China’s economic success over the last three decades has brought the country’s 1.4 billion people unprecedented prosperity. However, success has come at great cost. Due to changes in diet, transition to less physically demanding jobs, excessive smoking and other lifestyle issues, 11.3 percent—some 114 million—of Chinese adults have diabetes. Twenty-five years ago, that number was less than one percent.
China’s diabetes epidemic shows no signs of abating. Researchers with the International Diabetes Federation (IDF) project there are another 493.4 million Chinese with pre-diabetes. According to some experts, India and China will have an increase of an additional 48.5 million people with diabetes between 2007 and 2025.
This public health problem also creates a heavy economic burden for China; health costs for people with diabetes are dramatically higher than those without diabetes. The IDF reports 13 percent of medical expenditures in China are directly caused by diabetes, with an estimated annual cost of US$25 billion. These costs will only continue to rise.
One person’s epidemic is another’s opportunity. Analysts project the global insulin market to reach $47 billion in 2016, up from $20 billion in 2013 again. China is a major driver of this incredible growth surge. Diabetes medications are China’s largest drug sector. Three multinational pharmaceutical companies (MNCs) supply insulin to China—Lilly, Novo Nordisk and Sanofi—largely from in-country manufacturing facilities and account for 70 percent of the value of the overall market. The three companies are eager to maintain their leadership positions in China. Recent news should keep things interesting:
- Sanofi, the largest MNC in China, global diabetes portfolio includes multiple products not yet introduced into the Chinese market but could offer line extension to its leading insulin Lantus® brand.
- Novo Nordisk, continues to expand its global insulin franchise with new blockbusters. It’s new GLP-1 drug Victoza® generated $2.7 billion in revenue in 2015. The company added another $9.4 billion in sales in 2015 with success from other insulin product.
- Novo just received FDA approval of IDegLira®, a once-daily, single-injection, fixed-dose combination of Tresiba® and Victoza designed to improve efficacy at lower doses.
- Sanofi has its own GLP-1 combination therapy, iGlarLixi®, which thus far has secured an FDA recommendation.
- Lilly and Boehringer are also in the mix with a follow-on biologic, Basaglar®.
While China’s insulin market has seen significant growth for MNCs, the country’s push to reform its healthcare system, reduce and control pharmaceutical costs, and promote drugs developed and manufactured in China means that MNCs cannot rely on their historical status quo. Indeed, the policy changes of the last nine months designed to place China among the global elite of drug development and promote the use of in-country contract manufacturing organizations (CMOs) through a marketing authorization holder (MAH) pilot program are sure to create openings for drug companies both foreign and domestic.
China’s policy changes also create opportunities for PaizaBio, among the only CMOs in China capable of providing fill-and-finish services to Western quality standards. We are well positioned to help strategic partners establish or strengthen their footholds in China’s growing insulin market.