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Commercial Perspectives: Hepatitis B and C - The Chinese Way?

Published by: Datamonitor

Published: Aug. 26, 2004 - 102 Pages


Table of Contents


TABLE OF CONTENTS

CHAPTER 1 EXECUTIVE SUMMARY 3

Scope of the analysis 3

Datamonitor insight into the Chinese Hepatitis B & C market 3

Despite possessing a fifth of the global population, a largely undeveloped economy restricts Chinese healthcare expenditure to 1% of global medical expenses and spending per capita ($49 per head) almost 10 times less than that recorded in the US (WHO figures). Pharmaceutical expenditure accounts for a large proportion of healthcare spending (approx 70% in 2002) of which Western companies such as GSK play an increasing role. 4

Parenteral viral infections such as HIV/AIDS, hepatitis B and hepatitis C greatly affect regional populations in China, especially Yunnan and Guangdong provinces where use of unsafe syringes (ranging from 30-100%) and maternal-to child transmission are key epidemiological drivers. China is estimated to account for one third of chronic HBV and one fourth of chronic HCV infections worldwide with 20m sufferers of viral liver disease in total. 250-280,000 HBV related deaths occur annually, claiming more lives than HIV/AIDS. 5

Official estimates suggest that China’s yearly medical expenses for liver disease infections are more than $12 billion providing a significant cost-benefit argument for effective Western treatments and HBV vaccination, which compete against non-pharmaceutical treatment options. Key China HBV antiviral products are GSK’s Heptodin (lamivudine), Hepsera (adefovir dipivoxil) and Sciclone’s Zadaxin (thymosin alfa 1) the latter being launched first in 1996. 6

According to IMS Health the total Chinese HBV and HCV combined market was worth over $70m in 2003 and is growing rapidly (CAGR 1999-2003, 36%). This growth is largely due to increased uptake of branded antivirals such as Heptodin and Zadaxin, which have reduced market share of unmodified interferons (Schering-Plough’s Intron A). Generic molecules make-up around 52% of market share in 2003 despite the absence of locally produced lamivudine. Datamonitor estimates that IMS sales data covers between 56-67% of current HBV and HCV 2003 market value, which could be as high as $112m. If China can reach average Western rates of diagnosis and treatment the annual market for an HBV antiviral could be approx $660m, or five times the current market value. 7

Key metrics 9

CHAPTER 2 CHINA: AN OVERVIEW 18

Country profile 18

Economy 18

Shift from a centralized to a market economy 18

Benefits from World Trade Organization (WTO) membership 20

Society 22

Healthcare in China 23

The current scenario 23

Symptoms of an ailing healthcare system 25

Discrimination against the poor 26

Reforms on the horizon? 26

Economic potential of the Chinese healthcare market 28

International presence 31

CHAPTER 3 HBV & HCV IN CHINA 33

Infectious diseases in China 33

Viral hepatitis: a brief introduction 34

Disease definition and epidemiology 35

HBV disease definition 35

Transmission and disease manifestation 36

Disease life-cycle and progression 37

Coinfections with other pathogens 39

HCV disease definition 39

Transmission and disease manifestation 39

Disease life-cycle and progression 40

HBV & HCV epidemiology 41

Case study: pharmaceutical management of HIV/AIDS in China 47

Background: parallels between HIV/AIDS and chronic hepatitis 47

Roles for the international corporate sector 49

Governmental intervention 50

CHAPTER 4 HEPATITIS TREATMENT OPTIONS 53

Treatment goals 53

HBV disease management 53

Criteria for initiation of treatment 53

HBV drug therapy 54

Immune modulators 56

Nucleoside analogues 57

Combination therapy 60

HBV drugs in the pipeline 60

HCV disease management 61

Criteria for initiation of treatment 61

HCV drug therapy 61

Monotherapy: interferons and pegylated interferons 62

Combination therapy 63

Genotype dependence on response rate 64

HCV drugs in the pipeline 64

Threats to the Chinese pharmaceutical market 65

Traditional Chinese Medicine (TCM) 66

Counterfeit drugs 66

Case study: Pfizer takes action against counterfeit medicines 67

Prevention 67

HBV vaccination 68

Hepatitis management in China 70

CHAPTER 5 THE CHINESE HBV & HCV MARKET 71

HBV & HCV pharmaceutical sales 71

Western presence in the Chinese pharmaceutical market 73

Market share by drug class 74

Market share by individual drug 76

Generic competition 79

Case study: Sciclone’s success story Zadaxin 82

The current and prospective Zadaxin market 83

Sciclone’s growth strategy 85

Case study: GSK’s lamivudine causes conflict of interest 87

Limitations of the Midas Medical Data, IMS Health 89

IMS sales data versus real sales 90

Estimation of annual Chinese HBV antiviral commercial potential 91

APPENDIX A 93

Bibliography 93

Journal articles 93

Conference presentations 94

Press releases 95

Organizations and websites 97

Miscellaneous 98

APPENDIX B 100

About Datamonitor 100

About Datamonitor Healthcare 100

Datamonitor Healthcare’s research and analysis methodologies 101

Disclaimer 102





Abstract

Introduction
Along with China's growing economy, the need for improved healthcare infrastructure and modern pharmaceuticals has attracted many Western manufacturers. One immediate opportunity is the region's high proportion of global chronic Hepatitis B and C. Antivirals such as lamivudine and adefovir compete not only against Zadaxin and interferons, but also established traditional remedies.

Scope
Up to date overview on Chinese healthcare indicators, current market scenario and outlook for Western manufacturers
Discussion of impact of infectious diseases on China with focus on parenteral viruses: Hepatitis B and C, HIV/AIDS
Discussion of Hepatitis B and C epidemiology in China along with disease management strategies including availability of Western treatments
Discussion of China market dynamics including class, product and company share. Appraisal of IMS data coupled with epi based HBV market evaluation
Highlights
Despite possessing a fifth of the global population, a largely undeveloped economy restricts Chinese healthcare expenditure to 1% of global medical expenses and spending per capita ($49 per head) almost 10 times less than that recorded in the US (WHO figures).

China is estimated to account for one third of chronic HBV and one fourth of chronic HCV infections worldwide with 20m sufferers of viral liver disease in total. 250-280 thousand HBV related deaths occur annually, claiming more lives than HIV/AIDS.

According to IMS Health the total Chinese HBV and HCV combined market was worth over $70m in 2003 and is growing rapidly (CAGR 1999-2003, 36%). Datamonitor estimates that IMS sales data covers between 56-67% of current HBV and HCV 2003 market value, which could be as high as $112m.

Reasons to Purchase
Gain an up to date view on infectious diseases in China including current epidemiology, treatments and outlook
Understand current penetration strategies of Western manufacturers as they gain foothold in this significant market
Benchmark the commercial potential of markets for HBV and HCV treatments with internal estimates



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