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By Akash Saini, Ph.D., Manager- China In-Depth, Biopharma Insights

The market of major biologics in Mainland China* has grown three-fold since 2017 and could further grow five-fold over the next ten years, and the biosimilars industry is well-positioned to benefit greatly from this growth.

The approval of Shanghai Henlius Biotech’s HLX01—a biosimilar of rituximab (Roche’s MabThera)—in February 2019 marked the formal entry of biosimilars in Mainland China, even though copy biologicals such as Yisaipu (etanercept) have long existed in the country. Biosimilars of bevacizumab (Roche’s Avastin), trastuzumab (Roche’s Herceptin), and adalimumab (AbbVie’s Humira) have since launched, while many others are in late-phase development. In fact, Mainland China currently has the biggest biosimilars pipeline compared to any other country.

Mainland China’s biologics market is relatively small despite high patient burden 

Mainland China has a high burden of cancer and lifestyle disorders and according to DRG’s epidemiology research, the country bears the highest global footprint of many major diseases, including non-small-cell lung cancer, breast cancer, type-2 diabetes, and hypertension. Despite the disease burden and population, Mainland China’s market of premium-priced, targeted therapies—including biologics and their biosimilars—is relatively small compared to that of major markets such as the United States and the EU5. According to our research, the 2019 sales in Mainland China of major anticancer and immunotherapeutic biologics—that have either recently lost or are about to lose patent protection—were nearly $3 billion, of which only less than 2% were from biosimilars. In contrast, sales of these drugs in the United States and the EU5 were much higher—approximately $50 billion and $12 billion, respectively.

Regulatory and market access reforms are driving uptake of premium-priced medicines and encouraging domestic innovation 

The reasons behind the biologics’ poor penetration in Mainland China is their relatively late approval, low patient affordability, and poor rate of reimbursement. Even though more than 95% of Mainland China’s population is covered under the government’s public insurance schemes, most premium-priced therapies remained non-reimbursable and out of reach for patients until recently. Moreover, Mainland China’s domestic pharma has historically focused very little on research and innovation, leaving a white space that was almost exclusively filled by expensive MNC-manufactured products. However, the scenario is improving fast since 2017 when the Chinese government introduced major healthcare reforms to improve the regulatory and access and reimbursement landscape of the country. The most impactful of these reforms is the regular yearly update of the national reimbursement drug list (NRDL) since 2017, which now makes more than 1,400 Western medicines reimbursable in Mainland China, including worldwide blockbuster biologics against various cancers (e.g., bevacizumab, trastuzumab, rituximab) and rheumatological diseases (e.g., etanercept, adalimumab). In addition, incentives for domestic innovation and research has allowed many Chinese manufacturers to enter this segment, who are now competing with the MNCs through their domestically developed, cost-effective biologics and biosimilars. In fact, local manufacturers overwhelmingly dominate the biosimilars pipeline of Mainland China while MNCs have very little representation in the space, likely because of the MNCs’ unwillingness to compromise on prices in this highly competitive and price-sensitive market.

Mainland China’s biosimilars market is set to grow exponentially with anticipated entry of nearly 40 biosimilars in near future

With many biologics now reimbursable and many more expected to be approved and reimbursed in the coming years, Mainland China’s biologics market has finally started to flourish. Therapies included under the NRDL have registered robust growth in sales following the inclusion, despite undergoing massive price cuts. DRG research suggests that the market of major biologics in Mainland China has grown by three times since 2017 and could further grow by five times of its current size over the next ten years. Considering that many of these biologics have lost or are about to lose patent protection, biosimilars are set to benefit majorly from this growth spurt. Indeed, the biosimilars pipeline of Mainland China has more than 100 candidates in various phases of clinical development, many of which will be available in the market soon. DRG research suggests that in the next five years, Mainland China’s biopharma market could see the entry of more than 40 biosimilars of major anticancer and immunotherapeutic agents—most notably those of trastuzumab, bevacizumab, cetuximab, adalimumab, and rituximab—all of which are reimbursable and are approved for diseases with a high burden in Mainland China.

With a plethora of cost-effective and reimbursable options available in the market, more and more patients will shift to treatment with the biosimilars, allowing this market to grow exponentially. Even with price erosion of the branded drugs following the launch of their biosimilars—as already seen in the case of Roche’s Avastin and Herceptin (prices reduced by 23% and 24%, respectively) and AbbVie’s Humira (prices reduced by 59%)—the biosimilars will take away a significant proportion of patient share and sales from the brands. DRG’s forecast suggests that Mainland China’s biosimilars market will grow by 25 times in size by 2029, allowing it to become the second largest in the world after the United States. Furthermore, Mainland China’s domestic pharma will be the primary driver as well as the primary beneficiary of this growth, while MNCs will manage to gain very little from it.

Mainland China’s biosimilar-market growth will be a game changer for the country’s domestic pharma, which has so far had limited success in leveraging the country’s growing demand for Western medicine.

For DRG’s in-depth analysis of Mainland China’s emerging biosimilars market, read our China In-Depth | Biosimilars—Immunology and Oncology content. Contact us to learn more about the Mainland China healthcare market and disease-specific trends.