Biosimilars in China

– an overview of conditions and trends

The demand for biomedicines in China is growing, due to the emergence of new diseases coupled with rising incomes and a rapidly expanding middle class. As the prices of most biological drugs remain unaffordable to
the majority of the population in China, biosimilars (“copies” of biological medicines with expired patents) developed by local companies are coming to play an increasingly important role.

Chinese producers of biosimilars have raised their technical capacity significantly over the past years, and some of them are today leading in the biosimilar industry. Many of these firms are at the same time aiming to develop patents for brand name biologic drugs.

The Chinese government has contributed to this trend by directing funding towards R&D in the biotech sector. In February 2015, the government also issued new legislation for development, production and testing of biosimilars. These regulations are expected to improve accessibility and quality of biological drugs in China, and at the same time weed out some of the “follow-on-biologics” that don’t meet the standards for biosimilars.

Some Chinese firms are today developing biosimilars that can be marketed at a price level of around 40 per cent of imported alternatives. The most common biosimilars on the market in China are used in treatment of cancer (breast cancer, kidney cancer, leukemia, and skin cancer), autoimmune disease, anemia and treatment related to organ transplants. Many Chinese companies are exporting biological drugs, primarily to markets in Latin America and Eastern Europe. A challenge to Chinese drug firms is the price of the brand named biologic drugs that they seek to develop a version of (the “reference drug”). This is especially a barrier to small companies with limited financial capacity. At the same time, the competition on the biosimilar market is increasing, as several firms seek to develop versions of the same drug.

The extent to which biomedicines are copied differs on the type of drug. For example, it is estimated that Roche dominates the market of interferons in China, and has so far met with limited competition with Chinese firms. On the other hand, Novo Nordisk is increasingly competing with Chinese firms that have developed similar copies of its biomedicine insulin treatment.

There is a growing market potential for biomedicines in China. AstraZeneca’s plans to invest in a new research centre in Shanghai and Wuxi, and the consideration to invest in production capacity for biomedicine in China is in line with this trend. There is a demand for Swedish experience in research and production of biomedicines. In general, there is a need to provide greater support for small Swedish firms that aim to establish themselves on the Chinese market. Further, there are interesting possibilities to cooperate with Chinese actors in testing new biomedicines, as China’s efforts in building gene and blood banks in recent years creates advantageous conditions for such activities.

Continued attention should be directed towards China’s research into stem cells and diagnostics, where the country in some aspects is leading. This is especially the case for diseases that are more prevalent in Asia, such as liver disease, respiratory diseases and gastric cancer. In these areas, Chinese companies and research institutes are expected to continue developing increasingly sophisticated biosimilars as well as brand named biologic drugs.

Biosimilars in China – an overview of conditions and trends

Serial number: Direct response 2016:03

Reference number: 2016/034


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