Around The Globe

50 + Percent Discount on Innovative Cancer Drugs
China’s Reimbursement List

Minhua Chu
Intern, DIA

C

hina is improving the accessibility of innovative drugs, especially expensive anti-cancer drugs. On October 10, China’s State Medical Insurance Administration (SMIA) announced the results of the new round of negotiations: 17 anti-cancer drugs (see below) were included in the country’s National Reimbursement Drug List (NRDL) with discounts averaging 56.7 percent. Ten of these were launched in China in 2017, including two from domestic manufacturers.

Company Drug Insurance Price (CNY) Price Discount*
Novartis Sandostatin 7,911 (30mg)
5,800 (20mg)
39.89%
Tasigna 94.7 (200mg)
76 (150mg)
68.46%
Zykadia 198 (150mg) 60.40%
Votrient 272 (400mg)
160 (200mg)
65.22%
Pfizer Xalkori 260 (250mg)
219.2 (200mg)
70.86%
Inlyta 207 (5mg)
60.4 (1mg)
70.76%
Sutent 448 (50mg)
359.4 (37.5mg)
263.5 (25mg)
155 (12.5mg)
66.88%
AstraZeneca Tagrisso 510 (80mg)
300 (40mg)
71.02%
Boehringer Ingelheim Giotrif 200 (40mg)
160.5 (30mg)
39.21%
Bayer Stivarga 196 (40mg) 45.55%
Celgene/BeiGene Vidaza 1,055 (100mg) 59.81%
Janssen Imbruvica 189 (140mg) 65.00%
Takeda Ninlaro 4,933 (4mg)
3,957.9 (3mg)
3,229.4 (2.3mg)
46.38%
Merck KGaA Erbitux 1,295 (100mg/20ml) 69.46%
Roche Zelboraf 112 (240mg) 46.15%
Chiatai Tianqing Focus V 487 (12mg)
423.6 (10mg)
357 (8mg)
45.03%
Hengrui Pharma Pegaspargase 2,980 (5ml:3750IU)
1,477.7(2ml:1500IU)
39.92%

Company: Novartis
Drug: Sandostatin
Insurance Price (CNY): 7,911 (30mg); 5,800 (20mg)
Price Discount*: 39.89%

Drug: Tasigna
Insurance Price (CNY): 94.7 (200mg); 76 (150mg)
Price Discount*: 68.46%

Drug: Zykadia
Insurance Price (CNY): 198 (150mg)
Price Discount*: 60.40%

Drug: Votrient
Insurance Price (CNY): 272 (400mg); 160 (200mg)
Price Discount*: 65.22%

Company: Pfizer
Drug: Xalkori
Insurance Price (CNY): 260 (250mg); 219.2 (200mg)
Price Discount*: 70.86%

Drug: Inlyta
Insurance Price (CNY): 207 (5mg); 60.4 (1mg)
Price Discount*: 70.76%

Drug: Sutent
Insurance Price (CNY): 448 (50mg); 359.4 (37.5mg); 263.5 (25mg); 155 (12.5mg)
Price Discount*: 66.88%

Company: AstraZeneca
Drug: Tagrisso
Insurance Price (CNY): 510 (80mg); 300 (40mg)
Price Discount*: 71.02%

Company: Boehringer Ingelheim
Drug: Giotrif
Insurance Price (CNY): 200 (40mg); 160.5 (30mg)
Price Discount*: 39.21%

Company: Bayer
Drug: Stivarga
Insurance Price (CNY): 196 (40mg)
Price Discount*: 45.55%

Company: Celgene/BeiGene
Drug: Vidaza
Insurance Price (CNY): 1,055 (100mg)
Price Discount*: 59.81%

Company: Janssen
Drug: Imbruvica
Insurance Price (CNY): 189 (140mg)
Price Discount*: 65.00%

Company: Takeda
Drug: Ninlaro
Insurance Price (CNY): 4,933 (4mg); 3,957.9 (3mg); 3,229.4 (2.3mg)
Price Discount*: 46.38%

Company: Merck KGaA
Drug: Erbitux
Insurance Price (CNY): 1,295 (100mg/20ml)
Price Discount*: 69.46%

Company: Roche
Drug: Zelboraf
Insurance Price (CNY): 112 (240mg)
Price Discount*: 46.15%

Company: Chiatai Tianqing
Drug: Focus V
Insurance Price (CNY): 487 (12mg); 423.6 (10mg); 357 (8mg)
Price Discount*: 45.03%

Company: Hengrui Pharma
Drug: Pegaspargase
Insurance Price (CNY): 2,980 (5ml:3750IU); 1,477.7(2ml:1500IU)
Price Discount*: 39.92%

* Discount compared to 2017-2018 retail price; Source: China Health Insurance magazine.

* Discount compared to 2017-2018 retail price; Source: China Health Insurance magazine.

The negotiation of anti-cancer drug access is one of the most important tasks for the newly-formed SMIA, which was officially established on May 31. The new SMIA (see chart below) consolidates the health reimbursement functions from the National Development and Reform Commission (NDRC), the Ministry of Human Resources and Social Security (MOHRSS), the National Health and Family Planning Commission (NHFPC, now changed to the National Health Commission), and the Ministry of Civil Affairs (MCA). This reform was part of the reorganization of the Chinese central government.

This is the second round of negotiation between the Chinese authorities and pharmaceutical manufacturers. The valid period of the price is two years, same as the last round in 2017. This round aims to cut prices, to increase affordability, because the medical reimbursement fund is currently tight. China also removed import tariffs, reduced the import value-added tax to three percent, and pressured companies to reduce prices accordingly.

Getting into the NRDL is critical for drug makers to gain market share because the Chinese medical insurance system is dominated by the government. They prefer to use discounts in exchange for volume growth. In fact, this is true for the 36 drugs that succeeded in the 2017 round. According to the China National Pharmaceutical Industry Information Center’s database, the sales volumes of most of these drugs increased in the first quarter after negotiation, and some jumped significantly.

For example, in Q2 2018, the volume of 17 of these 36 drugs, including AstraZeneca’s Faslodex, Roche’s Avastin, and Novo Nordisk’s Victoza, increased more than 200 percent compared to this same quarter last year. GSK’s Seroxat (paroxetine) increased the most at 6,448 percent, followed by two drugs from local companies: Salubris’ Xinlitan (allisartan) and Hansoh’s Mailingda (morinidazole), whose volumes increased by 6,119 percent and 3,223 percent, respectively. Sales also increased significantly in this same period: 17 drugs increased more than 100 percent, with Sanofi’s Renvela (4,919 percent), Xinlitan (4,570 percent), and Seroxat (4,237 percent) posting the largest percentage sales increase.

Novartis seems to be the biggest winner of this latest round, with four drugs listed, followed by Pfizer’s three; but Novartis’s Jakavi was the only one of the original 18 drugs chosen for final negotiation not included in the final list.

The only monoclonal antibody in this round, Merck KGaA’s Erbitux, was listed at the price of CNY 1,295. This drug entered but failed the 2017 negotiation round. This time, the company reached a deal with the Chinese government for a 69 percent discount, called “the lowest price in the world” by Merck executives.

Eleven of these 17 drugs are small molecular-targeted therapeutics. The third generation EGFR-TKI inhibitor, AstraZeneca’s Tagrisso, has the biggest discount of all 17 drugs (71 percent). Local Chinese company Chiatai Tianqing (CTTQ) offered a 45 percent discount for its Focus V (anlotinib), which just recently (May 2018) received regulatory approval.

Tagrisso and Focus V target non-small cell lung cancer (NSCLC), the most prevalent cancer in China and a drug development hotspot. Five drugs in this round are for this indication (the other three are Novartis’ Zykadia, Pfizer’s Xalkori, and Boehringer Ingelheim’s Giotrif). Other oncologic indications include renal, liver, colorectal cancers, melanoma, and hematologic malignancies.

To be accessible to patients, these 17 drugs still need to complete three steps: quoted prices on the provincial-level procurement platform, signed procurement contracts with hospitals, and prescriptions by physicians. To speed up the process, the SMIA explained the details the day after the negotiation results were announced.

According to the SMIA, all 17 drugs will be listed in the Provincial Reimbursement Drug List (PRDL). Provincial authorities cannot change the level of reimbursement, and the negotiated price is the final sale price to hospitals (“second bargaining” is prohibited). SMIA also regulates the implementation timeline: These 17 drugs shall be in local procurement platforms by the end of October, and can be prescribed before December.

Four provinces and municipalities (Zhejiang, Heilongjiang, Fujian, Tianjin, and Guangzhou) issued their implementation policies within three days after the results of the negotiation were published.