Merck's Keytruda to make its China debut as a resort-island draw for medical tourists

Merck & Co.’s cancer treatment Keytruda could become a national tourist attraction in China, with a special approval for imports to the resort island of Hainan.

Immuno-oncology stalwart Keytruda will be available at the Boao Lecheng International Medical Tourism Pilot Zone, designed to attract travelers for new treatments, according to an announcement on WeChat. Specifics on pricing and approved indications weren’t covered in the announcement, but it did say officials are considering other drugs for the program. 

The medical-tourism nod comes as BMS continues to navigate the tough approval process in China with its growing blockbuster med Opdivo--and Keytruda itself awaits regulatory approval for the rest of the country.

Established in 2013, the Hainan program will open up new treatments--including Keytruda--to affluent Chinese residents who can afford the travel and medical costs, while other patients will have to wait for regulators to approve them. In recent years, mainland Chinese patients have increasingly traveled to Hong Kong or elsewhere in the face of lagging drug approvals by the China FDA and high treatment costs.

Last year, Bloomberg profiled the issue, noting that duties and distribution costs have driven up drug prices in the world's most populous country. Many medical tourists traveled to Hong Kong's "gray market" to get treatment with top meds such as Gilead's hep C drug Sovaldi or Roche's breast cancer treatment Herceptin, often without a prescription.

In the U.S., the CDC estimates that 750,000 residents travel abroad every year for medical care, many of whom “do so because treatment is much cheaper in another country.”

Back in early 2015, when the uproar over Gilead Sciences’ hep C prices was still going strong, patients found alternatives to coverage restrictions by traveling to India for deeply discounted drugs. According to the Medical Tourism Index, the global industry is estimated to be valued at $100 billion.

For Merck, the approval marks an advance in a country where Big Pharma has faced challenges lately, largely due to government pricing pressure. AstraZeneca and Eli Lilly have each navigated the tough landscape, posting sizable Q2 gains in China. But GSK has struggled, seeing its sales there slip by 28% in Q1 and 14% in Q2.

New Jersey-based Merck is fighting tooth and nail to win indications and approvals in the immuno-oncology race with Bristol-Myers Squibb and Opdivo, as each development holds the potential for new sales. Roche also recently entered the space, winning approval for its Tecentriq.

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