Invitation: Join PharmAsia News' Twitter Chat On China Pharma Issues

Over the last month China pharma issues have been on the front page as the government has launched a wide-ranging probe focused on compliance. The probe comes at a time when many players are already re-assessing business models in China to find new avenues for growth.

Opportunities still abound in China given huge unmet medical needs, demographic changes (e.g., an aging population, adoption of Western lifestyles), and China's health care reforms, which have extended basic medical insurance to virtually all of the country’s 1.3 billion citizens.

But challenges abound too. Sustaining growth will require new models and flexibility: smaller cities are now growing faster than Tier I cities; off-patent medications are under more severe pricing pressure, threatening the traditional business model of multinationals; and compliance has taken center stage.

While support for biopharma innovation is a major government goal, so is curbing health care costs. How can pharma companies collaborate and thrive in this environment?

To take a closer look, PharmAsia News' Twitter site, @PharmAsiaNews, will host a half-hour Twitter chat (hash tag #PAS13) Sept. 19 (3-3:30 pm EST) to discuss hot topics related to the China pharmaceutical industry. The chat will include special industry guests and PharmAsia News editors, and is sponsored by the PharmAsia Summit.

We invite you to join the discussion, ask a question, or just tune in and watch the chat live. It’s a great way to learn the latest on China pharma without leaving your laptop, tablet or smart phone.

For more information, please see below, or contact our editor Joshua Berlin via email or Twitter . We hope to see you there!

• Who: The chat is hosted by @PharmAsiaNews and includes China industry consultants @GeorgeBaeder and @DebraYuPharma , and PharmAsia News editors @TamraPharmAsia and @BioPharmaJosh.

• What: A half-hour Twitter chat to discuss the latest hot topics in the China pharma industry.

• When: Thursday, Sept. 19, 3-3:30 pm EST (for those who can’t attend the chat live, we will provide a link to the discussion at a later date). Go to @PharmAsiaNews at 3 pm to tune in or participate.

• Where: The chat is hosted on the Twitter page of @PharmAsiaNews. To follow the chat, join the discussion or ask a question, go to @PharmAsiaNews or follow hashtag #PAS13.

• Why: China represents the fastest-growing large pharma market, but new models are needed to succeed in a rapidly changing environment. Our Twitter chat is a great way to tune in for a half hour and learn the latest on China pharma.

• How: To join the discussion or ask a question, use hash tag #PAS13 and reference @PharmAsiaNews. Or reply to our ongoing discussion on @PharmAsiaNews using hash tag #PAS13.

Take the PharmAsia China Survey, Get a Discount to PharmAsia Summit-Shanghai

Our colleagues at PharmAsia News are launching a survey on the China life sciences industry. We encourage all readers interested in China to participate. (Filling out the survey should take five minutes and in exchange you'll be eligible for a 15% discount on the PharmAsia Summit-Shanghai Sept. 24-26.)

The rise of emerging markets like China has provided life sciences companies with significant new growth opportunities, but also the challenge to achieve better health outcomes in regions struggling with affordability barriers and huge unmet medical needs.

China, in particular, is on the radar of most industry executives given its scale. China has risen to become the world’s third largest pharma market, according to data from IMS Health, and some analysts believe China is already the second largest market, trailing only the U.S.

To gain a better understanding of how industry is integrating China into their global strategies, Elsevier Business Intelligence (publisher of PAN, In Vivo, and "The Pink Sheet", among other titles) is teaming up with BayHelix, an organization of leaders of Chinese heritage in the global life sciences community, and the Monitor Group, a leading strategic consultancy, to launch a proprietary survey of PharmAsia News and EBI readers.

To start the survey, please click here.

Findings from the survey will be included in an exclusive report on innovation in China, to be released during the PharmAsia Summit-Shanghai (sponsored by EBI and BayHelix). In addition, selected findings will be covered in PharmAsia News during the weeks leading up to the Summit.

Please note that survey participants will remain anonymous. You will be issued a special code at the end of the survey to receive your 15% discount to the PharmAsia Summit-Shanghai.

Thank you for participating!

photo by Josh Berlin

PharmAsiaSummit: Emerging Markets Are Growth, Growth, Growth, But Where's The Beef?

Windhover's PharmAsiaSummit is October 25-26 in San Francisco. For a more information and a complete PharmAsiaSummit agenda, visit our website or email Josh Berlin to learn more. We hope to see you in San Francisco. What follows is an advertisement for the meeting.

A recent forecast by IMS Health demonstrates much of what we've been hearing in emerging markets over the last several years. The market research firm forecasts 15-17% growth next year in the 17 countries designated as "pharmerging" markets, which includes the usual suspects (the BRIC countries), as well as fast followers ranging from Turkey to Indonesia to Mexico.

To be sure it's off a smaller base, but the base is growing, and next year IMS predicts revenue will reach $170-$180 billion. In other words, it isn't peanuts.

In 2011, pharmerging markets will equal roughly half the size of the US market ($320-$330 billion), which will grow at a comparatively paltry 3-5%, IMS says.

China, of course, is the Big Kahuna, with a pharma market set to reach $50 billion next year, making it the third largest. With a growth rate of 25-27% - fueled by demographics (a rapidly aging population and urbanization, for instance) and a massive government push to extend basic health insurance to China's 1.3 billion population - it is no wonder that IMS recently raised China to its own tier as part of its analysis, essentially separating the C from the BRI.

Although much of the growth will come from local manufacturers selling branded generics, there is plenty of growth to go around. Pfizer, for instance, is the largest foreign pharma in China, yet it's captured only 2% of the market, Morgan Stanley notes in a recent report. In India, Abbott is the top dog following its acquisition of Piramal earlier this year, yet it commands only 6% of India's famously fragmented market.

It's no wonder that pharmas from Pfizer to Abbott to Merck to AstraZeneca have jumped into the branded generics space, looking to sell off-patent medications in emerging markets and in some cases partnering with Indian generic companies to expand their offerings.

The editors of our sister publication, PharmAsia News, which has boots on the ground in China, India and elsewhere in Asia, like to talk about the excitement they hear from sources and friends in the industry - excitement about growth opportunities, new models for R&D, commercial strategy, China healthcare reform and so forth.

But one thing we often find missing in the discussion is specifics. What, specifically, are the right commercial strategies for China, or India or Korea? What, specifically, should biopharma companies do to take advantage of China health care reform? What, specifically, are the opportunities for partnerships or outsourcing in China? What specifically, should you do to protect intellectual property in India?

Who should you talk to? What case studies are relevant? Where should you place your bets?

Specifics are hard to come by via channels we use in the West - the media for instance or trusted websites. In Asia, most important lessons are discussed offline, and things change so quickly in markets like China and India that what worked last year might not work today.

In short, you need a strong, local network to understand the rapidly changing market.

That's the idea behind our PharmAsia Summit. We've decided to bring some of our Asia network to San Francisco this month to talk about specifics - what works, what doesn't, and what you need to know to succeed. If you're based in the U.S., it's a great chance to meet face-to-face with Asia pharma leaders.

We won't have all the answers - no one does. And what works today might not work tomorrow. But what you'll have is a forum where industry leaders - from Biogen Idec's Gunther Winkler to Merck's Ramesh Subrahmanian to Onyx's Tony Coles - will discuss Asia case studies on dealmaking, commercial strategy, outsourcing, regulatory risks, IP protection, and pricing and reimbursement.

We'll have leading Asia investors like OrbiMed's Jonathan Wang, top China analysts like Piper Jaffray's Hongbo Lu, commercial gurus like MSD's Sanjiv Navangul - a key figure behind Merck's groundbreaking strategy for Januvia in India - and IMS Health Asia VP Jan Willem Eleveld, who will provide the latest Asia data and trends.

And as policies are changing so quickly in Asia, we also have a few regulators making the trip, including Shanghai FDA's Yi Chengdong, Korea FDA's Hong Soon Wook, and U.S. FDA country directors from China and India, Chris Hickey and Bruce Ross.

From PharmAsia News: An Interview with Sanofi-Aventis China R&D Head Frank Jiang

Part of the reason behind Sanofi-Aventis' success in emerging markets is its aggressive strategy in China, where it currently has 3,500 employees in vaccines, R&D, commercial operations and manufacturing. Sanofi-Aventis China R&D Head Frank Jiang sat down with PharmAsia News editor Tamra Sami to discuss the environment in China and how Sanofi is approaching R&D there.

Biotechs are blooming in China, and the industry is predicting that Shanghai will look much like San Diego in a few years, Sanofi-Aventis China R&D Head Frank Jiang told PharmAsia News.

With the cost of developing a drug now $1 billion, and half of drugs failing in late-stage trials, there is an even greater need to break down traditional "linear" drug development and come up with different models. Big Pharma is increasingly looking outside of its walls for sources of innovation both for drug development and for biomedical diagnostic tools.

"But we need a way to match new scientific tools and approaches with clinical design - not the kind of clinical design we do today," Jiang stressed.

"Biotech in China is blooming, but we have not seen any global product coming out of China, and the challenge for China biotechs is that the best science remains in the universities and academic institutions, many being government-supported programs," Jiang said.

Perhaps an even bigger drawback for Chinese biotechs is the Chinese culture itself, which can be risk-averse. Most drugs fail, "so you need to have vision, resource, infrastructure and the patience to see the outcomes," he said.

Also, the ability to fail a compound earlier is an important advance for the industry.

Most multinational pharma companies now include China in their global drug development programs, and China is playing an increasingly important role in companies' R&D strategies, partly because of the country's dynamic growth and ability to be more adaptive.

"This is the best time to work here - change is so fast; we are still building, which is somewhat different from Japan," Jiang said.

China contributes close to 10 percent of Sanofi's global patient population for its clinical trials. China's State FDA regulations specify that for a drug to be approved in China, there must be a minimum of Chinese patients - in most cases 240 - in a Phase III trial, Jiang said.

He noted that China has participated in several global mega trials, including one with a total patient population reaching 21,000.

It would be difficult to show any statistical significance with 240 patients out of a total patient population of 21,000, but if you stack the patient population to include early responders using predictive tools such as biomarkers, you can shrink the sample size, he said.

"We are working very closely with SFDA and [the agency] is very interested in how to utilize adaptive trial designs," he said, noting that during a workshop presentation in March, SFDA Center for Drug Evaluation reviewers were especially interested in how to use biomarkers to identify those early responders "so you can decrease the sample size and get a response in a much larger differential."

Adaptive trial designs use accumulating data during the study and then look at that data at pre-determined interim points, which then determine how the latter part of the study is modified without undermining the validity and integrity of the design. Those modifications, however, are not ad hoc - they are prospectively built into the trial design.

"If an interim look shows that the patients with 'gene X' are responding better to a drug, why would you continue to test patients that are not responding who do not have gene X?" Jiang asked.

Another way of conducting adaptive trials is to start out with multiple different dose arms, and then drop one or two of the most inferior treatment arms based on pre-defined rules. Jiang said this is one simple way that multinational companies can conduct adaptive global trials that not only will avoid unnecessary exposure of patients to inactive treatments, but also increases the success rate of clinical trials.

The "key difference between traditional design and adaptive design is that traditional study design is very rigorous and focused, which is good for scientific hypotheses to be tested," Jiang said, "but it is fixed and inflexible in that you do not allow new information to help you to improve the outcome of the remaining part of the study."

"If you test a new compound for lung cancer - you take all lung cancer patients that match inclusion criteria and if 20 percent of patients have tumor shrinkage and this compound has a comparable safety profile to the existing drugs, this drug may be approved," Jiang explained.

"But what we are doing very poorly is knowing what features of those 20 percent of responding patients are. As a result, doctors don't know which patients will respond and may prescribe the drugs to those 80 percent non-responders who are then exposed to an inferior treatment and potential side effects. Adaptive design can address this."

"You can only do scientific assumptions to the best of your knowledge at that point in time, and if at the interim look, for example, you see that your mortality reduction is not 10 percent as you assumed at the design stage - but 5 percent, still a clinical meaningful advantage - you should enlarge your sample size (based upon a pre-specified statistical method) so that you will have enough power to detect that 5 percent advantage."

In the past, he said, a trial would have failed, but with an adaptive design, premeditated looks at the data are allowed to allow a drug sponsor to enlarge the sample size to demonstrate the efficacy and safety of a drug while maintaining scientific integrity of a clinical trial.

For the time being, companies are not conducting adaptive trials in China, Jiang said, but it will likely happen once a few hurdles are cleared.

The biggest hurdle now is the lengthy timeline for clinical trial approval to begin Phase I-III studies, and this is the main reason that China is merely a participant in global trials and not leading the way, he said.

"We do want to invest in China - we have perhaps hundreds of different trials - but the number we can actually bring to China is only a small fraction," Jiang said. For trials that need to be completed in a year, China would miss out completely, he said, because "we just don't have time to enroll the patients."

Still, he does see progress and SFDA and CDE are "acutely aware of this issue and are doing everything they can to shorten the timelines," he said.

For example, SFDA recently instituted a special approval procedure to fast-track certain drugs, and is increasing resources and investing in technology and infrastructure that will one day support multinational and domestic companies to bring in more innovative medicines.

[Editor's note: This is part one of a two part interview; look for part two in an upcoming issue of PharmAsia News. Want to know more about growing your pipeline in Asia? Don't miss the PharmAsia Summit Oct. 26-28 in San Francisco where Frank Jiang will participate in a China R&D roundtable discussion with other pharma leaders in China. Click here for more information.]

Novartis' Herrling Talks China with PharmAsiaNews

Every major pharmaceutical company has a "China" strategy. Novartis is among the most aggressive: it is currently the fourth biggest supplier of medications to hospitals in that country and aims to make China one of its top 10 markets by 2010.

Reporters from FDC Reports' PharmAsia News, a sister publication to IN VIVO Blog, sat down recently with two Novartis execs well versed in all things China: Paul Herrling, Head of Corporate Research and En Li, VP and head of research for Novartis Institutes for BioMedical Research Shanghai. The two were in Shanghai to discuss Novartis’ R&D plans in China and the Pacific Rim at the China 2008 Pharmaceutical R&D Summit.

Herrling (pictured right), who also serves as chairman of the Novartis Institute of Tropical Diseases in Singapore, was in town to give a keynote address to the summit. He also visited Novartis’ China R&D center, which broke ground on its permanent headquarters in Shanghai’s Zhangjiang Hi-Tech park April 2. Novartis, which has more than 2000 full-time employees in China, has said it plans to make an initial investment of $96 million to build the R&D center, focusing on treatments for diseases with a high prevalence in that country. (Our 2006 take on the NITD and its ilk can be found here.)

PharmAsia News: In your keynote talk, you mentioned Novartis' efforts in China to develop Western medications based on traditional Chinese medicine. Can you elaborate on your strategy?

Paul Herrling: China wanted for a while at first for us to come here and establish our research institutes because of a number of reasons we've heard like patents [and] talent development. And we weren't quite sure at what level China was - it was clear that it was going to be a tremendous market, because, mostly in the U.S., a significant part of our scientists in the lab are Chinese.

And at that time, that was about 10 years ago, of course, there was nothing for them here to come back to. And that's why they were all there. So we started by setting up yearly mini-symposia where we would put 10, 15 Chinese scientists, 10, 15 Novartis' scientists in an air of choice. And just sit together for three days and talk. And actually the first of these discussions started around traditional Chinese medicine, how could we make use of that for our kind of drug discovery efforts. And that's how the Shanghai thing started.

And essentially it was a way to expand the diversity of our chemical libraries. Because what's turned out is that, during the combinatorial chemistry climb, people could all of sudden make a lot of compounds. But at the same time, the hit rates would trend to zero because the criteria on which these libraries were made were chemical, not biological. So the chemists would do what would be easy to stick on beads and to vary it easily and quickly, which was not necessarily the same that biology needed.

And Novartis was a company that actually never gave up their natural compounds, whereas most big pharma companies got rid of their natural compounds. We still have a group now of more than 50 people. And they were very much a proponent of trying to do exactly what I described in my talk, use traditional Chinese medicine as a guide to where to find active ingredients. …

So we did this symposia for 10 years and during these 10 years in which I started doing that … you wouldn't recognize China then, between then and now. Because as I always like to describe it, when you went to Beijing at that time, you know the big avenues? With the small streets on the side and the big central one? Well, when I came here the first time, the center one was filled with bicycles and the few cars had to go on the side. And now you go look at it.

And all of China has changed that way, completely. And in our era, it was very clear what we saw in the symposium, like three, four years ago, is that now the Chinese were doing major efforts to create an environment in China to get Chinese scientists abroad back into the country. …

Another aspect 10 years ago that was very clear - health, pharma was absolutely not a priority in China at that time. Food, housing, heavy industry, all of that [were] and they had no resources for research-based companies. They bought what they needed or they copied what they needed locally. And that changed. So over these 10 years talking to the Minister of Science & Technology, the Health Minister, you could see that the interest changed.

And at a certain time, about three years ago, I recommended to our bosses, now is the time for En Li's institute. And they decided, yes, they would do that and actually we decided to establish our own research institute here.

PharmAsia News: Given the debate in China about whether to build an R&D facility or a virtual one, why did Novartis decide on a bricks-and-mortar approach?

Herrling: If you think that this environment is going to be important for pharma in the future - and it is, we're totally convinced that it is one of the most important emerging markets - and it's also clear that the culture and the specifics are different than in the U.S. and in Europe. And my conviction is you can't learn without getting wet. That is, the best way to get into the mindset, to understand the local science, talent and the needs also of the patients, is by actually doing research here.

So that was the decision then that we would do that, and create this institute first as a real antenna to what the environment here is, and to learn the peculiarities. In fact, what En's institute is focusing on first - he mentioned patients - is to focus on diseases that are more predominant in China than they are in the West. And that's hepatic cancers and nasopharyngeal cancers. And to try to understand what the differences are, in particular. So these are a few thoughts. And it's going to be an integrated research and development [center].

Part one of this two-part interview appeared May 5 in PharmAsia News. To access the full interview, please visit PharmAsiaNews for a 30-day free trial.