Looking ahead to the "epidemic" : Five major issues that China's biopharmaceutical enterprises need to pay attention to

In the past few months, China's biopharmaceutical industry has been hit by unprecedented shocks. After speaking with executives from leading multinational and local biotech companies, as well as other leading market experts, I summarized the impact of COVID-19 on the present and future. As our understanding of the coronavirus and its effects continues to deepen, the perspectives shared in this article will also change. As always, I welcome your valuable comments and discussions with me.

Let's start with the response of the biopharmaceutical industry and the impact of the COVID-19 pandemic. Although the current data is still insufficient, but combined with the industry status and qualitative analysis of the insights obtained, some trends are clear.

◆ Market supervision actively intervenes, and the approval of new drugs is "green" during the epidemic. From January to March 2020, the State Drug Administration approved 164 drug applications (including new innovative drugs, indication extensions and generic drug applications), far exceeding the 141 in the same period in 2019. In order to advance the reform of the medical device review and approval system, the State Food and Drug Administration approved the registration of Allergan's XEN® gel stent through Real World Evidence for the first time. The National Healthcare Security Administration and the National Health Commission jointly issued a guideline on promoting "Internet Plus" medical insurance services during the COVID-19 prevention and control period. The government has also required second - and third-level hospitals to make appointments in advance, encouraged patients to visit community health centers, and established a network of fever clinics (there are 182 in Shanghai alone).

The decline in patient attendance has also brought many changes to large hospitals and cities. Early analysis showed that the number of outpatient visits decreased by about 60% in February after patients canceled non-essential visits (based on preliminary data reported by the China Pharmaceutical Market Research Association). In addition, more patients are turning to new channels for treatment options or prescriptions, which mitigated the actual impact of the decrease in patient attendance. Retail channels have benefited from this trend, and Internet hospitals have also benefited from the online transformation and regulatory changes, including a pilot program to include online prescriptions in Medicare.

◆ Biopharmaceutical companies' sales have not suffered significantly. A survey of 690 hospitals showed that by the end of February, sales of hospital prescription drugs were down 17 percent from a year earlier. By contrast, sales in industries such as automobiles or luxury goods have fallen by as much as 70 to 90 percent. That said, some drugs have been hit hard. Drugs that are new to the market or need to be initiated in hospitals are the first to bear the brunt, while established drugs for chronic diseases have managed to reduce the significant impact of the epidemic by taking advantage of changes in the prescribing mechanism (long-term prescriptions can be issued for three months at a time) and changing distribution channels. Drugs related to elective surgery or elective treatment have been hit hard, similar to what we have observed in the medical technology sector (the number of elective surgeries decreased by 50% to 80% in February and March this year). In short, the pharmaceutical market has held up relatively well. With the continuous opening of hospitals, the confidence of patients is gradually restored, and the market will gradually pick up.

◆ The digital medical industry as a whole has shown an amazing speed of response and action. Companies such as Ping An Good Doctor, Tencent Wedoctor, Ali Health, Baidu and Jingdong Health have used existing platforms to launch new services or optimize existing services in a very short period of time, significantly boosting online traffic, many of which are newly registered elderly users. Multinational biopharmaceutical companies are riding the wave, reinvigorating idle workforces and dramatically increasing the engagement of healthcare professionals and patients through digital initiatives and business expansion. Some biopharmaceutical companies have also developed applications to help patients access drugs through other channels, such as transferring patients undergoing cancer treatment to infusion centers. In February, when the epidemic was at its worst, several new drugs were released exclusively through online channels such as large network conferences. In short, biopharmaceutical companies have accomplished in a matter of weeks what would otherwise have taken years: mobilizing across the organization, diverting significant resources to digital channels, launching new projects, and tapping into the customer acquisition and engagement potential of digital channels.

Compared with the SARS period, the innovation of China's biopharmaceutical industry is very rapid this time. Many companies are racing to develop effective drugs, design faster and more accurate tests, and accelerate the development of a viable vaccine. Cancino Bio (listed on the Hong Kong Stock Exchange in 2019) has made rapid progress in the development of COVID-19 vaccines and has now entered phase 2 clinical trials. Sinovac and Sinopharm are also actively promoting the research and development of safe and effective vaccines, joining the United States and Europe in the "Global vaccine research and development competition."