Oncology Treatment Trends and Implications for Future Drug Development In China Presented by Stephanie Hawthorne 16 April 2013
Economic development, demographic shift, regulatory environment change, industry structure evolution are the major forces driving a growing market China market growth drivers Industry Structure Economic Development 8% GDP growth Growing household income Demographic factors Aging population Changing disease pattern Regulatory environment Healthcare reform Increasing government investment ($125 B over five years) Increased investment from all players Accelerating new product launch Expand sales forces 2009: USD$ 32Bil Projected China Market Value 2014: USD$ 76-86Bil Source: Kantar Health analysis 1
The population in China greatly exceeds the current largest pharma markets The population of China is approximately 75% larger than the combined populations of the 7 countries that currently represent the largest pharmaceutical markets by sales Total Population, 2013 Millions 1,500 1,200 900 600 300 - US, EU5, J China US FR DE IT ES UK Japan Source: U.S. Census Bureau Intercensal Estimates and International Data Base, Japan Statistics Bureau, Japan National Institute of Population and Social Security Research, Instituto Nacionale de Estadistica, National Institute of Population and Social Security Research 2
Despite the large total population, the cancer market is smaller than one might expect The incident cancer market in China is approximately 80% of the size of the G7 combined, and twice the size of the U.S. incident population The lack of comprehensive diagnosis of cancer, particularly in rural China, is most likely responsible for the apparently low incident rate Incident Cancer Population, 2013 5 Millions 4 3 2 1 - US, EU5, J China US FR DE IT ES UK Japan Source: Kantar Health, CancerMPact Patient Metrics, accessed March 15, 2013; China 2011 Cancer Registry Annual Report 3
The growing cancer population in China may be associated with an increase in key risk factors Cancer mortality in China has been increasing rapidly and continuously over the past thirty years, from 74.2 per 100,000 in the 1970s to 108.3 per 100,000 in the 1990s and to 135.9 per 100,000 in 2004 05. This trend suggests an increase in risk factors for cancer, such as an aging population, deterioration of the environment, and an increasing adoption of western lifestyles. Prevalence of Cancer Risk Factors, 2011/2012 80% 60% 40% 20% 0% Smoking Drinking Overweight / Obese China US EU5 Japan Source: Kantar Health. March 2013. National Health and Wellness Survey, 2012 [US, China], 2011 [EU5]. Princeton, NJ. 4
Cancer is more than just a disease of the elderly, it has a meaningful impact on the entire community Treatment for cancer has a negative impact on workplace productivity, for the patient Separately, caregivers may also find their productivity significant impacted The increase in absenteeism and loss of productivity speaks to one of the non-clinical unmet needs of cancer Source: Kantar Health. March 2013. National Health and Wellness Survey, 2012 [China]. Princeton, NJ. 5
Variation exists in the types of cancer most commonly diagnosed by global region While cancers of the colorectal and lung are common worldwide, tumors such as gastric and liver cancers have a greater incidence in Asia Top 5 Breast Prostate NSCLC Colorectal Melanoma Top 5 Prostate Colorectal Breast NSCLC Bladder Top 5 Gastric Colorectal NSCLC Breast Prostate Top 5 NSCLC Gastric Colorectal Liver Esophagus These differences support alternative opportunities and priorities for new drug development in China Sources: Incidence Rating based on 2013 projections; Kantar Health, CancerMPact Patient Metrics, accessed March 15, 2013; China National Central Cancer Registry under the Ministry of Health, 2012. 6
Fewer established cancer screening programs also lead to more advanced stage disease at diagnosis The vast majority of prostate cancer patients in the US, EU5, or Japan will be diagnosed with Stage II disease, whereas in China the majority of patients are diagnosed with Stage III/IV disease While there are few patients diagnosed with Stage IV breast cancer globally, there is a greater shift toward being diagnosed with Stage II/III disease in China than in the US, EU5, or Japan Stage at Diagnosis, Prostate Cancer, 2013 Stage at Diagnosis, Breast Cancer, 2013 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% US EU5 Japan China 0% US EU5 Japan China Stage I Stage II Stage III Stage IV Stage I Stage II Stage III Stage IV The shift toward late stage diagnoses in China increases the need to rely on drug therapy for patient management Source: Kantar Health, CancerMPact Patient Metrics / EpiDatabase, accessed March 15, 2013; Li, et al, Chin Med J, 2004. 7
Treatment of cancer varies globally, for a number of reasons Category Access (regulatory) Access (affordability) Influencers Providers Patients Market authorization Out-of-pocket health care expenditures shift choice to lowest cost alternative Cooperative groups promote different standards Cancer care delivered by different specialties Ethnic differences in genetics, disease shape local approaches Example TS-1: standard of care for gastric in Japan; recently approved in Europe and China, unavailable in the United States Drug lag for Avastin: standard of care for CRC in Europe, Japan, and United States for nearly 10 years; approved in China in 2010 Orchiectomy for prostate cancer in China: surgery is cheap, compared to high (and continuing) cost of hormone therapy Herceptin, Rituxan: utilization in China Tier 1 cities half of G7 Hodgkin s: BEACOPP developed by German HLSG Myeloma: IFM favors Velcade, ECOG favors Revlimid Surgeons or Medical Oncologists: surgeons administer chemotherapy in Japan and favor low-toxicity, oral drugs Hospital systems in Tier 1 cities in China similar to the United States with chemotherapy departments Iressa in NSCLC: toehold in China and Japan, due to higher background rate of sensitizing EGFR somatic mutations Lower doses of cisplatin and taxanes utilized in China due to different metabolism related to pharmacogenomic differences 8
Key differences in the treatment of prostate cancer in China compared with the G7 In China, orchiectomy continues to be used as a means of testosterone deprivation in early-stage prostate cancer patients, in contrast to the (near universal) medical / chemical castration practiced in G7. Cost is likely the driver for the patients who receive it, as surgery is cheap compared to the higher, continuing costs of hormone therapy. Treatment of Non-metastatic Prostate Cancer, 2011/2012 Japan EU5 US China 0% 20% 40% 60% 80% 100% CAB LHRH analog only Orchiectomy only Other Notes: CAB, complete androgen blockade; LHRH, leutenizing hormone-releasing hormone Source: Kantar Health / Draco, CancerMPact Treatment Architecture, accessed March 15, 2013. Survey of 50 physicians in three Tier 1 cities. 9
Key differences in the treatment of hepatocellular carcinoma in China compared with the G7 Treatment of locally-advanced HCC in China tends to rely more on the use of localized treatment options (i.e., TACE, RFA, HAI) similar to practices in Japan, whereas systemic therapy is more highly utilized in the US and EU Modality Treatment Approaches, Stage III / BCLC-C HCC, 2012 60.0% 40.0% 20.0% 0.0% TACE alone Total TACE Total Surgery Total Localized therapy China US EU5 J Chemo alone Notes: TACE, transarterial chemoembolization; RFA, radiofrequency ablation; HAI, hepatic arterial infusion Source: Kantar Health / Draco, CancerMPact Treatment Architecture, accessed March 15, 2013. Survey of 50 physicians in three Tier 1 cities. 10
Key differences in the treatment of breast cancer in China compared with the G7 In early-stage patients, there is a higher use of Breast Conserving Surgery (BCS) without radiotherapy in China, potentially due to the higher cost of radiation therapy compared with generic chemotherapy, despite strong clinical data supporting improved disease-free survival when RT is utilized following BCS Treatment of Stage I-II Breast Cancer, 2012 Japan EU5 US China 0% 20% 40% 60% 80% 100% BCS BCS plus RT Mastectomy Mastectomy plus RT Minimally invasive procedure Other surgical procedure Source: Kantar Health / Draco, CancerMPact Treatment Architecture, accessed March 15, 2013. Survey of 50 physicians in three Tier 1 cities. 11
Key differences in the treatment of breast cancer in China compared with the G7, continued In recent years, the HER2 testing rate in breast cancer has grown greatly, with only half of breast cancer patients being tested in 2008 compared to 91% testing rate in 2012. The increased adoption of HER2 testing can be attributed to increased awareness of the test and coverage under the insurance schema. In 2009, there was a national program National HER2 Testing Quality Certification, sponsored by the Pathologic Society of China (PSA) with the goal of more accuracy of cancer testing Despite the standardization of HER2 testing, Herceptin use still lags HER2 Testing, Breast Cancer, China Use of Herceptin, HER2+ Breast Cancer, 2012 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 2008 2009 2010 2011 2012 0% Adjuvant 1L 2L China US EU5 Japan Source: Kantar Health / Draco, CancerMPact Treatment Architecture, accessed March 15, 2013. Survey of 50 physicians in three Tier 1 cities. 12
Drug therapy coverage is largely dictated by the National Reimbursement Drug List (NRDL) Class A covered drugs are 100% reimbursed by the national healthcare system, and generally tend to be generic drugs Class B drug reimbursement is determined regionally and is typically 30% to 70% of cost; these tend to be newer chemotherapeutics or targeted agents, but often excluded premium priced drugs Some drugs may be covered on a Provincial Reimbursement Drug List Agent Not on NRDL NRDL Class A NRDL Class B 5-FU X Avastin X carboplatin X docetaxel X Erbitux X gemcitabine X Herceptin X Iressa X MabThera X Nexavar X oxaliplatin X Tarceva X Velcade X Xeloda X Source: NRDL List, China, 2009. 13
With cost of therapy a significant barrier, many branded oncology drugs face significant adoption lag Share for branded oncology products in China is generally lower than in the G7, even when limiting analysis to Tier 1 cities Even for agents that have identical indications globally and have been marketed for long duration (e.g., Rituxan), the share in China is significantly lower Only the newer EGFR TKIs (i.e., Tarceva and Iressa) have been adopted to a level nearly equal that observed in the G7 Use of Branded Targeted Therapies Globally 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Avastin in 1L mcrc Erbitux in 2L mcrc MabThera in 1L FL Herceptin in 1L BC Nexavar in 1L HCC China US EU5 Japan EGFR TKI in 1L EGFRmt NSCLC In general, only a proportionally small percentage of patients within the high income bracket will be able to afford highly priced innovative medicines Source: Kantar Health / Draco, CancerMPact Treatment Architecture, accessed March 15, 2013. Survey of 50 physicians per tumor in three Tier 1 cities. 14
Key differences in the treatment of non-small cell lung cancer in China compared with the G7 The choice of modality for the treatment of NSCLC is largely consistent globally There is, however, significant variation in the choice of chemotherapy regimen in metastatic patients Lower priced generic regimens dominate in China, although Alimta is beginning to gain utilization in this treatment setting (increasing from 4% in 2011 to 22% in 2012), which may be due in part to the recent availability of Chinese generics on the market Treatment of 1L Non-squamous NSCLC, 2012 Japan EU5 US China 0% 20% 40% 60% 80% 100% platinum-gemcitabine platinum-docetaxel platinum-alimta platinum-paclitaxel platinum doublet + Avastin Source: Kantar Health / Draco, CancerMPact Treatment Architecture, accessed March 15, 2013. Survey of 50 physicians in three Tier 1 cities. 16
Key differences in the treatment of non-small cell lung cancer in China compared with the G7, continued In the era of targeted therapy, NSCLC is the poster child for personalized medicine, with Tarceva and Iressa approved for the treatment of EGFR mutant patients and Xalkori approved for the treatment of ALK mutant patients In China, Conmana is also approved in EGFR mutants, and Xalkori is not yet launched Key to success of any biomarker-defined agent is the adoption of biomarker testing in patients EGFR mutation testing in NSCLC has increased slightly in recent years, but still only one-half of patients are tested for the mutation 80% EGFR Biomarker Testing, 1L NSCLC, China 60% 40% 20% 0% 2009 2010 2011 2012 Source: Kantar Health / Draco, CancerMPact Treatment Architecture, accessed March 15, 2013. Survey of 50 physicians in three Tier 1 cities. 17
Patients in China are managed less aggressively, with fewer lines of therapy for metastatic disease Despite multiple approved options, which in many cancers is similar to approvals in the G7, Chinese patients often receive fewer lines of systemic therapy for advanced disease Stage IV Colorectal Cancer Stage IV Renal Cell Carcinoma Follicular Lymphoma 80.0% 80.0% 80.0% 60.0% 60.0% 60.0% 40.0% 40.0% 40.0% 20.0% 20.0% 20.0% 0.0% 2nd Line 3rd Line 0.0% 2nd Line 3rd Line 0.0% 2nd Line 3rd Line China US EU5 Japan Fewer lines of therapy may reflect fewer treatment options, but also inability to access available options or a preference for alternative therapies Source: Kantar Health / Draco, CancerMPact Treatment Architecture, accessed March 15, 2013. 18
Implications for development in China Understand the available patient population Despite the large population of China, lower diagnosis rates and patient access to care will significantly reduce the size of the available cancer patient population In general, urban cities (Tier 1) and Level 3 hospitals represent the vast majority of patients that are likely to seek treatment with new oncology agents While there is a large population of cancer patients in China, several factors (such as not being diagnosed or not having access to care) shrinks the actual potential patient pool for pharma. Population Diagnosed Access to Care 19
Implications for development in China Understand the available patient population Cost of therapy is a significant factor for drug adoption, with even wellestablished global standards of care capture only minimal share in China Herceptin, MabThera, and Avastin are examples of premium cost biologics that have not gained significant utilization in China Alternatively, drugs with Chinese generic alternatives (such as Xeloda) or those with well-designed Patient Assistance Programs (PAPs, such as Iressa) have been successful in gaining moderate-to-high utilization in China 20
Implications for development in China Understand the available patient population Cost of therapy is a significant factor for drug adoption, with even wellestablished global standards of care capturing only minimal share in China Divergent standards of care globally need to be understood fully, to guide China-specific clinical trials, physician education, and effective sales training Drug therapy may be significantly different in China than G7, but choice of modality treatment may also vary and can have a major impact on drug adoption 21
Implications for development in China Understand the available patient population Cost of therapy is a significant factor for drug adoption, with even wellestablished global standards of care capturing only minimal share in China Divergent standards of care globally need to be understood fully, to guide China-specific clinical trials, physician education, and effective sales training Biomarker testing for patient selection for targeted agents should be developed effectively Complex and/or expensive assays may meet with resistance if patients cannot afford the out-of-pocket costs or if the test is not reproducible across multiple hospitals Understanding the complexities and limitations of the Chinese oncology market is critical for commercial success of any new drug therapy 22
Implications for development in China Thank you! 23