OBJECTIVES:

As China seeks to update the National Reimbursement Drug List (NRDL) annually, an understanding of the various strategies that manufacturers employ, and necessary considerations associated with the commercial opportunity of NRDL inclusion have become increasingly important. Our research aims to evaluate the outcomes of the 2019 NRDL negotiations involving programmed cell death protein (PDx) and direct-acting anti-viral agents (DAA) products and provide key learnings to the manufacturers.

METHODS:

Secondary research was conducted to identify the 2019 NRDL listing status of PDx and DAA products, and to understand the competitive landscape and dynamics in the oncology and hepatitis C disease space, which may have impacted the negotiation outcomes.

RESULTS:

A total of four PDx products were eligible for the 2019 NRDL negotiations (pembrolizumab, nivolumab, toripalimab, and sintilimab). Only sintilimab was successfully included in the 2019 NRDL, likely due to the willingness to provide a steeper discount vs. other PDx manufacturers, as well as the small budget impact associated with its classic Hodgkin Lymphoma target population, which contrasts with the other PDx approved indications (melanoma, non-small cell lung cancer, head and neck squamous cell carcinoma). Conducting a future PDx competitive landscape analysis helps clarify the rationale for such aggressive discounting being employed to achieve NRDL listing.

By contrast, the negotiations involving the four DAA products (ledipasvir / sofosbuvir, elbasvir / grazoprevir, sofosbuvir / velpatasvir, and danoprevir), which are largely seen to be clinically undifferentiated from an efficacy perspective, involved a bidding-like negotiation through which manufacturers competed for steep discounts (~85%) in exchange for two-year exclusivity on the NRDL.

CONCLUSIONS:

The 2019 NRDL negotiations employed new approaches in unique disease areas. Coming to the table, manufacturers will need to understand the negotiation rules, current and future competitive landscapes, as well as the walk-away price point balancing broad access vs. overall commercial opportunity.