Unhealthy profits

China’s 92 million diabetics trigger surge in pharma firms’ insulin sales

Unhealthy profits

Weighty problem: diabetes

The UN has managed to eradicate just one human illness so far: smallpox. In 1967, the WHO launched an intensive plan to eradicate the disease, then threatening 60% of the world’s population, killing every fourth victim, and scarring or blinding most survivors. Clearly, that focused minds on the task at hand. The last naturally-occuring case was reported in Somalia in 1977.

Perhaps it’s time for another potential epidemic to be taken just as seriously. China now has more diabetics than any other country in the world, according to a recent study published in the New England Journal of Medicine. Until recently India was thought to be the hardest hit. But at 92 million, China has almost double the number of sufferers of its Asian rival.

There’s no glory in that title – made worse by the fact that more than 60% of Chinese diabetics aren’t even aware they have the disease. That leads to cases of untreated diabetes which generates a series of other medical conditions. It also contributed to an estimated 500,000 deaths last year (usually from heart attacks).

“A combination of poor public awareness and limited access to early detection services are largely responsible for the low diagnostic rate on the mainland,” Ji Linong, president of the Chinese Diabetes Society, told the China Daily. “The government should spend more on services to intervene and prevent diabetes.”

Unlike smallpox, diabetes is a chronic disease (meaning it won’t kill you quickly), and it isn’t contagious. Type-2 diabetes (by far the most common variety) is caused by the sugar-rich diet adopted by many urban Chinese over the past few decades. Eventually the body’s insulin (the hormone that regulates the level of sugar in blood) stops working as well as it’s supposed to.

“As people eat more high-calorie and processed foods combined with less exercise we see an increase in diabetes patients,” explains Huang Jun, a professor at Jiangsu People’s Hospital.

It’s thought that almost 10% of China’s adult population now has some form of diabetes, with over a million new cases cropping up annually. Treating the illness costs the health care system an estimated $26 billion, or 13% of the current yearly total spend.

And that figure is growing quickly. “The cost of treating diabetes will rise rapidly in the next 10 to 20 years,” worries Ji, “as patients who have gone undiagnosed develop serious complications whose treatment will definitely cost more.”

A healthy lifestyle is key to prevention and treatment of diabetes. But those tactics aren’t enough for many of those already stricken, who must rely instead on anti-diabetic drugs, and ultimately insulin therapy.

The prospect of injecting insulin (still the most common treatment) after every meal may be bad news for a generation of new diabetes sufferers but it’s rather better news for the insulin makers. The market potential is so promising that US pharma giant Eli Lilly recently announced it was building a diabetes research centre in Shanghai.

In fact, the major multinationals continue to dominate China’s insulin market, and many have shifted manufacturing operations there. Sanofi Aventis and Bayer have both built facilities in the country. But the market leader is Danish firm Novo Nordisk, which has a 60% market share.

That level of foreign domination may not last too much longer. Tonghua Dongbao, a little-known domestic player, has ambitions to catch up with the multinationals. Sales were $59 million last year, up 45% from 2008. That’s just a fraction of the $3.9 billion Novo makes in insulin-related sales globally. But it’s still a steep growth curve: total profits for the first half of 2010 were almost three times higher than the same period last year.

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