An interview with Liu Qun, Head of IQVIA Biotech, China, on the Chinese biopharmaceutical market.
China has been an increasingly attractive market for pharmaceuticals in recent years. What makes the Chinese market appealing and how can emerging biopharmaceutical companies successfully debut in China?
In this interview with Liu Qun, Head of IQVIA Biotech, China, she shares more about the China opportunity and highlights some considerations for emerging biopharma companies.
According to the World Health Organization, China’s population is now ageing faster than almost all other countries in modern history. What are some diseases that are currently of greatest concern in China and how does this create a strong environment for market access to China?
Almost 40 per cent of China’s population – 330 million people – will be over the age of 65 by 2050. The sheer size of the market coupled with the rapidly ageing population and growth of chronic diseases makes the country a key area of concern.
China’s burden of disease and exposure to risk are high with more than 300 million men who smoke, and 160 million men and women who are hypertensive. It also has a high incidence of diabetes and cardiovascular diseases, with almost half of its population (121 million people) categorised as pre-diabetic. All these chronic diseases are related to the ageing population, economic development, and lifestyle changes. The composition is diseases in China is changing and mirroring that of Western countries.
This provides a robust potential for clinical development and commercialisation. China is particularly showing growth in speciality pharmaceuticals to treat cancer and other non-communicable diseases, in addition to robust overall pharmaceutical growth, as with the rest of the developing world.
Regulatory changes are helping to pave the way forward for market access to China. China’s National Medical Products Administration (NMPA), formerly the China FDA, has streamlined the trial approval process and implemented fast-track reviews and clinical trial waivers for priority medicines, including orphan drugs, products for the treatment of life-threatening conditions, and products that target unmet needs.
China was once viewed as a market to enter after first launching new products in the United States and/or Europe. Apart from the reasons mentioned earlier, could you also tell us what else has shifted in China that is now making it an attractive first launch market for emerging biopharmaceuticals?
In today’s landscape, there are clinical and commercial options available to emerging biopharmas (EBPs) that make China an attractive first launch market.
China is now the world’s second-largest biopharmaceutical market, trailing only the United States, and is forecast to be the world’s largest within the next 10 years. The Chinese pharmaceutical market is forecast to grow at a CAGR of 4.8% (±1.5%) between 2020 and 2025, reaching RMB1,289.7 billion in 2025 (USD$200.2 billion).
Changes within the regulatory landscape coupled with policy reform have caused a shift in this dynamic. China put forward its “Health China 2030” plan in 2016, which included increasing the accessibility of innovative drugs and the government has taken steps since to address this. The reform has since achieved remarkable progress and we are seeing a year-on-year increase in the number of foreign innovative drugs approved in China.
What can emerging biopharmas look forward to in the Chinese market?
A combination of factors makes China one of the most important markets for clinical research and created a strong environment for market access – particularly for emerging biopharmas (EBPs):
- The large and rapidly ageing population of 1.4 billion and growth of chronic diseases means there is a vast pool of treatment-naïve patients.
- Policy changes to bring innovative products to market and to better manage chronic disease. For example, the National Reimbursement Drug List (NRDL) also makes it easier for EBPs to get their innovative products on the list, which ultimately help to speed up access and improve affordability for patients.
- New partnering and outsourcing options that EBPs can use to enter and expand in China. There are four paths that EBPs can pursue when entering a new market such as partnering with big pharma, distributor, commercial solutions provider or doing it alone.
- Availability of capital and a large pool of clinical and commercialisation experts (also known as the synergistic “rocket fuel” of EBP growth). There are many individuals seasoned by work for global biopharma companies who have returned to China to work in this sector.
- China is also proving to be an excellent locale for Decentralised Clinical Trials (DCT). DCTs create a more patient-centric research experience, easing the burden of participation and reducing the disruption it causes to patients’ daily lives. With trial sites shut down, and patients unwilling or unable to travel, DCTs offered a way to keep research moving forward.
- Lastly, it’s Cell and Gene therapy (CAGT). China has undertaken numerous studies in CAGT in recent years.
As with opportunities, there will also be challenges. Could you tell us what obstacles are currently faced by emerging biopharmas in entering the Chinese market? How can IQVIA Biotech’s solutions help overcome them?
With any market, all opportunities come with some potential challenges to be managed and risks to be mitigated, such as pricing pressures from NRDL, regional disparities in go-to-market, shorter product lifecycles due to generic substitutions, and the challenges of managing clinical trials on time and to budget.
To manage hurdles, emerging biopharmas (EBPs) should be focused on which market entry solution works for them whether going at it alone, working with a big pharma company/distributor or partnering with a commercial solutions provider. Ultimately, choosing the right option, taking into account the EBP’s resources and overall strategy, will enable market entry success in China.
IQVIA Biotech integrates clinical and commercial expertise and services to deliver flexible solutions tailored specifically for small biotech and biopharma companies.
We partner with EBPs to develop comprehensive plans at an early stage to provide a roadmap for key activities – including cost and timeline factors – with investors and other key stakeholders in mind. Our local and global experts provide actionable insights and resources to help accelerate drug development, achieve commercial success, maximise value through an evolving commercial model and get the product into the hands of the patients who need it.
There are different paths EBPs can pursue when entering a new market, each with their own benefits and risks. What are some important short-term and long-term factors that EBPs should consider?
Bringing new therapies to a new market is fraught with risks and challenges: changing regulations, lack of an in-house sales network on the ground, unfamiliar marketplace mechanics, and uncertainty about local laws and intellectual property, to name a few. Big pharmaceuticals and medtech companies may have the time and resources to establish the necessary infrastructure, relationships, but typically EBPs do not.
There are four paths that EBPs can choose when entering a new market. These include partnering with big pharma, working with a distributor, going at it alone, or partnering with a commercial solutions provider. Each of these models offers a unique set of benefits and risks; however, choosing the approach that is right for a company will depend on its strategic intent.
Choosing the right strategy is vital for success.
- Work with a big pharma partner to navigate the legal and commercial landscape
Short term considerations: Eliminates a lot of the early entry risks and costs associated with building infrastructure and developing a team, while linking the unknown product to a well-established brand name and team. It also means a faster ramp-up of the sales cycle and using fewer resources compared with starting from scratch.
Long term considerations: An EBP may have less influence on the sales strategy and product messaging because they rely on the partner whose priorities will often be to build a market strategy that benefits its own portfolio first, which means the smaller company’s product may get sidelined. This may possibly dilute the value of the EBP’s product and lower the broader value of its product portfolio. The smaller company also sacrifices the opportunity to build its local relationships, expertise, and corporate brand presence in the country, limiting its ability to expand independently in the future.
- Work with a distributor
Short term considerations: While the product may make it to pharmacy shelves, the EBP may have to sacrifice its market strategy and can struggle to gain a foothold in the new markets. It may also miss the opportunity to establish relationships with local key opinion leaders. Distributors (like other partners) have a whole portfolio of products to sell and may accordingly make marketing decisions based on the needs of its entire portfolio, not on individual products.
Long term considerations: Companies will need to rely on distributors to understand and adhere to the intricacies of any critical compliance and regulatory issues. When choosing this route, EBPs must do substantial due diligence to ensure that the distributor’s strategies align with its own corporate policies, as well as local and international laws and regulations on these matters, as the perils of getting it wrong are enormous.
- Enter a new market alone
Short term considerations: This approach requires significant time, huge up-front investment, and a willingness to make mistakes while the business team figures out the China landscape.
Dealing with operational issues while confirming they have all the resources necessary to do business, and making sure they understand and have completed all licensing steps and compliance requirements, can complicate this model further.
Long term considerations: This can be financially beneficial as it ensures that the product will get the right marketing attention and product messaging, and that its value to the company will remain fully intact. It’s also an important step in a company’s strategic plans if it is seeking to create networks and expand its global presence while gaining a permanent foothold in China’s vast market.
- Partner with a global commercial solutions provider
Short term considerations: EBPs can take advantage of the extensive local knowledge and existing infrastructure, technology, and headcount of a global commercial solutions provider long-established in China – one that has established relationships with payers, providers, pharma, and patient communities. Although it requires an upfront investment, in exchange, the company maintains full control of its portfolio, as well as the messaging, pricing, and go-to-market plan. The sponsoring company also has its own dedicated sales force and strategy, so that the marketing plan will not get diluted, and can adapt to accommodate any changes in the market or the product owner’s goals.
Long term considerations: The company benefits from the ability to establish its own roots in the community under the tutelage of the commercial solution provider team. It can offer speed, flexibility, and risk mitigation, along with enhanced control.
About the Interviewee
Liu Qun is Head of IQVIA Biotech, China. She joined IQVIA in February, 2019 as Head of Project Leadership with responsibility for team management, client management, and global study delivery.
Liu Qun has over 19 years’ experience in the industry with prior experience in Singapore Gleneagles, Pfizer, and Novartis.
Liu Qun holds a Pharmacy Bachelor’s degree from 2nd Military University and an MBA from Tsinghua University.