The Chinese Government’s significant R&D investments in recent years has resulted in the successful commercialisation and launch of several domestically developed therapeutic agents. The R&D of immune checkpoint inhibitors (ICIS ) has been a particular focus, given the prevalent use of these agents across multiple oncology indications and the prohibitive cost associated with their use. GlobalData predicts that 2021–2023 will be characterized by multiple approvals for Chinese ICIs which will result in a dramatic change in the oncology treatment landscape in China. Approvals of domestically developed ICIs may not be confined to the Chinese market, as the establishment of global strategic partnerships and licensing deals suggests the introduction of Chinese domestic drugs into Western markets.

The Chinese market has historically been a target for a third wave of revenue generation for Western brands after gaining market access in the US and Europe. However, in the last decade a mixture of local R&D investment, regulatory reform and international partnerships have accelerated Chinese capabilities for drug commercialisation and the generation of domestic brands.

Domestic products are promoted in China by inclusion on the National Reimbursement Drug List (NRDL) and are subsequentially heavily discounted compared with international brands, creating a significant commercial advantage. For example, several domestic checkpoint inhibitors approved since 2018 have been placed on the NRDL and are subject to significant discounts (up to 75%) compared with their international counterparts.

International ICI brands seeking market access in China are now required to balance diminishing drug prices with the opportunity to target an enormous patient pool or identify underserved markets where local brands are not available and pricing pressures are less restrictive. Table 1 highlights all domestically developed Chinese ICIs in Phase III development. Tuoyi, Tyvyt, tislelizumab and camrelizumab are the frontrunners, boasting the broadest clinical development programs spanning multiple oncology indications, potentially highlighting disease areas which will be subject to pricing pressures upon approval of these agents. Due to a fierce competitive landscape, established physician familiarity with international brands and severe pricing pressures, the commercial potential for domestic ICIs may be limited. However, international opportunities may provide additional revenue streams.

There has been a significant increase in deals where Chinese companies develop and commercialise innovative drug candidates developed by Western companies and where multinational companies will commercialise Chinese drugs outside of China. Recent examples in the ICI space include agreements between Shanghai Junshi Bioscience and Astrazeneca/Coherus Biosciences (Tuoyi), Innovent Biologics and Eli Lilly (Tyvyt), and BeiGene and Novartis (tislelizumab). These agreements partly highlight the shift in focus for Chinese start-ups from the Chinese market to international markets. It is unlikely there will be significant adoption by physicians in the US for Chinese domestic ICIs unless the efficacy data are exceptional, considering the significant brand loyalty for established international brands. However, in more cost-conscious markets the drugs could achieve significant adoption. In addition to a potential change in clinical practice, the emergence of heavily discounted Chinese ICIs in Western markets will likely provide pricing pressures for established ICI brands. The increasing partnership between the East and West is poised to change the global market dynamics in the ICI space and GlobalData expects these partnerships to be the beginning of more collaborations.