Is the Chinese market for pharmaceuticals going to overtake a stagnant Europe?

Written by: James Lee, Analyst

Contact: [email protected]

China, with 1.4 billion people, holds promise as a market for pharmaceutical companies due to its major overhaul of pharmaceutical regulation and access to new drugs. The country’s National Reimbursement Drug List (NRDL), which contains products that should be fully or partially reimbursed at a national level, has recently grown rapidly. After several years of no additions, it is now updated annually. In the 2022 NRDL update, 111 new drugs were added including 23 for tumours and 7 for rare diseases. The NRDL now covers 2,967 drugs, 1,586 Western, and 1,381 Chinese patent medications.

Health technology assessment (HTA) methodology is also developing quickly in China. The establishment of the China National Health Development Research Center (CNHDRC), a government-led health research body, in 2008 laid the foundation for HTA action in the country. It then followed this with collaboration with the National Institute for Health and Care Research (NICE) in 2010. Subsequently, between 2013 and 2016, the CNHDRC oversaw the development of national HTA guidelines and in 2018 established the National Center for Drug and Technology Assessment.

With a focus on cost-containment and providing sustainable healthcare services, HTA in China predominantly looks at:

  • drug safety,
  • clinical effectiveness,
  • cost effectiveness,
  • budget impact,
  • innovation,
  • and accessibility.

The key indicators of drug appropriateness are clinical need, application, and affordability. In 2019, the CNHDRC led the incorporation of real-world data (RWD) in assessments, something many long-standing global HTA agencies have struggled with. Analysis of Chinese HTA processes also indicates a substantial influence of the UK’s NICE guidelines on initial HTA assessments.

China is progressively moving towards universal health coverage with a priority-setting healthcare model. National policies including the China Basic Health Law, which underlines the regulations on affordable basic health care, are increasingly highlighting the functionalities and significance of HTA. With political support and international expertise, China is on the right track to establishing a seasoned HTA system. 

With drug pricing controls in force in the U.S. and Europe, such as the Inflation Reduction Act (IRA) and Germany’s law on statutory health insurers financial stabilisation (GKV-FinStG), companies may increasingly look beyond traditional markets. Indeed, most international pharma companies are focusing more and more on China and emerging markets to launch their products.

Despite this, however, China may still not be able to keep up with the premium prices offered for drugs in US and EU markets. Spinraza, a muscular atrophy treatment developed by Biogen, was included in the NRDL with a launch price of ~£80,000 per injection. After negotiation, this was reduced to ~£4,000, a ~95% discount. The resulting annual cost of treatment is ~£23k for the first year (down from ~£490k) and ~£11k each year thereafter (down from ~£240k).

Conducting research on the Chinese market is becoming very important, especially to understand the price potential and market access value drivers and barriers. Contact P4A to learn more about our ability to support you access new markets and enable rare disease patients to access new treatments.


Other posts you may like

Share post