In a potential threat to foreign drugmakers profiting on innovative drugs, the Chinese government on Tuesday issued a new policy package—including tax breaks—to promote generics.
The package (Chinese) would allow certain qualified generics makers to be designated as high-tech enterprises, a label that comes with a 15% corporate tax rate, compared to 25% for other companies. The policy also makes clear that China considers compulsory patent licensing a bona fide option during public health emergencies or shortages of key drugs.
The government’s health department and recently rebranded drug regulator will compile and actively update a drug list that encourages companies to produce generic versions. That list will include medications for rare diseases, major infectious diseases and pediatric treatments, as well as important drugs that are running scarce.
Just months after picking up Advanced Accelerator Applications in a $3.9 billion buyout, Novartis is getting a quick boost with the U.S. approval for Lutathera. The FDA approved the first-in-class med as a treatment for rare cancers of the digestive tract the other day.
Lutathera is first the peptide receptor radionuclide therapy to win U.S. approval, according to a release from AAA. Approved to treat somatostatin receptor-positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs), the drug works by binding to the receptors and then using radiation to fight cancer.
Jefferies analysts have predicted $500 million to $1 billion in peak sales for the drug, while Baader Helvea analyst Bruno
Bulic has been more optimistic. At the time of the AAA acquisition by Novartis last year, he predicted $2 billion in peak sales, according to Reuters.
In a move likely to benefit Chinese citizens as well as foreign drug firms, the Chinese government has agreed to accept data from clinical trials conducted outside China for the approval of new drugs.
“Applicants can directly apply for drug listing registration after the completion of the international multicenter drug clinical trials,” the China Food & Drug Administration (CFDA) disclosed in a statement.
IMS Health, a market research firm, expects that China will account for 11% of global pharmaceutical spending by 2020. The country is already the world’s second-largest drug market after the U.S.
———By Jean-François Tremblay