Hong Kong drugstores attract Chinese customers for cancer, hep C drugs

In the latest twist of cross-border healthcare buying, many shoebox-sized drugstores in Hong Kong are magnets for mainland Chinese seeking access to cutting-edge oncology and hepatitis C treatments without a prescription because they are either highly expensive or not available at home, Bloomberg reports.

Companies such as Abbott Laboratories ($ABT) benefited from such trade for dairy-based nutrition products, particularly infant formula after a 2008 incident in which the toxic chemical melamine was mixed with infant formula in domestic supplies, killing several children and poisoning hundreds of thousands.

But the twist this time is that prescription drugs that are in high demand in China are linked directly to massive unmet medical needs in cancer and hepatitis C that combine with a regulatory approval process for new drugs that lags by years on newer therapies--even as efforts are underway to fix the problem.

Bloomberg said that Hong Kong's Nathan Road is ground zero for mainland Chinese to buy drugs such as Roche's ($RHBBY) breast cancer treatment Herceptin or hepatitis C therapy Sovaldi from Gilead Sciences ($GILD) without a prescription.

Prices for Herceptin, Bloomberg said in one example, clocked in at HK$20,000 ($2,580) for a 440-milligram vial, which the news agency said is 30% less than those found in areas of China away from big medical centers.

Roche spokeswoman Nina Schwab-Hautzinger told Bloomberg that it monitors market sales and would alert authorities to any "unusual activity."

In August, Gilead said it was in talks with China on pricing for Sovaldi as the country stands outside of an access program by the U.S. drugmaker that relies heavily on manufacturing and sales licensing to mostly India-based companies. The discussions are also held against a backdrop of China seeking to expand insurance access for serious illness coverage. The drug is not yet approved in China.

"We are in discussions with the Chinese authorities regarding access to Sovaldi, yes," Gilead spokesman Nick Francis said in an August email to FiercePharmaAsia. "But [we] cannot comment further than that though."

Gilead separately told Bloomberg that Sovaldi has been sold by prescription in Hong Kong since July.

Earlier this year, Gilead negotiated to expand market access for the drug, priced at around $1,000 per pill, or $84,000 for a 12-week course, in the U.S. The company also agreed to slash the cost to $300 a bottle, or roughly $10 per pill, through manufacturing and sales licenses that would cover India and many emerging markets at similar costs.

However, as reports note, the hepatitis C drug selling in the United States for $1,000 per pill is now found for just $10 a pill in places like Bangladesh or in Kathmandu, Nepal, where you can get a licensed copy at a rate that is also a fraction of the U.S. cost.

In medical hubs such as Singapore, clinicians regularly find that matching patient ability to pay with the right drug and an openness to understand the dynamics of a "Dallas Buyers Club" approach to use is imperative, according to James Yip, a senior consultant and medical clinician who manages patients with pulmonary hypertension at the National University Heart Centre in Singapore.

In a February interview with FiercePharmaAsia, Yip noted conditions such as pulmonary hypertension, treatable by orphan therapies such as Tracleer by Actelion Pharmaceuticals ($ATLN) and/or Bayer's novel drug Adempas for both inoperable chronic-thromboembolic pulmonary hypertension, and pulmonary arterial hypertension. Or the generic forms of Pfizer's ($PFE) Viagra or Eli Lilly's ($LLY) Cialis, which are often out of reach in many Asian countries.

In the case of China, Bloomberg said, 3 million new cases of cancer annually and more than 40 million cases of hepatitis C drive demand. China is moving to expand reimbursement coverage for chronic diseases and in July approved the rollout of medical insurance on serious illness nationwide, a factor in the number of smaller oncology biotechs eyeing the market from China-based BeiGene to Hutchison MediPharma.

But the flock to Hong Kong continues, often driven by quality concerns, Bloomberg said, citing William Chui, president of the Society of Hospital Pharmacists of Hong Kong, who estimated that 90% of cancer drug sales at pharmacies are to mainland tourists.

Hong Kong's Department of Health said in an email to Bloomberg that it regularly inspects drugstore documents on prescription sales and has convicted scores from 2011 to 2014 for illegal sales.

- here's the story from Bloomberg