Perhaps Chinese biotech’s biggest success story, cancer-focused Beigene has evolved from the commitment of founders John Oyler and Xiaodong Wang to conducting clinical research in China with a global outlook. Fresh from recent announcements of an IPO in Shanghai to add to listings on NASDAQ and in Hong Kong and a new manufacturing campus and clinical R&D facility in New Jersey, Oyler outlined to the FT’s Global Pharmaceutical & Biotechnology Conference some of the key trends shaping pharma in China today and the country’s role within the global health ecosystem.
A Refreshed Policy Landscape
Oyler noted that change to Chinese policy and regulation has been rapid in the past ten years and that the Chinese authorities are now committed “to promoting innovation and joining the global system.” For example, limitations of clinical trials have been lifted, the country’s regulator is more aligned with its international counterparts since joining the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), and reimbursement for innovative medicines is now available across the country.
Moreover, as a net exporter of intellectual property (IP) today, the patent protection landscape in China is much stronger than in the past. “It is in [China’s] best interests to tighten regulations and be in the camp with other similar countries [on IP], said Oyler.
Why Clinical Trials in China Make Sense
Historically, most clinical trials have been conducted in the wealthiest one sixth of the world, utilising the best hospitals. However, as Oyler pointed out, this has led to a lack of patients suitable and willing to join much-needed studies, meaning that it takes a long time (up to two to three years) to put together trial cohorts, creating delays and high expenses. Over three quarters of the cost of developing a medicine is accounted for by clinical trials.
China, unfortunately, has a very high incidence of cancer, accounting for a full 25 percent of the global total. While this is troubling, it does mean that there is no shortage of potential trial participants in the country and makes China a fertile ground for clinical research.
Pricing Pains (Or Lack Thereof)
While this enormous cancer patient population in China does represent a huge opportunity for global pharma now that innovative medicines are being reimbursed there, some have raised concerns that the country’s relatively low prices (compared to the US) offer insufficient reward for the innovations being brought.
Oyler was keen to counter this narrative, noting that, on an ethical level, “it is not OK to only get great medicines to one sixth of the world.” However, his argument also had an economic footing. Oyler stated that even though pricing at US levels would not be feasible in China, pricing even at one sixth of the level seen in the US would still bring in tens of billions of dollars and contribute significantly to ameliorating the high upfront costs of drug development.
Looking forward, Oyler predicts that such a model could also be rolled out to the rest of the developing world while maintaining a balance between profitability and affordability.
Taking Chinese Innovation Global: The Evolving Partnership Model
For Oyler, China joining the global drug discovery and development landscape as a “dynamic participant” is “a net positive for the entire industry” that will accelerate the speed and reduce the costs of bringing medicines to patients.
International collaboration will be key to continuing this story. Oyler feels that many more good biotech companies will spring out of China that will be “an important contributor to some of the great innovation that happens in the world,” but that almost all firms will need global partners. Even Beigene, one of China’s biggest innovators, had to partner up with Novartis to take its products into the US. “Cancer is formidable and to fight it and bring a good medicine to market we really have to work together,” adds Oyler.
However, questions around how to structure deals in order to avoid conflicts of interest will persist, including which partner funds the clinical trials (especially for geographically-specific disease types) and which markets to introduce products to (given reference pricing concerns). Oyler foresees both successes and failures along the way but proclaims that “The worst thing for the world is a great medicine that’s stuck in a collaboration with partners that can’t work well together and it never makes it to a patient.”
Remaining Barriers to Business in China
Pressed on what the remaining issues to doing business in China are, Oyler countered that there are issues that need to be addressed in every country, not just China. He does however feel that there is room for improvement in data exclusivity when running clinical trials to assess safety and efficiency after the patent life is over. This issue was on the table during talks between the US and China in 2018, but when the trade row ensued, no change was enacted. Oyler feels that this issue is crucial for the industry to be able to finish their trials, important for Chinese patient receiving these medicines, and significant in terms of future investments.
He also adds that while the country’s regulations around genetics are evolving in a positive direction, the Human Genetic Resources Administration of China (HGRAC) is still working on creating an optimal system and thereby slowing down the work of both domestic and global companies.