Multinational pharmaceutical companies are digging into the Chinese market and rely on new products to drive growth

In China, the generic drugs of large pharmaceutical companies are facing tremendous pressure from the national drug centralized procurement and price reduction plan

Western drugmakers such as AstraZeneca, Bayer, Eli Lilly, Merck, Novartis, Novo Nordisk and Sanofi reported growth in drug sales in China in the first half of 2021

Innovative drugs drive growth

In the past few years, AstraZeneca has become a leading multinational pharmaceutical company in the Chinese market

Despite having to offer substantial discounts, AstraZeneca has been working hard to include its drugs in China's National Medical Insurance List (NRDL)

More importantly, AstraZeneca is maximizing the benefits of its SGLT2 inhibitor Forxiga/Anda Tang (dapagliflozin)

The Chinese sales of Lynparza, a targeted anticancer drug jointly developed by AstraZeneca and Merck & Co.

Merck's HPV vaccine Gardasil/Ga Wei Vaccine (a nine-valent recombinant human papilloma virus vaccine) has been in short supply since its approval in China in 2018

In addition to Gardasil, the total revenue of the liver cancer drug Lenvima/Levima (lenvatinib), which Merck and Eisai collaborated with, increased by 15% to US$181 million in the second quarter at constant exchange rates

However, it is worth mentioning that after challenging Eisai’s key Lenvima patents, Simcere Pharmaceuticals and Chia Tai Tianqing Pharmaceutical’s lenvatinib mesylate capsule generic drugs were approved for listing on July 20 at the same time

Another company that has benefited from its recent inclusion in the health insurance catalog is Novartis

At the same time, Novartis’s blockbuster heart disease drug Entresto/ Nuoxinto (sacubatril valsartan sodium) sales in China in the first half of the year tripled year-on-year, making China the second largest after the United States.

Overall, Novartis’s China business’s sales in the second quarter increased by 18% at constant exchange rates to US$811 million

Eli Lilly’s sales of new drugs have accelerated significantly in the past three quarters, and the company achieved a 35% growth in China in the second quarter of this year

In addition to the aforementioned companies, Bayer's pharmaceutical division achieved 22% growth in China in the second quarter, thanks to the anticoagulant Xarelto/Xarelto (rivaroxaban)

Adjust strategy

At the same time, in order to reduce drug costs, China launched centralized drug procurement in 2018, aiming to reduce the prices of generic drugs

Pfizer has divested its generic and generic drug business unit, Pultron, and established a new global pharmaceutical company, Viatris, with Mylan

Merck has split its generic drug and women’s health and biosimilar product portfolio into Organon
.

Takeda recently sold some cardiovascular and metabolic drugs in mainland China to the local company Haisen Biomedicine
.

Eli Lilly recently divested Menarini of the Chinese rights of Cialis/Cialis (tadalafil) for erectile dysfunction treatment
.

So far, the national centralized drug procurement plan has only focused on small molecule drugs
.

On July 28, the National Medical Security Administration of China convened insulin developers to discuss potential rounds of collection of key diabetes drug categories
.
Many industry observers worry that this move may limit the potential addition of biologic drugs and biosimilars in the future, triggering increased concerns among multinational pharmaceutical companies
.

Novo Nordisk and Sanofi will be most affected by the centralized procurement of insulin products
.

Although the GLP-1 inhibitor Ozempic/Novotel (Smeglutide) was recently launched in China, insulin products still account for the majority of Novo Nordisk’s sales in China
.
In the first half of the year, Novo Nordisk's insulin sales in China reached 6.
2 billion Danish kroner (nearly 1 billion U.
S.
dollars), a year-on-year increase of 10% at a constant exchange rate
.
In contrast, the Danish pharmaceutical company’s GLP-1 sales in the country were only 833 million Danish kroner (131 million U.
S.
dollars) after a 68% year-on-year increase
.
Novo Nordisk is currently the largest insulin manufacturer in China, with a market share of 50.
8% as of May
.

Sanofi, another major insulin manufacturer, remains "always vigilant to understand any trends that are included in the centralized procurement of the insulin category
.
"