the first global first-in-class innovative drug for type 2 diabetes launched in China.

In the highly competitive domestic diabetes market, dorzagliatin has stood out due to its novel mechanism of action, favorable efficacy, and high safety profile. Since its approval and launch in China in September 2022, it has garnered a strong reputation among patients and achieved robust sales performance.

One year later, dorzagliatin has been successfully included in the National Reimbursement Drug List, meaning that a broader population of patients with diabetes in China will soon have access to a new treatment option with a reduced financial burden. This marks another significant milestone in Hua Medicine’s commercialization journey and signals an impending shift in the landscape of diabetes medication in China.

According to a report by market research firm Grand View Research, the global diabetes drug market size reached $19.75 billion in 2020. It is projected to grow to $27.25 billion by 2028, with a compound annual growth rate (CAGR) of 4.3%.

The global diabetes market continues to expand, and as the country with the largest diabetic population worldwide, China’s market size is also rising year by year.

According to statistics from the International Diabetes Federation (IDF), as of 2021, there were 537 million adults with diabetes worldwide, including 140 million in China, accounting for more than one-quarter of the global total. Meanwhile, the potential size of China’s diabetes market is projected to exceed RMB 100 billion by 2025. This substantial market demand has attracted a large number of pharmaceutical companies vying for a share of China’s diabetes drug market.

Although the market for glucose-lowering drugs in China is enormous, numerous issues have already emerged.

Currently,Domestic hypoglycemic drugs are still predominantly generics.Numerous domestic pharmaceutical companies have already established mature portfolios in conventional glucose-lowering drugs and are now expanding into other therapeutic areas. For instance, in the SGLT-2 inhibitor segment, Lukang Pharma and Fuyuan Pharma have secured approvals for the first generic versions of dapagliflozin in China, while Jiangsu Hansoh and Sichuan Kelun have both obtained marketing approval for generic empagliflozin. Competition in the DPP-4 inhibitor market is equally intense; with patents on several originator drugs set to expire in the coming years, a large volume of domestically produced generics is expected to enter the market.

Chinese pharmaceutical companies aim to enter the domestic diabetes market with generic drugs, but the reality is far from ideal.Original drugs from foreign-invested enterprises remain the mainstay of China's diabetes market.

According to the research report “The Red Ocean Market of Diabetes Therapeutics” by PharmCube, multinational corporations (MNCs) hold an absolute dominant position in China’s hospital-based diabetes drug market, accounting for over 80% of sales. Domestic companies comprise less than 20% of the market share, with their portfolios consisting primarily of generic drugs. Most new classes of medications, including DPP-4 inhibitors, SGLT-2 inhibitors, GLP-1 receptor agonists, and thiazolidinediones (TZDs), are produced by multinational pharmaceutical companies, resulting in a significant reliance on imports in the domestic market. According to Menet’s statistics on oral hypoglycemic agents in China for the first half of 2023, original branded hypoglycemic drugs from MNCs such as AstraZeneca, Bayer, Merck, and MSD ranked among the top in sales volume across both physical retail pharmacies and online pharmacies.

Despite the wide variety of currently available glucose-lowering medications, the clinical needs of patients with diabetes remain unmet. In terms of efficacy, some agents demonstrate suboptimal performance, characterized by unsustainable therapeutic effects, significant fluctuations in blood glucose control, low rates of target attainment, and inadequate management of complications and comorbidities. Furthermore, due to their distinct mechanisms of action, different drugs are associated with specific adverse reactions.

Therefore, the development of drugs with superior efficacy and safety profiles that can lower blood glucose levels more steadily is essential to further meet current clinical needs. The domestic diabetes market, currently dominated by generic drugs and imported medications, urgently requires breakthroughs from domestically developed innovative drugs.

In this context, Hua Medicine’s dorzagliatin has emerged as a pioneer.

2022Year9month, dorzagliatin was officially approved for marketing, becoming the world's firstGKATherapeutic agents for type 2 diabetes.

Dorzagliatin is a first-in-class, novel-mechanism, allosteric glucokinase activator (GKA) independently developed by Hua Medicine, based on its original scientific concept of “repairing glucose sensing, restoring homeostasis, and treating diabetes at its source.”This drug targets glucokinase (GK), the body’s glucose sensor, and acts on organs involved in glucose storage and output, including the pancreas, intestine, and liver. It improves impaired GK function in patients with type 2 diabetes, thereby enhancing β-cell function and reducing insulin resistance. Thus, it has a mechanism of action that restores the physiological regulation of glucose homeostasis, holding promise for controlling the progression of type 2 diabetes and the occurrence of its complications at the source.

Compared with traditional glucose-lowering drugs, dorzagliatin offers three major advantages based on a novel regulatory mechanism.First,Superior Glucose-Lowering Efficacy, its two Phase III clinical studies (SEED and DAWN) conducted prior to market approval have fully demonstrated the excellent glucose-lowering efficacy of dorzagliatin and its beneficial effects on improving beta-cell function. Furthermore, it was verified before launch that some patients could discontinue treatment for one year after achieving therapeutic effectiveness with 52 weeks of medication; secondly,Higher Safety, Phase III clinical trial results showed that while dorzagliatin effectively lowered hyperglycemia, the incidence of hypoglycemia (blood glucose <3 mmol/L) was less than 1%, with no severe hypoglycemic events reported; furthermore, due to its amino acid-like chemical structure, dorzagliatin does not undergo renal metabolism,Provides a novel treatment option for the majority of patients with type 2 diabetes and renal insufficiency.

Following its market launch in 2022, dorzagliatin, as a domestically developed innovative drug, has provided Chinese patients with diabetes a novel therapeutic option. Its inclusion in the National Reimbursement Drug List will enable a broader patient population to access this innovative medication at more affordable prices, which is of significant importance in alleviating the financial burden on patients.

In fact, since its launch last year, dorzagliatin has achieved strong commercial performance.

Menet conducted an analysis of the sales of domestically marketed oral antidiabetic drugs in the first half of 2023. Among the top 20 brands sold in online pharmacies, AstraZeneca’s dapagliflozin tablets, Merck’s metformin hydrochloride tablets, and Hua Medicine’s dorzagliatin tablets ranked in the top three. Dorzagliatin broke into the top three within less than a year of its launch. Amid numerous imported drugs, the presence of this domestic Class 1 innovative drug is particularly noteworthy, having secured a foothold in the fiercely competitive diabetes treatment landscape.

This means that,Following its inclusion in the National Reimbursement Drug List, Dorzagliatin’s strong efficacy, competitive pricing, and sustained volume growth will create a powerful synergistic effect., Hua Medicine’s position in the diabetes market will be further consolidated.It even possesses the power to reshape the current landscape of glucose-lowering drug usage, with the potential to break through the dominance of imported medications.

Furthermore, the development of Hua Medicine has been bolstered by national policies. This year, the National Healthcare Security Administration (NHSA) has provided significant policy support for the inclusion of innovative drugs in the National Reimbursement Drug List (NRDL), establishing a comprehensive support mechanism covering all stages—from coverage determination, application, review, and cost-effectiveness analysis to negotiation. Notably, the NHSA shifted the directory access method from an expert selection system to a company application system, with the scope of applications primarily focused on drugs newly launched within the past five years. The proportion of such newly launched drugs among the new additions to the NRDL rose from 32% in 2019 to 97.6% in 2023.In the “soul-bargaining” segment, which has drawn the most market attention, the National Healthcare Security Administration’s price reductions this year were more moderate compared with previous years. In particular, the price cuts for innovative drugs were 4.4 percentage points lower than the overall average, signaling the healthcare security system’s “preference” for innovative medicines.This signal reflects national policies that encourage domestic innovative pharmaceutical companies and originator drugs, balancing reasonable corporate returns while safeguarding basic societal needs. This represents a favorable shift for China’s biopharmaceutical industry. Hua Medicine has capitalized on this policy tailwind, successfully gaining inclusion in the National Reimbursement Drug List, thereby injecting new momentum into its expansion in the domestic diabetes market.

Following the official announcement of the results of the national medical insurance negotiations, the price reduction for dorzagliatin upon its inclusion in the medical insurance list is noteworthy.

Previously,Dorzagliatin is priced at approximately 420 yuan per box, with a price reduction of over 60% in this adjustment.Overall, with a dosage of two tablets per day at RMB 5.39 per tablet, dorzagliatin incurs a daily cost of RMB 10.78 and an annual cost of RMB 3,935. In fact, this price is 46% higher than that of the most expensive oral antidiabetic drug previously included in the National Reimbursement Drug List. Following the announcement of the pricing, market feedback indicated that the price met expectations and was considered reasonable.

After more than a decade of research and development, dorzagliatin was included in the National Reimbursement Drug List within one year of its market launch, with its pricing achieving a balance between social accessibility and corporate sustainability. This also demonstrates that the clinical value of dorzagliatin has been widely recognized.

Let us further examine the volume expansion and sales performance of domestically developed original drugs and other glucose-lowering agents after their inclusion in the National Reimbursement Drug List (NRDL). Taking BeiGene’s BTK inhibitor zanubrutinib as an example, its sales revenue in China increased by approximately RMB 600 million in 2021, a year-on-year growth of 331%, following its inclusion in the national NRDL at the end of 2020. With the addition of new indications to the NRDL, zanubrutinib achieved further volume expansion, with its domestic sales continuing to rise. Its domestic sales reached RMB 1.015 billion in 2022, and amounted to RMB 669 million in the first half of 2023. Similarly, dapagliflozin, jointly developed by AstraZeneca and Bristol Myers Squibb (BMS), also experienced a surge in sales after being included in the NRDL. Approved for import into the Chinese market in 2017, the product was added to the NRDL through price negotiations in 2019. In the subsequent three years, its year-on-year sales growth rates were 202.20%, 312.21%, and 155.50%, respectively. In 2021, hospital sales of dapagliflozin exceeded RMB 1.9 billion, rising to nearly RMB 3 billion in 2022.

These originator drugs have all experienced positive impacts after being included in the national reimbursement drug list. Following the inclusion of Hua Medicine’s dorzagliatin in the reimbursement list, the market anticipates a surge in sales volume.

The inclusion of Dorzagliatin in the National Reimbursement Drug List marks another significant milestone on Hua Medicine’s commercialization journey, but this is only the beginning; Hua Medicine has already implemented deeper and more mature strategic arrangements.

To ensure a continuous supply of dorzagliatin following its inclusion in the National Reimbursement Drug List, Hua Medicine has demonstrated strategic foresight by maintaining close collaboration with its manufacturing and commercialization partners since the product’s launch. By jointly investing with Changzhou PharmaBlock, Zhejiang Ruibo Pharmaceutical, and Shanghai Desano, the company has expanded production capacity to guarantee adequate market supply of the medication.

In August 2020, Hua Medicine and Bayer established a strategic partnership and reached a commercial cooperation agreement for dorzagliatin in China. Since the commercial launch of dorzagliatin, Hua Medicine and Bayer have worked closely together, successfully extending their sales network to cover three major channels: online pharmacies, retail pharmacies, and hospital pharmacies, thereby achieving substantial growth in sales revenue.

Since the beginning of this year, Hua Medicine has received two milestone payments from Bayer, totaling RMB 1.2 billion.As the product is included in the National Reimbursement Drug List, the collaboration between Hua Medicine and Bayer will continue to deepen, both parties will expand the market share of dorzagliatin in the field of diabetes management, particularly among patients with type 2 diabetes who have poor postprandial glucose control, enabling them to benefit from improvements in β-cell function and time in range (TIR).

In addition to continuously advancing its commercialization efforts, Hua Medicine is exploring further possibilities for dorzagliatin. In terms of indications, the company is conducting clinical studies on dorzagliatin for diabetes prevention and is also investigating its potential benefits in preventing endocrine and neurodegenerative diseases.

The innovation in drug development and the extensive experience accumulated on the path to commercialization have become the foundation for Hua Medicine’s global expansion.The company plans to submit an Investigational New Drug (IND) application in the United States by late 2023 or early 2024, continuing to advance the overseas development of its second-generation glucokinase activator (GKA).

From its listing on the Hong Kong Stock Exchange, to the launch of dorzagliatin, and then to the successful national reimbursement drug list (NRDL) negotiation, Hua Medicine is progressively implementing its innovative product portfolio strategy and steadily advancing commercialization. We look forward to seeing even more impressive performance from Hua Medicine, as a company dedicated to the R&D of first-in-class novel drugs, on its future commercialization journey.