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In recent years, with the continuous advancement of China's medical reform and the catalysis of capital, the innovation vitality of China's biomedical industry has been continuously improved, and R&D technology has moved towards
high-quality development.
On the other hand, the evolution of the global commercialization pattern has also accelerated the internationalization process
of China's pharmaceutical industry.
"Going overseas" has become one of the most concerned industry buzzwords, and it seems to have become the only way
for local innovative pharmaceutical companies to "live longer and better".
The series consists of three parts, which will analyze, discuss and prospect the pain points of the internationalization of Chinese pharmaceutical companies:
"Overseas Wayfinding, the Next Decade for Chinese Local Pharmaceutical Companies" seriesWayfinding and pathfinding: the reasons and trends of innovative pharmaceutical companies going overseas
Wayfinding and pathfinding: the reasons and trends of innovative pharmaceutical companies going overseas"Combo punch" attack: overseas mode and market selection
Inspiration and reflection: a voyage that "opens up a different way"
As the first part of this series, this article will analyze
the drivers and trends of innovative pharmaceutical companies going global.
Wayfinding and pathfinding
Wayfinding and pathfindingReasons and trends for innovative pharmaceutical companies to go overseas
Reasons and trends for innovative pharmaceutical companies to go overseas"Going out" is not a new thing
for China's pharmaceutical industry.
As early as 2007, generic drugs, as the vanguard product of Chinese pharmaceutical companies going overseas (nevirapine of Huahai Pharmaceutical for the treatment of HIV), opened the door
for Chinese pharmaceutical companies.
As of October 2022, a total of 70 local pharmaceutical companies have obtained ANDA approvals for 333 products in the United States, accounting for all FDA
26%
of ANDA approved products.
In contrast, China's innovative drugs are still on the long journey of "going to sea", constantly exploring and forging ahead
.
*Source: "Overseas Wayfinding, China's Local Pharmaceutical Companies in the Next Decade" PPT
In order to help Chinese pharmaceutical companies that are or are about to deploy global development to go better, more stable and longer on the road of "going to sea", in June this year, GBI and KPMG jointly released the "Sword to the World! The White Paper on the Next Decade of China's Innovative Pharmaceutical Enterprises (hereinafter referred to as the "White Paper") has systematically sorted out the difficulties and challenges faced by China's innovative drugs in the internationalization of their journey, systematically sorted out from different perspectives such as transactions, taxation, talents, global market access and pricing, and put forward thoughts and inspiration based on existing cases, hoping to witness this "new Chinese force" leading a new wave of internationalization of pharmaceutical enterprises
.
1 Going overseas, why has it become the "natural thing" of innovative pharmaceutical companies?
1 Going overseas, why has it become the "natural thing" of innovative pharmaceutical companies?The development of innovative drugs in China started late, less than 20 years ago
.
Until the 18th National Congress in 2016 put forward the call that "China's future development should be driven by scientific and technological innovation", when innovation became a national strategy, it became a problem
that pharmaceutical companies had to think about.
In 2016, the national drug regulatory authorities began to make a series of reforms, such as accelerated approval and accelerated access, which supported the development of
innovative drugs from the policy level.
The proportion of self-developed new drugs approved by local enterprises in China increased from 2% in 2016 to 35.
8%
in 2021.
At the same time, the speed of new drugs entering the medical insurance catalog is also accelerating, from more than 8 years after approval in the past, to only 1 and a half
years on average.
*Source: "Overseas Wayfinding, China's Local Pharmaceutical Companies in the Next Decade" PPT
However, the low price paid by China's medical insurance cannot meet the return of innovative drugs on cost, cannot reflect the value of innovative drugs, and even cannot meet all clinical needs
.
According to relevant industry insiders in previous interviews with GBI enterprises, the investment cost of a PD-1 is about 10~2 billion, but the final domestic per capita purchase is 30,000 per year, and this revenue cannot be profitable
.
This may be an important driving factor
for domestic innovative drugs to go overseas.
for domestic innovative drugs to go overseas.
But what is the underlying logic in it? Why don't our innovative drugs get the rewards they deserve? If we want to "go to sea", how exactly should we go?
2 Pathfinding, should there be "pathfinding" first?
2 Pathfinding, should there be "pathfinding" first?Some people say that the pharmaceutical innovation environment in the United States is GDP
19.
7% of the input was smashed out
.
So should China learn from the United States? China's medical insurance system was established in the 90s of the twentieth century, and its keynote is to ensure the basics, not to meet innovative drugs
.
Compared with the mature market in the United States as an example, the difference between China and its ability to pay for medicines can be clearly felt
through the proportion of GDP and medical input, as well as a medium-priced best-selling drug.
*Source: "Overseas Wayfinding, China's Local Pharmaceutical Companies in the Next Decade" PPT
As shown in the figure above, China's overall medical payment capacity is 1/4 of that of the United States; per capita is 1/17
of that of the United States.
Take a best-selling drug as an example, assuming that everyone needs to use this drug, the United States' ability to pay can cover 69% of the country's population; And China, with its nearly 1/7 price, can only cover 26%
of the country's population.
Obviously, this runs counter to the principle of "preserving the basics"
.
If China also wants to cover 69% of the country's population, it will have to be more than 50% lower in price to be affordable
.
This is a limitation of the total amount of medical investment, which is also due to the difference
in the stage of development of the two.
"High returns" make the United States a coveted overseas "sweet potato", but repeated cases also prove that from salivation to real "eating" and "eating well", accurate self-positioning, in-depth market insight and effective strategic layout
are indispensable.
According to the "Brief Analysis of China's Pharmaceutical Foreign Trade in the First Half of 2022", our exports of pharmaceutical products to the United States amounted to US$14.
881 billion, down 10.
61%
year-on-year.
There is no shortage of geopolitical factors
in this decline.
However, we need to pay special attention to the fact that the Belt and Road, the SCO, Southeast Asia, South America, and Africa all have a lot of markets, especially the export value of the "Belt and Road" countries, which increased by 29.
8%
year-on-year.
At this year's G20 summit, many companies signed agreements
with Southeast Asian countries on localized production.
8%
year-on-year.
Therefore, while paying attention to the European and American markets, it is also necessary to pay attention to other markets
.
In GBI's daily communication with enterprises, it is found that more and more pharmaceutical companies/CXOs will use Singapore as a bridgehead to enter Asia or go abroad
.
In a recent conversation with Song Ruilin, president of the China Pharmaceutical Promotion Association, GBI said that if there are cheap good drugs, it is impossible for a country to say no, because it is beneficial to its own socio-economic development, but we must meet the clinical needs
of the other party.
Therefore, after clarifying our real purpose of going to sea, we must also think about the compatibility between our own drugs and the target market, that is, whether we can go to sea
.
.
Pathfinder 1: Frequent approval/breaking" insight findings
Pathfinder 1: Frequent approval/breaking" insight findingsIn recent years, the US FDA has approved first-in-class (FIC) drugs accounting for as much as 40%, while China's innovation and development has only about 10 years, and the approved FIC is only 8%, and the vast majority of them are imported drugs
approved in Europe and the United States in that year.
In other words, there is still a lot of room for improvement in the innovation level of China's drugs, and the degree of meeting the clinical needs of the target market is not enough, which explains why China's innovative drugs frequently fail when submitting marketing applications in the United States
.
How to understand the oft-heard "need to include more MRCT representative of the US patient population"? And how do you think that the previously popular PD-1 is now in the crazy "involution" of indications? There is a big misunderstanding here, our unfulfilled clinical needs ≠ each other's unfulfilled clinical needs, especially in developed markets
such as the United States.
Therefore, enterprises must systematically and accurately interpret the target market in advance, and then carefully examine whether their products can really meet the unmet clinical needs of the other party, rather than just having a single price advantage
.
such as the United States.
*Source: "Overseas Wayfinding, China's Local Pharmaceutical Companies in the Next Decade" PPT
Pathfinder 2: Insight findings on "Introduction VS External" licensing transactions
Pathfinder <>: Insight findings on "Introduction VS External" licensing transactionsHappily, we currently have such a product
.
The most representative are BeiGene's zebrutinib and the legendary creature's CAR-T Cidarki Orense
.
Zebrutinib, in particular, was first
approved in China after being marketed in the United States.
In fact, Baekje and Legend also represent two different models for local pharmaceutical companies to go global, which has been analyzed and interpreted in detail in GBI's earlier white paper (click to read).
*Source: "Overseas Wayfinding, China's Local Pharmaceutical Companies in the Next Decade" PPT
In addition, we are also pleased to see that more and more drugs have received or are gaining attention and affirmation
from foreign pharmaceutical companies.
According to GBI's review of authorized transactions from 2016 to 2021 (click for related reading), although there are not many license-out products, the total amount disclosed (US$15.
8 billion) has exceeded the amount of license-in (US$15.
5 billion), and the average external transaction amount is 3 times
the amount of imported transactions.
It can be seen that the influence of China's pharmaceutical industry in the world is increasing day by day, and the gap with international advanced counterparts will gradually narrow
in the future.
"Going to sea", we already have the strength and potential
.
(To be continued.
.
.
) ）
