Vas Narasimhan wants Novartis to have a big focus on China. Here’s what that looks like
As China secures a spot in every multinational pharma giant CEO’s mind with its enormous market and rapid regulatory reforms, Novartis’ Vas Narasimhan is ready to set clear goals
Briefing investors on an earnings call, Narasimhan mapped out one of the most detailed cases for ramping up sales of new drugs in China. Reiterating a goal to score 50 NDA approvals between 2020 and 2024, he notes:
That’s a doubling of the rate we’ve had over recent years, and our goal is to deliver greater than 90% of our 2024 and beyond China submissions simultaneously with global submissions.
It also means doubling the sales from the range of $2.2 billion over the next five years.
Novartis is making the pivot not only because it can — the company has 13 NME approvals over the past five years and 22 NRDL listings since 2017 under its belt — but partly because it must. Under new procurement rules, older branded drugs are being squeezed by much cheaper generics manufactured by domestic competitors. Even when the legacy pharma players do win the bidding, it often comes with a steep discount.
Last April, Eli Lilly offloaded its antibiotics business in China “to better focus our resources on the exciting new therapies that we are launching in our core therapeutic areas.”
AstraZeneca, another global drugmaker that’s signaled big interest in China, has indicated that it expects new and innovative treatments to bring in 60% of its China revenue by 2024, up from just a fraction now.
That’s not to say they can charge as much as they want for the novel drugs, either. Eli Lilly and partner Innovent demonstrated with their PD-1 recently just how far some companies are willing to get coverage on the national reimbursement list. On the other hand are drugmakers like Merck, which came away from the negotiations without a deal with the government, possibly because they felt the discounts wouldn’t be worth it.
Roche boasted in its annual report that its differential pricing model has helped “expand access to vital cancer drugs massively in China.”
For now, Novartis seems keen on the NRDL route. But whichever way it goes, the top team is painting a bullish scenario — especially in cancer.
“We aggressively shifted investments to our growth drivers to our launches and pre-launches to really invest early and also approved an investment case for China,” Susanne Schaffert, president of Novartis Oncology, summed up. “And the growth really could more than compensate for generic impact we saw in 2019, mainly from Afinitor and Sandostatin LAR in Europe and Exjade/Jadenu in the US.”