In Mao’s China it was a familiar sight for workers to begin their day with communal exercises. During the Cultural Revolution, students shouted slogans such as “Great leader Chairman Mao teaches us: develop sports! Enhance people’s health! Be alert and protect our motherland.”
No more. Physical activity among the adult population has halved since 1991 and a whole host of other modern lifestyle choices (city living, smoking, alcohol and stress) are thought to explain an explosion in cancer rates.
According to China’s Cancer Research Institute, incidence of breast cancer has risen 96% over the past 30 years, while lung cancer has shot up 465%. In 2013, the data showed that 235 people per 100,000 were diagnosed with the disease.
Cancer has become China’s biggest killer but the healthcare system has not kept pace. As a result, over 60% of people diagnosed with cancer in 2013 died of the disease. Only 30% currently survive beyond five years, compared with roughly 65% in the US.
One of the first signs of change came in 2012 when the government made biopharma one of its seven pillar industries. Since then, it has also been changing the way hospitals operate by basing their relationships with drugs companies on clinical evaluation rather than marketing incentives.
This October, Premier Li Keqiang reinforced the sector’s importance when the State Council released a new report Healthy China 2030. “We’ve made outstanding progress across major scientific endeavours. We can now probe the moon and the deep sea,” Li told his cabinet. “For the next step, we must work hard to tackle public health.”
By 2030, the government wants to report healthcare indicators in line with a high-income country. To do so, the State Council plans to take on new approaches in tackling cancer, such as the use of Big Data to answer unsolved questions (by gathering details of patients’ personal lives and deducing why people get the disease). It also wants to develop national champions rather than rely on foreign firms such as Roche, the country’s main supplier of cancer drugs.
This means the healthcare industry needs to move on from generics (90% of the drugs sold compared to less than 20% in Japan). And where cancer is concerned, it also means shifting from anti-metabolic drugs to the monoclonal kind used in developed countries. The latter act as homing devices directing chemotherapy drugs to cancer cells and in 2014 racked up $68 billion in global sales, but only $0.9 billion in China.
In a recent speech, Bi Jingquan, head of China’s Food and Drug Administration (CFDA), lamented how little China spends on pharma R&D ($6.3 billion out of the $157 billion global total). China contributes just 4% of the drugs in development compared to 50% for the US.
Chinese firms have moved up the value chain, although they are not yet developing first-in-class drugs but follow-on ones, often based on research by US companies.
The CFDA is hoping to speed up the transition, and boost drug firms’ profitability and willingness to experiment, by shortening the approval periods for new products. Earlier this year, it said it would start accepting data from overseas clinical trials too.
Local players are already forging international partnerships. Hutchison China MediTech and Eli Lilly have a new bowel cancer drug up for approval later this year. In September, Beigene also closed a $1.39 billion deal with America’s Celgene.
Patients might soon start to benefit from their labours. Earlier this year, 339 new drugs were added to the list of medicines covered by the country’s basic medical insurance. The government has also launched a pilot project which for the first time includes 10 types of tumour-targeting drugs on Shanghai’s reimbursement list.
Not everyone in China is impressed. One WeChat user suggests the government “should focus more on prevention”. Another highlights the failure to stop hospitals from boosting their margins by promoting higher-priced drugs at patients’ expense (a longstanding gripe that WiC first cited eight years ago).
But with Li Keqiang’s declaration we can expect new scrutiny of the sector and the efficiency of local treatments to improve dramatically in the decade ahead.
© ChinTell Ltd. All rights reserved.
Exclusively sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.