China’s pharma market to see slower growth, but increasing innovation

SUZHOU, China – After growing rapidly in recent years, China’s pharma market will begin to see that growth slow, but market watchers said it is not necessarily all bad news.

China – With the outbreak tightly contained, business activities are starting to get back to normal in China. Opening in Suzhou on Thursday, the Enmore Bio Conference 2020 is one of the first industry galas to take place since the coronavirus hit the country. In the opening session, Chinese biotech insiders pointed to a bumpy road ahead for Chinese companies in the post-COVID-19 era.

Damage has been done at home and abroad. Eric Shao, general manager of commercial services in great China at Iqvia, said the health industry has shifted to digital to mitigate disruptions, but impacts on launches and sales will be inevitable.

Technology infrastructure has enabled agility. Global markets showed varying readiness for e-detailing models. China, in particular, has made much better progress than other countries in that respect. The country saw 583% more e-detailing and e-meetings, as well as other remote working methods such as phone, post and e-mail, while South Korea saw 256% and the U.S. saw merely 46%.

“China is leading in digitalization with a sixfold increase in digital and remote communications. Experts did not stop communicating among each other, and we can see that China’s biotech industry has been moving forward,” Shao said.

That said, the pandemic is still set to hit the pharmaceutical market hard. Shao said the disruptions in clinical development will lead to launch disruptions, which is expected to result in a cumulative loss of $10 billion worldwide from 2020 to 2028.

Separately, China has already seen the short-term impact on sales. Pharmaceutical sales fell 22% in hospitals and 6% in drugstores in the first quarter of this year compared to the same period last year. Sales in China’s pharmaceutical market will be flat at ¥1,010 billion (US$141 billion) in 2020, according to data from Iqvia.

The financial results of pharmaceutical companies will also be negatively impacted. End-market sales declined and production in Hubei province was reduced due to a lack of backup solutions, especially for local pharmaceutical companies in China.

Another impact faced by Chinese biotech companies, Shao said, is delayed clinical development. The outbreak has led to scarce medical resources, limited principal investigator capacity, difficult subject recruitment and eventually pending on-site work China’s pharma market. Patients outside of Hubei province also dramatically limited their hospital visits, with less than one-third of the previous patient volume seen in hospitals due to restrictions on movement.

All those will translate to challenges to innovation in China. There could also be slowing of approvals for products from both local and international companies. Shao called it a “roadbump” on China’s path to being an innovative pharmaceutical player.

Concerns for Chinese products

For ambitious Chinese biotech companies that aim to go global, another concern for them is global confidence in Chinese products.

Shanghai Junshi Biosciences Ltd. CEO Ning Li said Chinese innovation-driven companies could face more barriers in entering the global market after the pandemic. His concerns came after repeated complaints over the quality of Chinese medical products sent to the West.

“There will be many unfavorable factors for us to enter global markets, which largely reflect on how much evidence we can provide to prove the safety of our products to convince the others,” he said.

“When Chinese companies take their drug candidates to the West for clinical trials, they need to convince the foreign physicians to try their products,” he added.

A solution to that China’s pharma market, Li said, is for Chinese biotechs that really strive to innovate to create high-quality products and be able to provide scientific data to support their products.

“This will be a long-term challenge and cannot be overcome overnight, but I think the Chinese biotechs need to acknowledge this,” Li said.

But Frank Fan, chief scientific officer of Legend Biotech Corp., remains optimistic that there are more opportunities than challenges brought by COVID-19 to the biotech industry. He said the pandemic has made every government and even every individual realize the importance of health care and biotech innovation.

Contrary to Li’s concerns, Fan said he believes a quality product, no matter where it is developed, will be recognized.

“If a product shows value to mankind, it will be recognized in any market. When scientists see the product is beneficial for patients, they will be excited,” he said. “As long as we focus on innovation and do it right, we will have opportunities anywhere.”

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