Pages

November 05, 2012

China Diabetes Triples Creating $3.2 Billion Drug Market



Beijing doctor Li Guangwei sees China’s struggle with 90 million diabetes sufferers daily. Among the standing-room-only crowd waiting outside his clinic door are patients with slurred speech, mismatched clothes and aggression.
These are the ones with low blood-sugar, a condition that can make people appear drunk and is often caused by too much of the hormone insulin, said Li, head of Fuwai Hospital’s diabetes unit. More than half of China’s diabetics have inadequate blood- glucose control, a 2011 study of 140,000 patients showed.
Prevalence of Type 2 diabetes, a disease linked to inactivity and excess calories, has more than tripled in China over the past decade, fueling 20 percent-a-year growth in drug sales and straining health services. It’s also stoking need for newer, costlier medications from Merck & Co. (MRK), Novo Nordisk A/S (NOVOB) and Sanofi that help avoid blood-sugar spikes and complications such as heart attack and stroke.
“If we can choose drugs with little or no risk to more effectively treat patients, we can stop using older drugs that raise insulin levels and can cause hypoglycemia,” said Li, using the medical term for low-blood sugar that sometimes causes his patients to become delirious and to pick fights. “It impairs brain function and there’s no way to stop it until we get the blood sugar back to normal.”

Merck, Novo Nordisk

The mainstay diabetes treatment worldwide is metformin, available free in China through the government’s national health insurance program. Doctors want to augment the 50-year-old pill with newer medicines, such as Januvia from Merck, which helps to stabilize blood-sugar, according to an April 2012 paper in the journal Diabetes & Metabolism. Victoza, sold by Novo Nordisk, offers “minimum risk of hypoglycemia,” according to company- sponsored research in the Lancet in 2010.
Novo fell 0.5 percent to 915.50 kroner at 11:09 a.m. in Copenhagen trading, while Sanofi declined 1.6 percent to 68.34 euros in Paris. The Bloomberg Europe Pharmaceutical Index (BEPHARM) dropped 0.1 percent.
As few as two in five diabetics in China have their blood- sugar under control, said Ji Linong, president of the Chinese Diabetes Society, potentially damaging the heart, blood vessels, kidneys, eyes and feet. That compares with the U.S., where blood-sugar is controlled in 70 percent, according to Manish Pant, director of policy and programs at the International Diabetes Federation in Brussels.

Average Spending

A key difference is that an average of $194 a year is spent treating each diabetes patient in China, versus more than $5,000 in developed countries such as the U.S., the IDF said. Even as China’s health spending is forecast to almost triple to $1 trillion over the next eight years, surging rates of diabetes mean China is struggling to detect cases and provide basic care, according to Pant.
China has almost four times as many people with diabetes than the U.S., where there are 23.7 million sufferers, according to the IDF. By 2030, 40 million more will have the condition in China, where diabetes causes 173.4 billion yuan ($28 billion) a year in medical costs, the diabetes group estimates.
“China, unfortunately, has become the world’s capital for diabetes,” said Michael Rosenblatt, Merck’s chief medical officer, in an Oct. 25 interview in Shanghai. “The government is starting to pay more attention as this is the beginning of a huge problem, both health and economic.”
China’s diabetes drugs market will expand 20 percent annually to reach 20 billion yuan ($3.2 billion) by 2016, spurred by guidelines that set higher treatment standards, said Yan Shangjun, a Shanghai-based consultant with IMS Health Inc. China’s pharmaceuticals market overall will increase 15-to-18 percent a year to reach as much as $165 billion over the same period, the research company said in July.

Medicines for the Masses

Merck’s Januvia was approved for use in China in 2009 and costs 9.6 yuan ($1.50) per 100-milligram tablet, typically taken daily. Merck has applied to have the medicine added to China’s National Drug Reimbursement List, the Whitehouse Station, New Jersey-based drugmaker said in an e-mail.
It takes as long as five years for a new product to be added to the reimbursement list, McKinsey & Co. said in an August report. Addition makes it available to the masses and can bolster sales, with 12 of the top 15 multinational drugmakers deriving more than half their sales in China from subsidy- eligible medicines, the report said.
“The government is afraid of accepting at a national level a high cost reimbursement structure that they can’t afford,” said George Baeder, senior vice president of Asia-Pacific consulting with Quintiles Transnational Corp.

Wealthier Patients

Still, wealthier patients will pay out of pocket to get better care, said Lu Bin, a diabetes specialist at Shanghai’s Huashan Hospital.
“There will be real demand for newer drugs that don’t cause hypoglycemia and other side effects,” Lu said in an interview at the hospital’s diabetes clinic, where the waiting room was full at 8 a.m. on a Friday morning. “In Shanghai, where incomes are higher, most people should be able to afford it, but outside the first-tier cities there may be issues.”
Some more-affluent provinces are introducing their own pharmaceutical subsidies to improve affordability, encouraging drugmakers to target markets outside major urban centers, said Joseph Cho, head of the Research and Development-Based Pharmaceutical Association Committee, a Beijing-based group representing foreign companies.
“We see a massive opportunity to move deeper into the country,” said Fabrice Baschiera, general manager of Sanofi (SAN)’s China drugs business. “We’ve moved into the tier-two cities, and we’re moving deeper into the tier-three and the counties, where the government is today investing massively because there is a huge unmet need.”

Sanofi’s Lantus

Sanofi sells Lantus, an insulin product that Baschiera estimates has 17 percent of the market in China.
China has overtaken Japan to become Novo Nordisk’s biggest market after the U.S., Chief Scientific Officer Mads Krogsgaard Thomsen said.
“We expect China to grow in the range of 15 percent a year,” he said. “China has such a huge problem -- we are talking about 100 million diabetes patients versus 26 million in the U.S.”
Novo Nordisk, the world’s largest insulin marker, wants to supply provincial-level centers with higher-volume, lower-margin insulin products. At the same time, Thomsen said, it’s targeting more profitable markets in China’s biggest cities with products such as Victoza, which mimics a hormone called GLP-1 to stimulate natural insulin production.
The Bagsvaerd, Denmark-based company said it hasn’t applied for reimbursement for Victoza yet as the window for review isn’t currently open. A 10-to-15-day course of Victoza, approved in China in 2011, costs as much as 878 yuan ($140), Novo said.
The company lifted its 2012 sales and profit forecasts on Oct. 31 after third-quarter earnings beat analyst estimates, helped by demand for Victoza in new markets.

No comments:

Post a Comment