The rare disease market in China can be summed up in three words: Exciting, Challenging and Rapidly Evolving. As such, it’s a fairly complicated space that requires a careful and strategic approach. In this article, Simon-Kucher experts discuss how best to navigate this landscape to take advantage of the many opportunities available.
Rare diseases in China benefit from encouraging policies and infrastructure improvements
Rare disease policies in China have become increasingly progressive and supportive. Specific measures have been taken to encourage research and development, speed up approvals, improve diagnostic and treatment standards, and import and reimbursement.
In fact, based on the implementation plan of China’s drug regulatory law, newly released in May 2022, top-of-the-line therapies for rare diseases are expected to enjoy a seven-year market exclusivity – in line with the US.
At the same time, the infrastructure for the care of rare diseases has improved rapidly over the past five years. There is now a collaborative network of 324 leading rare disease-focused hospitals, with Peking Union Medical College Hospital as the leading national flagship and 32 provincial hospitals as regional centers.
The network is also the driving force behind the National Rare Diseases Registry System, which now covers around 200 cohorts with 70,000 patients across China. This is no small feat, but given the official estimate of the number of rare disease patients in China – over 20 million – there is still a long way to go.
Despite this, therapies for rare diseases still face several hurdles
In stark contrast to the uptake curve for innovative therapies in many markets, a typical trajectory in China shows much slower initial uptake. In addition, it is hampered by speed restrictions such as provincial-level tenders, hospital formula listings, prescription restrictions, and affordability issues.
For therapies for rare diseases, uptake is further limited by gaps in disease awareness, diagnosis and treatment competency. Not to mention the dispersed patient population and typically high prices, further limiting access to patients in need.
To address these challenges, some have investigated public reimbursement such as the National Reimbursement Drug List (NRDL), but are often alarmed at the extent of price concessions in some precedents. Others have looked to commercial payers and out-of-pocket options while intimidated by the complexity and operational challenges.
Innovative therapies can benefit from China’s market access
Indeed, China’s access environment is dynamic, with a wide range of new levers emerging for rare disease therapies to accelerate access and improve affordability.
There are increasing opportunities to explore early access via Hainan, the Great Bay Area, as well as special development zones such as Shanghai and Shenzhen. These provide on-site clinical applications prior to formal regulatory approval.
More importantly, Real World Evidence (RWE) gathered during the early access programs will help expedite eventual approval. In fact, some innovative therapies have gone through this process and been successful — like pralsetinib and Yutiq.
Specifically, Yutiq received approval from the National Medical Products Administration in June 2022 for the treatment of non-infectious posterior uveitis, with its data from China based solely on a real-world study conducted in Hainan.
In addition, the NRDL for therapies for rare diseases will become more comprehensive. Seven innovative therapies such as Replagal, Firazyr, Spinraza, Ampyra and Vyndamax have been included in the NRDL 2021. In addition, the creation of a separate category for rare diseases in the NRDL 2022 is an encouraging sign. 19 rare disease therapies passed this year’s formal review and made the long list.
A number of affordability levers have emerged alongside NRDL coverage. These include commercial health insurance (CHI), innovative financing solutions, as well as charities, rare disease funds, patient assistance programs, crowdfunding platforms and rebate programs. Most notable among them is the city of CHI, which has grown from a handful of cities to around 200. It currently serves 100 million people, with rare diseases being a key focus for many forms.
High-priced therapies like Replagal, Spinraza, Cerezyme, and Myozyme have all taken advantage of different combinations of levers for a number of reasons. Either as a stepping stone to NRDL inclusion, or as a standalone access strategy independent of NRDL, or even as a mix of both at different stages of their life cycle.
However, it is important to note that every lever has its sweet spot and limitations. NRDL listing typically comes with significant price reductions, city CHIs grant only fragmented access, and provincial-level rare disease funds have been cut while national ones have yet to be announced. This reflects the dynamic developments in China in this area.
In this context, there are three crucial steps for a successful China strategy:
- Adopt a patient-centric mindset: A deep understanding of the unmet needs of patients in China is critical to success. These insights also help identify the best entry levers and provide important input into study design and development decisions for China from the start.
- Systematically map different access and affordability levers: Some levers and options may not be appropriate for all ailments and assets and may become distractions rather than solutions. Others may be better suited but will take time and effort to gain a foothold. Therefore, a systematic mapping of different levers would help to assess the desirability and suitability of each one and to prioritize and sequence them in a coherent and synergistic way.
- Use a forward-looking lens: China’s rare disease market is constantly changing. While this makes it an exciting field to work in, it requires forward-thinking. The successful launch of such a lens offers opportunities to transform lives, generate growth and shape the evolving market.
About the authors:
Bruce Liu leads Simon-Kucher’s Life Sciences practice in Greater China; Ivy Jiang is a senior advisor focused on China’s commercialization strategy for rare diseases and innovative therapies; Selene Peng and Duo Xu are consultants with extensive experience in market entry and growth strategy in China.