Pfizer inaugurates pay-for-performance in China with money-back Ibrance deal

Lately, every day seems to bring new talk about "innovative" payment models for expensive drugs in the U.S. and Europe. Now, China's getting enthused, too.

Pfizer has launched the country’s first pay-for-performance program in oncology with its blockbuster breast cancer drug Ibrance, China Daily reported. Under the new program, called Bo’ai Xin’an, Pfizer promises reimbursement of up to 33.5% of Ibrance costs if an enrolled patient’s disease progresses within four months.

The U.S. pharma set up the project in a collaboration with one of China’s largest commercial insurers, People’s Insurance Company of China (PICC) and MediTrust Health, a Shanghai-based firm that offers healthcare financing services.

It’s a small, if groundbreaking, program. It will accept no more than 500 patients, and only those who haven't received hormone therapy are eligible. Patients must also join the program within 28 days of starting Ibrance, Biocentury reported. China runs a national healthcare scheme, and private insurance plans have only interested a few.

Last July, Ibrance became the first CDK4/6 inhibitor approved in China as a first-line endocrine therapy for HR-positive and HER2-negative breast cancer. Breast cancer is the most prevalent cancer type among Chinese women, accounting for about 15% of all new cancers in women, or about 270,000 cases in 2015, according to a government-run study.

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When Ibrance landed in China—its 87th country—the Pfizer shining star had already taken off in the U.S and Europe. Last year, Ibrance racked up $4.12 billion in global sales, a 32% jump over 2017, Pfizer reported Tuesday. That makes it the third-largest product in Pfizer’s portfolio, next to pneumococcal vaccine Prevnar 13 and pain drug Lyrica.

China has a special place in Pfizer’s strategy, as the U.S. pharma has been leading the multinational pharma pack in terms of annual Chinese sales. That's now largely because of the company's huge portfolio of legacy brands, but their performance has been so strong that new CEO Albert Bourla has said he will move some top managers in the company's established medicines business to the country.

During a lunch with analysts late last year, Bourla talked up the opportunity for Pfizer in China several times “given volumes that are growing ‘exponentially’ and with that market now Pfizer's second-largest behind the U.S.,” Credit Suisse analyst Vamil Divan wrote in an investor note in December.

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China is now the second-largest pharmaceutical market overall and will probably grow more important as drug reforms continue. Its medicine spending will reach up to $170 billion by 2023, from 2018’s $137 billion, according to an IQVIA report released Tuesday.

But as access to medicines in general and new medicines in particular expands, the Chinese government is starting to feel the pressure from increased spending. Beijing has begun to crack down on drug prices, especially in the essential drug category, trying to make way for innovative drugs as a new, more streamlined review process ushers those new products to market faster.

And that's one reason why multinational pharma companies like Pfizer are turning more focus toward new drugs in the country. For example, in a new bulk purchase scheme China’s piloting, off-patent drugmakers offered steep discounts to win big tenders from major Chinese cities. As a result, foreign pharmas’ original drugs, Pfizer’s Lipitor included, were mostly defeated by local firms’ cheap copycats.