Big pharma companies’ are losing out on their off-patent drugs as generics makers offer discounts to win large tender offers in China, elbowing out original developers.
In China’s latest volume-based procurement (VBP), more than 200 companies making 60 off-patent drugs significantly reduced their prices by an average 48% to win supply contracts with public hospitals, according to state-run People’s Daily.
Some of the originators that are walking away empty handed include:
- Eisai’s liver cancer drug Lenvima
- AstraZeneca’s beta blocker Seloken/Toprol XL
- Pfizer’s kidney cancer drug Sutent
- Boehringer Ingelheim’s second-generation EGFR lung cancer med Giotrif
- Roche’s first-generation EGFR inhibitor Tarceva and flu drug Tamiflu
- Gilead Sciences’ antiviral Vemlidy (TAF)
- Novartis’ antiemetic Zofran and hormone therapy Sandostatin
Lenvima generics won tenders by lowering the drug’s average per-pill price from 108 Chinese yuan ($16.1) to 18 Chinese yuan ($2.7), according to People’s Daily. That means about 8,100 yuan in savings per treatment cycle.
Based on 2021 sales numbers, drugs included in the latest VBP scheme cover a market of over 30 billion yuan ($4.5 billion) via public hospital channels.
The fiercest competition came for AstraZeneca’s old proton-pump inhibitor omeprazole, which is available in the U.S. over the counter. Altogether 27 companies participated in the bidding.
In the end, only four originators got in with an average discount of 67%:
- Pfizer’s antibiotic Tygacil
- Astellas’ antifungal Mycamine
- Almirall’s antibiotic Kestine
- Italian firm Bracco Imaging’s imaging agent Isovue
Reports indicate that the contracts could save China 18.5 billion yuan ($2.75 billion) a year.
AstraZeneca, the largest multinational pharma company in China by sales, has recently started to see Chinese revenue decline no thanks to these tough biddings. And the current Seloken/Toprol XL loss in VBP will dent AZ’s China performance again. Last year, nearly 98% of the heart drug’s $951 million sales came from emerging markets.
AZ has warned its China revenues will decline mid-single-digit percentage in 2022 after years of double-digit increases. The gloomy outlook also comes as AZ is busy expanding its innovative drugs like third-generation EGFR lung cancer med Tagrisso after offering big discounts to win national reimbursement.