China has been relatively slow to explore the space of biopharmaceutical industry; however, with economic development and changing regulatory reforms, the country is fast becoming a top destination for biopharmaceuticals. Between 2012 and 2016, China’s biopharma market grew from $9.4 billion to $22.8 billion, and the market is expected to touch $48.8 billion in sales by 2022.¹

Key growth drivers shaping the biopharmaceutical industry in China

• Rising healthcare expenditure
• Rise of the middle class (greater purchasing power)
• Enhanced reimbursement policies
• Robust growth of the general economy
• Government-backed biotechnology expansions
• Foreign biopharma companies consider China as one of the most promising outsourcing destination

Let us look at some key developments and trends in the Chinese biopharmaceutical industry.

Trend towards a Greater Market Share of Biologic Therapeutics

The Chinese pharmaceutical industry is observing a greater market share of biologic therapeutics, especially monoclonal antibodies (mAb) therapeutics. As per a report by BioPlan Associates, there are over 250 mAb therapeutics under clinical development in China, with CD20, HER2, EGFR, VEGF, and TNF-alpha being the main targets.¹

Local biotech companies in China are now innovating not only for China but for the global market. As per a Mckinsey report, local biotech companies have approximately 800 innovative molecules in the pipeline, among which 70–80 are in phase III.² Among these key players, many now conducting trials beyond China, either alone or via collaborations.

Exploring the Biosimilar Space

The biosimilar space represents a crucial opportunity to improve affordability and bring increased access to essential therapeutics – especially in cancer therapeutics. China is also viewed as a potential biosimilars powerhouse; however, compared to the United States (US) and European Union (EU), China still needs to gain traction.

China’s regulatory agency created national guidelines for developing and evaluating biosimilars in 2015, which broadly follows similar principles as the EMA and the FDA. Rituximab biosimilar, developed by Shanghai Henlius Biopharmaceutical (“Henlius”), is the first China-developed biosimilar to reach the market.

From Tradition to Innovation - Current Wave of Biopharma Has Attracted Many Chinese Companies

Though most Chinese companies and medical supplies manufacturers currently work on traditional pharmaceuticals, the coming years may witness the launch of novel biological therapeutics as well as many biosimilars. The current wave of biopharma has attracted many Chinese companies to invest more in innovative drug development. Many biotech firms are building on recent progress in genomics, focusing on rare genetic diseases.

Figure 1: Some of the key players in the Chinese biotech sector

(PD-1: Programmed cell death protein – 1 inhibitors; CAR-T: Chimeric antigen receptor T cells therapy)

Surge in International Collaborations

In recent years, global biopharmaceutical companies have made a number of collaborations with domestic partners. The companies are actively partnering on both the research and development (R&D) as well as commercial fronts.

• AstraZeneca has announced three large-scale initiatives to advance R&D for innovative new medicines in China.
• Swiss-based Roche is currently planning a new office in Shanghai that will be the company’s third-biggest branch. Roche announced that it will invest 863 million yuan ($125.87 million) to develop an innovation center, which is expected to boost top-notch medical research and development capabilities.
• Pfizer plans to reorganize into three businesses and base its leadership team for established medicines in China.
• Sanofi expects to establish a “China and emerging markets” business unit. This move reflects the greater impact sales in China and the other emerging countries have on Sanofi's bottom line.
• Kite Pharma and Fosun Pharmaceutical have announced a joint venture to develop CAR- T therapy in China.
• Janssen Biotech has entered into a worldwide collaboration and license agreement with Legend Biotech to develop, manufacture and commercialize a chimeric antigen receptor (CAR) T-cell drug candidate.

Opening Doors to Digital Innovation

The widespread use of smart devices and innovative digital tools has paved the way for digital innovation. The rise of digital technologies is changing the way a new product is launched; digital innovation is also enabling greater patient-centricity. In 2017, GSK China and Ali Health jointly announced a strategic partnership to launch an innovative adult vaccination service system. The system included online disease education and consultation, online HCP appointment booking, and delivered convenient online-to-offline (O2O) end-to-end service for users.

While digital advances will have a major impact on the industry, the adaptation to digital transformations in the Chinese biopharma sector is still in infancy.

Government Reforms That Favour Innovative Drug Development

The last few years have witnessed the efforts of the Chinese government to streamline regulatory reforms and cultivate an innovation-oriented environment. Some of the regulatory reforms which may favour innovation in biopharma are listed below:

• Inclusion of innovative drugs in the NRDL (National Reimbursed Drug List).
• In 2017, the China Food and Drug Administration (CFDA) announced fast approval track for innovative drugs that have significant clinical value.
• Previously, drugs imported to China required additional clinical trials, in addition to those conducted overseas, and thus their registration process could last substantially longer than that of domestic drugs. In 2018, the National Medical Products Administration (NMPA) published technical guidelines on accepting overseas clinical trial data.
• There is also a surge in public programs granting innovative projects access to startup funds, offices, laboratories and other services. A noted example is the Shanghai Center of Biomedicine Development inside the Zhangjiang Hi-Tech Park, which is an important hub for local biotech companies as well as those from abroad

Chinese Biopharmaceutical Market: Future trends

The robust growth in China’s biopharmaceutical sector is boosted by continuous investment in the sector. Changing regulatory reforms and investments in biopharma industrial hubs are strong predictors of future growth in the biopharma space.

References

1. Xia, V.Q., et al, Advances in Biopharmaceutical Technology in China, 2nd edition; Society of Industrial Microbiology and Biotechnology and BioPlan Associates, Inc., October 2018.

Asia on the move: Five trends shaping the Asia biopharmaceutical market. McKinsey and company. https://www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/asia-on-the-move-five-trends-shaping-the-asia-biopharmaceutical-market

About the Author:

Neeta Ratanghayra is a freelance medical writer, who creates quality medical content for Pharma and healthcare industries. A Master’s degree in Pharmacy and a strong passion for writing made her venture into the world of medical writing. She believes that effective content forms the media through which innovations and developments in pharma/healthcare can be communicated to the world."

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