Merck, Bristol Myers, AstraZeneca and Roche lose bid to expand PD-1/L1 reach in China

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Multinational pharma companies Merck, Bristol Myers Squibb, AstraZeneca and Roche all failed to win deals for their PD-1/L1 inhibitors in China’s latest national drug reimbursement negotiations as local players slashed their products' prices by about 80% to secure national coverage. (Getty Images)

For existing PD-1/L1 inhibitors, China represents an opportunity for new growth. But foreign drugmakers have once again lost their chance to reach a wider pool of patients in the country as local players make inroads by offering steep discounts.

Merck’s Keytruda, Bristol Myers Squibb’s Opdivo, AstraZeneca’s Imfinzi and Roche’s Tecentriq all failed to cut deals in China’s latest National Reimbursement Drug List (NRDL) negotiations, according to new listing results published (Chinese) Monday.

By contrast, with three new successful entries, all four marketed, domestically made PD-1 therapies have won national coverage, though not without making great concessions over pricing at levels that simply look almost unfeasible for their foreign counterparts.

BeiGene’s tislelizumab, Jiangsu Hengrui Medicine’s camrelizumab and Junshi Biosciences’ toripalimab have slashed their prices by roughly 80% to win their places on China’s NRDL, Xianjun Xiong, an official at the National Healthcare Security Administration (NHSA), told reporters, according to local media reports.

That discount was even bigger than the 64% price cut Innovent Biologics and partner Eli Lilly offered up for their PD-1 agent Tyvyt (sintilimab) during last year’s negotiation with the government. The other marketed products by Merck, Bristol and Junshi couldn’t reach agreements in that round.

Back then, SVB Leerink analysts warned of potentially more generous discounts to come given Tyvyt’s price cut was meant for a very small indication of third- or later-line relapsed/refractory classical Hodgkin lymphoma.

RELATED: China gives Merck, BMS cold shoulder on reimbursement list as PD-1 battle enters new phase

This time, the three new China-made PD-1s have all their approved indications included for coverage. These include first-line treatment of non-squamous, non-small cell lung cancer for Hengrui’s camrelizumab, an indication that was just added to the drug’s label in June.

An 80% discount may simply be too much to ask from a foreign PD-1/L1, especially considering Keytruda and Opdivo were already launched in China at half the price they were in the U.S. But the two world-leading PD-1 drugmakers are adjusting their policies to cope with the new NRDL—or their lack of inclusion on it.

Merck has tweaked (Chinese) its Keytruda patient assistance program, which now gives out Keytruda free of charge after six cycles of treatment—including two free rounds in the middle—until patients reach a maximum two years on therapy or their disease worsens. Previously, the scheme offered three free cycles after two paid cycles in rotation after an initial four cycles.

BMS, meanwhile, sweetened (Chinese) its Opdivo program shortly after the NRDL negotiations and before the result announcement. It now caps payments at six cycles for each year of treatment. That move reduced Opdivo’s annual cost for a patient weighing 60 kg (132 lbs) to CNY 110,652 ($16,940), about half its original price.

Because checkpoint inhibitors are expensive, most Chinese patients are eligible for financial support.

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China’s NRDL negotiations have historically involved big price cuts—and this year was no exception. Together, 119 drugs were successfully enlisted after an average 50.63% price cut, according to the NHSA (Chinese).

In exchange for price erosion, drugmakers could enjoy larger sales volume thanks to wider patient access. Cancer drugs have in the past benefited from this arrangement. Oncology product sales rose to a median 2.16 times their pre-NRDL levels after four quarters, or 2.88 times after seven quarters, BeiGene management said during a conference call, as cited by SVB Leerink analysts in a Tuesday note.

Innovent’s Tyvyt, for example, registered sales of CNY 921 million ($141 million) in the first half of 2020—up 178% year over year—driven by its inclusion on the NRDL. The drug was first approved in December 2018.

Despite hitting the market after their foreign rivals, domestic PD-1 players have gobbled up about two-thirds of China’s PD-1 market as of the third quarter, BeiGene management said on the call.

“The company believes that China PD-1 sales will continue to grow from its current ~$2bn run rate despite limited reimbursement due to the volume of patients and low current penetration rate, which could increase over time,” the SVB Leerink team wrote in their note.

Besides tislelizumab, BeiGene also won coverage for its BTK inhibitor Brukinsa and Amgen-licensed Xgeva, which the Chinese biotech just launched in late June.

Other notable inclusions in this NRDL round include AstraZeneca’s Tagrisso for first-line EGFR-mutated lung cancer treatment on top of its existing later-line coverage. Novartis has IL-17A inhibitor Cosentyx, multiple sclerosis meds Gilenya and Mayzent, and BRAF-MEK combo Tafinlar and Mekinist included, among others. Sanofi’s Dupixent, Eli Lilly’s GLP-1 diabetes med Trulicity, Takeda’s inflammatory bowel disease blockbuster Entyvio and Zai Lab's GlaxoSmithKline-partnered PARP inhibitor Zejula were also among the winners.

The new list will take effect next March and will last until the end of 2022.