China’s FDA approves AstraZeneca’s lung-cancer drug in new “fast-track” program; European drugmakers beating US to world’s biggest drug market

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The News:

AstraZeneca PLC (London) has won approval for its lung-cancer pill Tagrisso in China, a key market for the potential blockbuster medicine.

Tagrisso is designed to help cancer patients with certain genetic mutations that are very common in China and the regulatory green light boosts the British drugmaker’s prospects in a key therapy area.

Lung cancer is a vital component of AstraZeneca’s ambitious sales targets, set in 2014 in response to a takeover attempt by Pfizer, with Tagrisso forecast to contribute $3 billion. At the time, many analysts viewed the Tagrisso goal as unrealistic, Reuters notes.

Yet consensus forecasts have now risen to $2.8 billion for 2022, according to Thomson Reuters data, helped by its strong launch and the failure of some rival products. Tagrisso sales last year totaled $423 million.

China is potentially the biggest market for the drug because 30% to 40% of Asian patients with non-small cell lung cancer have epidermal growth factor receptor mutated tumors that are receptive to Tagrisso, a far higher rate than in the West.

Tagrisso is the first drug approved under the China Food and Drug Administration’s priority review pathway, which offers a fast track to market for innovative medicines.

The once-daily pill is currently used as a second-line therapy, after patients have tried older drugs like Roche’s Tarceva and AstraZeneca’s own Iressa, although a clinical trial this year could prove its benefit in first-line use.

Steve’s Take:

Ironically, along with the AstraZeneca approval for Tagrisso, China has just issued a draft rule that would speed up the approval process for pharmaceuticals, promising patients faster access to new, advanced drugs for cancer, cardiovascular and other diseases.

The China FDA is soliciting public comment on the draft through April 20, says Shanghai Daily. Of primary interest is a stipulation that foreign drugs will no longer have to win approval overseas or have undergone second-and third-phase clinical trials abroad before they can be tested in China.

Under current rules, new drugs of multinational pharma companies typically wait years to be introduced in the domestic market.

China Food and Drug Administration Director Bi Jingquan told an interviewer earlier this month that his agency is working with relevant authorities to eliminate unreasonable regulations and tackle the backlog of new drug applications.

“The Chinese market,” Bi Jingquan said, “poses great opportunities for multinational drug companies.”

Now that’s a strong public endorsement of what could be a colossal bonanza for Pharma. But where is American Pharma in this race to grab a toehold amidst the most populous country on the planet?

Nowhere, really. And I don’t understand that. I mean, do US pharma companies just not see the opportunity the Europeans are chasing with such fervor?” Or just not keeping up with global developments?” Totally puzzling.

Here are two basic factors the Euros see that we yanks apparently don’t.

  • German-based Boehringer Ingelheim GmbH said that under the current system, it generally takes five to six years to get a new drug approved in China, even after it has been given the green light overseas.

    “If the draft rule is enacted, China would keep pace with other overseas markets in terms of new drug development and launch speeds,” the statement said. “The approval time gap could be reduced to less than one year after US and EU approval.”

Okay; China’s Food and Drug Administration (CFDA) has set out to reduce the drug-approval gap from up to six years to less than 12 months. Big.

  • China is expected to overtake the US as the largest pharmaceutical market by 2020, accounting for 7.5% of global sales, according to the US-based consulting company IMS Health.

Hmmm. Biggest pharma market in the world in about three years.

“Multinational drug companies will definitely benefit from the new rules, and they could take China into account much earlier in the drug research and development process,” said Dai Jialing, founder and managing editor at online portal YanFaKe, which tracks the pharmaceutical industry.

However, speeding up the approval process is only one step in bringing China up to international standards.

“Innovative drugs still have many challenges to overcome on the home front, such as reimbursement levels and price pressures,” said Dai.

More clinical trials in China could help the nation catch up with Asian neighbors like South Korea, he added.

Tufts Center for the Study of Drug Development in Boston estimated last year that the cost of developing a new drug averages at about $2.87 billion.

“Multinational drug companies will now have more motivation to carry out clinical trials in China, where there are plenty of eligible people for testing and costs are lower,” said Zhao Bing, director and healthcare industry analyst at UBS Securities. “But at the end of the day, each company has to balance the upfront cost of new drug discoveries and development against potential sales income.”

Zhao said it could take quite a while for innovative drug sales in China to make a significant contribution to the bottom lines of multinational drug companies because new medicines are usually more expensive and may not be quickly embraced by doctors and patients as soon as they are available on the domestic market.

In addition to AstraZeneca, here are the non-US global pharmaceutical giants poised to exploit China’s pharma development push at this nascent stage.

In addition to its drug win, AstraZeneca in 2015 said it would invest $800 million in China over the following 10 years.

Swiss-based Novartis AG, which last year opened a $1 billion Shanghai research and development center that will focus on diseases prevalent in China and Asia, is calling for more collaboration between healthcare authorities and pharma companies, and for the introduction of outside experts in evaluation of new drugs. CEO Joe Jimenez told the China Development Forum in Beijing in early March that more drug innovation would be achieved through more cross-border and private-public sector collaboration.

Another Swiss colossus, Roche Holding AG received the CFDA’s approval of vemurafenib tablets for the treatment of people with unresectable or metastatic melanoma in China earlier this month. Roche said that the draft rule is a signal of the government’s positive moves to accelerate new drug approvals. “We believe this would encourage innovative drug companies to conduct clinical trials there simultaneously with the [rest of the] world,” it said.

And after China fined UK pharmaceuticals goliath GlaxoSmithKline PLC $490 million in 2014 after a court found it guilty of bribery, CEO Sir Andrew Witty said,

“Reaching a conclusion in the investigation of our Chinese business is important….We have and will continue to learn from this. We will also continue to invest directly in the country to support the government’s healthcare reform agenda and long-term plans for economic growth.”

Although, one exception is that Pfizer has moved back into China with a thumbs up for top-selling Prevenar 13.

China is dashing ahead into today’s western, tech-oriented healthcare arena, with another example of its commitment to provide its citizens the best care it can afford. It is copying the US and European system for drug approval and doesn’t dispute the similarity.

Steve's Take: With #China speeding #drug approval, why are US companies still invisible? Click To Tweet

Meanwhile, US pharmaceutical sales to China grew to just $2 billion in 2015, whereas total pharma imports to that country had reached $108 billion. That’s less than a 2% share of the entire market, according to the US Commerce Department’s International Trade Association (pdf).

So, memo to US drugmakers: you can now likely expect only about a maximum of 18 months for approval of a drug in China instead of five to six years. Why are you still essentially invisible there?