The Diabetes Market in China

The dramatic changes in lifestyle and aging population have expedited the spread of diabetes in the past decade. According to statistics, there was a total of 425 million adults with diabetes worldwide last year. And the incidence rate was as high as 8.8% (from 20 to 79 years old). It is predicted that the diabetes population will further grow in the next 30 years. By 2045, it will amount to a total of 629 million globally. with around 35% in the US and 16% in Europe. China is predicted to be around 48%.

In 2017, the global diabetes market reached a total of $68.9 billion with a compound annual growth rate of 7.4%. It is predicted that this behemoth will further increase to $90.7 billion in 2022 and $137.7 billion in 2028.

China (114.4 million diabetes patients) is already ranked as number 1 in the number of diabetes patients around the world. The country’s diabetes market size is increasing rapidly year by year. It is predicted that the total market size will be close to $6.67 billion in 2022. As such, China will become a major battleground for any pharma company attempting to maintain a position in this space.

Global market analysis

At present, the competition in the diabetes market is fierce. Traditional Insulin is still the most popular drug category and accounts for about half of the market. The rest is shared among GLP-1 receptor agonists (17%), DPP-4 inhibitors (21%), and SGLT2 inhibitors (6%), which are regarded as the rising stars. The current global diabetes market is mainly divided by four giant monopolies, Novo Nordisk, Sanofi, Eli Lilly, and Merck. Combined, they account for about 72% of the market.

Novo Nordisk

Novo Nordisk is an innovative biopharmaceutical company specializing in diabetes and obesity drugs. Equipped with the most extensive diabetes product lines, its diabetes business accounted for 81% of the company’s total revenue in 2017. Among all drug types, insulin is the largest category and has contributed about 70% share, followed by GLP-1 at 26%. However, growth of its insulin products has been gradually slowing in recent years, primarily thanks to the emerging generic competitors and new types of hypoglycemic drugs on the scene.

Eli Lilly

Eli Lilly is another diabetes giant and ranked second-place last year. Its main product is recombinant insulin, currently its highest sales category in the sector. In second place is their blockbuster Trulicity, a once-a-week-injected, long-acting GLP-1 receptor agonist. In the last year, this has already become one of the main driving forces of Lilly’s growth.

Sanofi

Sanofi’s dominance in the diabetes market is largely contributed by its insulin product, Lantus. However, with the launch of a Lantus copycat from Eli Lilly, its sales began to fall rapidly. To maintain its market position, Sanofi has developed Toujeo, a new formulation of Lantus. In 2017, this drug has generated a total of $951 million.

Merck

Merck’s diabetes product line is relatively simple. Its main drivers are metformin and sitagliptin, the first DPP-4 inhibitor in the world. Since its birth, this DPP-4 inhibitor star has become a cash cow for Merck. In the third year of its listing, its annual revenue has exceeded $1 billion. But in the face of its imminent patent expiration and new GLP-1 drugs on the line, the sales of sitagliptin began to sink in 2017.

Chinese market analysis

Contrary to the global market, insulin and oral hypoglycemic agents make up majority of the Chinese diabetes market. So far, new drugs have not gained much favor. However, the situation is changing; in the wake of new target patent expiration, accelerated the approval process for imported drugs, the entry of generic providers, and the medical insurance reform, a new wave of diabetes medications has begun to emerge and will change the market structure in China.

In 2017, the Chinese Ministry of Human Resources and Social Security published its newest version of the “National Basic Medical Insurance, Industrial Injury Insurance, and Maternity Insurance Drug List”. On the heels of this, they released a notice to include 36 kinds of medicines into the drug list. This will greatly impact the structure of diabetes market in China, as this move instigated national insurance coverage of a series of new agents.

Overall, the main changes are the following.

1.     DPP-4 inhibitors are included in the new drug list. However, they are limited to second-line drugs.

2.     Gliclazide II and Miglitol are added into the list.

3.     With a negotiated price at $62 (3 ml: 18 mg per unit, prefilled pen), Liraglutide, a GLP-1 receptor agonist, is included in the category B of the new drug list.

Overseas pharma companies are still dominating the Chinese diabetes market. Last year, the top five performers were Novo Nordisk, Sanofi, Bayer, BMS, and Eli Lilly. Among them, Novo Nordisk took over 25% of the market share in total.

The competitiveness of China’s domestic pharmas is relatively weak. So far, no self-developed, Chinese generic drug has been approved. Things are about to change, however. A slew of domestic diabetes products is slated to finish their reviews by the end of 2018, including metformin hydrochloride tablets, acarbose tablets and capsules, glibenclamide tablets, glipizide tablets and capsules, and glimepiride tablets.

A number of Chinese hypoglycemic agents have already received priority review, including glibenclamide tablets from Pharmadax and metformin hydrochloride tablets and sustained-release tablets from CSPC. Both ohave been accepted by FDA.

DPP-4

Hengrui Medicine has been leading the race DPP-4 race in China. Equipped with one Phase 3 and several Phase I clinical trials, its Retagliptin has a clear leg-up on its competitors and is expected to become the first approved self-developed DPP-4 inhibitor in China 2018. Following is CSPC; its DBPR108 is currently undergoing a Phase II clinical trial. In the third tier are Luye Pharma, Xuanzhu Pharma, and Salubris Pharmaceuticals, all three carrying out Phase I studies.

What does the future hold for these new DPP-4 inhibitors in China?

At present, the Chinese DPP-4 market has been divided by imported original drugs. Its domestic pharma companies are still in the process of seeking breakthroughs. Furthermore, major international pharmaceutical companies have already moved onto a product upgrade. Many of them are actively developing long-acting and even ultra-long-acting forms of DPP-4 inhibitors. The gap between Chinese providers and its global counterparts is thus very clear.

To win out the competition, China’s domestic DPP-4 developers need to spend more efforts on efficacy and price. In the case of bioequivalent or even bio-better, if their drugs can be included the National Medical Insurance List through cost advantages, there are still opportunities for Chinese pharmas to bring home the bacon.

Major Chinese pharmas developing DPP-4 inhibitors

Company name

Product name

Status

Hengrui Medicine

Retagliptin

Phase III and phase I

CSPC

DBPR108

Phase II

Luye Pharma

Tartaric acid vildagliptin

phase I

Xuanzhu Pharma

KBP-3853

phase I

Eston Biopharmaceuticals

Eucliptin

phase I

Salubris Pharmaceuticals

Fotagliptin benzoate

phase I

GLP-1

Due to the great potential of GLP-1 agonist to reduce blood sugar, a number of Chinese pharmaceutical companies have pegged big hopes on this business. Among them, Hansoh Pharma is the rising star. On  December 6, 2017, it submitted the listing application of its PEG-loxenatide, co-developed with Shanghai Hansen, to the Chinese Drug Evaluation, marking the first Chinese self-developed long-acting GLP-1 to apply for a listing in China. If everything goes well, it is expected to make its way into the market by Q4 2018.

Other notable mentions in the GLP-1 sector include Baolijian, Gmax Biopharm, and CS Bio. The competition in this field is set to become more intense in the future.

Major Chinese pharmas developing GLP-1 agonists

Company name

Product name

Status

Baolijian

Recombinant GLP-1

Phase III 

Gmax Biopharm

GMA102/105

Phase II

CS Bio

Albenatide

Phase I

Hansoh Pharma

Noiiglutide

Phase I

Betta Pharmaceuticals

BPI-3016

Phase I

Eastern Biotech

Exemdom-4Fc fusion protein

Phase I

Hansoh Pharma

PEG-loxenatide

NDA application

Insulin

The major domestic players in the Chinese insulin sector are Dongbro Pharmaceutical, Chongqing Fujin Biology Medical Company, Gan & Lee Pharmaceuticals, The United Laboratories, Hisun Pharma, Chiatai Tianqing, Yichang HEC Changjing Pharmaceutical, Wanbang Medical Company, and HTBT. Chongqing Fujin and Hisun Pharma lead the pack, with Phase III clinical trials ongoing. Gan & Lee Pharmaceuticals, Wanbang, and The United Laboratories follow and are currently conducting bioequivalent tests.

In terms of the product category, the majority of Chinese companies focus on human insulin and its long-acting formulation. However, some have already moved into the research and development of insulin lispro, insulin glargine, insulin aspart, and a variety of premixed dosage forms. Gradually, an increasing number of Chinese pharmas are shouldering their way into the fierce diabetes contest. In the future, to maintain a sizable share in the Chinese market, it will be not only necessary to ensure the product quality, but also very important to deeply understand its market needs.

Major Chinese pharmas developing insulin 

Company name

Product name

Status

Chongqing Fujin Biology Medical Company

PEG-Det

Phase III

Hisun Pharma

insulin glargine (HS004)

Phase III

Hisun Pharma

Insulin aspart (HS005)

Phase III

Hisun Pharma

Recombinant human insulin

Phase I

SGLT-2

SGLT-2 is the rising star in the global diabetes market and a number of international pharmaceutical companies are stepping up their effort in this area. But only a few Chinese pharma has dipped their toes into this pond. Among them, Hengrui has taken the lead position and initiated a Phase III trial on its self-developed SGLT-2 in June last year. In the second tier are Xuanzhu Pharma and HEC pharm, currently conducting Phase I studies.

In terms of SGLT-2 combination therapies, Luoxin Pharmaceutical is leading the race.

Major Chinese pharmas developing SGLT-2 inhibitors 

Company name

Product name

Status

Hengrui Medicine

Henagliflozin

Phase III

Xuanzhu Pharma

SGLT-2 inhibitor

Phase I

HEC Pharm

HEC-44616

Phase I

Luoxin Pharmaceutical

Empagliflozin

Preclinical

Hansoh Pharma

Canagliflozin

Preclinical

Questions for the future

For any drug to succeed in the Chinese market, entering the National Medical Insurance list is undoubtedly a very important step. It will stimulate the market need and at the same time put these drugs in the top spot to compete and increase market share.

In the coming years, the main questions concerning the Chinese diabetes market will be:

1.     Can new entries in the National Basic Medical Insurance List can achieve a high-speed growth? 

2.     Which diabetes products can be approved with the consistency assessment?

3.     Can these newly approved drugs can break the current dominance of expired originals?

4.     How quickly can these newly approved diabetes medications join the National Basic Medical Insurance List?

Jin Zhang M.D., Ph.D is project and account manager at LakePharma, and editor at The Pharmaceutical Consultant.