Not So Different: The Race to the Top: Does China Have What It Takes?

February 7, 2021

China’s regulatory reforms and policy enhancements bode well for a thriving biosimilars industry.

The biosimilar market in China has some similarities to the one in the United States. Both countries approved their first biosimilar years after the European Union, have growth that has eclipsed the growth of their respective generic markets, and are actively working make lower cost drugs available. Still, there are some major differences.

First, to get a biosimilar developed and approved takes much longer in the US than in China. According to Huiya Wu, JD, an intellectual property law attorney from Goodwin Procter in New York, biosimilar development alone takes around 7 to 8 years in the US but could take as little as 5 years in China. Costs are vastly different as well. In the US, development can cost between $75 million and $250 million but in China, biosimilar development could cost closer to just $50 million.

Another interesting characteristic of China’s market is the emphasis on small biopharmaceutical companies. For the most part, well-established Big Pharma companies and large international companies, like Celltrion, dominate the US biosimilar market, but are mostly absent in China’s.

This trait also relates to the issue of patent disputes, one of the biggest barriers to biosimilars in the US, where large, prosperous pharmaceutical companies will battle smaller developers in court to prevent competitive biosimilar products from entering the market.

Luckily for China, their intellectual property laws were developed in a way that would actually allow earlier entry of biosimilars. For instance, China had its first adalimumab biosimilar, which was developed by China-based company Bio-Thera Solutions, launch in 2020. Meanwhile in the US, the reference manufacturer, AbbVie, has been able to take advantage of US patent laws to stall adalimumab biosimilar competition there until 2023.

Biosimilar growth in China is projected to greatly eclipse that of the reference drugs at a much faster rate than in the US, largely due to there being greater acceptance of nonreference products, another barrier for the US market. To see just how comfortable China is with nonoriginator products, let’s consider how many biologics they have. The country’s market has amassed 382 biologic drugs and vaccines, but only 21 are originator products.

Currently the US is ahead of China, with 29 biosimilar approvals vs China’s 9, and a biosimilars market worth $737 million vs China’s $354 million, according to Wu. The US market is even expected to stay ahead of China’s through at least 2027. However, there are signs that China has the regulatory infrastructure needed to not only catch up to the US, but surpass it. Already, the country’s biosimilars market is growing at a 25% compound annual growth rate.

One policy China has adopted is that of expanding access to reimbursement by adding many biologics to the national reimbursed drug list in 2017. China also developed a priority review process for drugs, similar to the one in the US, in 2016, helping to greatly shorten application review times.

Both countries are roughly on par when it comes to interchangeability of biosimilars In the US, interchangeability allows pharmacists to give patients a biosimilar instead of a reference product without needing permission from a physician, but at present, there are no interchangeable biosimilars in the US, making it more difficult for patients to have access to biosimilar cost savings. In China there is no interchangeable designation for biosimilars, and biosimilars cannot be automatically substituted for reference products.

Although China still has a long way to go to achieve the size of the US biosimilar market, there is definitely potential for China to expand its biosimilar industry. The country’s culture and regulatory system seem to be able to really drive uptake and approvals going forward. The questions that remain are how big a share of the Chinese biosimilar market will outside companies get, and what role will Chinese biosimilar producers play on the global market?

You can read more about China’s market by clicking here or here.

For information on Bio-Thera Solutions, click here.

For information on Shanghai Henlius Biotech, click here.