Olivier Charmeil (Right) and Jialing Dai (Left)
As you know, China is reforming its regulatory system. How do you think these changes will shape Sanofi’s business model in China?
My takeaway is I've been here now for two weeks, and it's obvious that now things have significantly changed in terms of the famous time lag for new products between the US and China, which is not going to exist anymore in the future. And I can tell you that even internally, I think we can bet that within a few years, you could have new products reaching the market at the same time in the US as in China, which is a fundamental change.
The second thing is that of course the world is not going to change overnight, but we have been observing also some acceleration of products that are yet not registered in China. So, there are many, many fast-track reviews through clinical trial waivers, and we are benefiting from that. And we think that we will continue to. We have nine products potentially that could benefit from clinical trial waivers.
So, it's really an acceleration of the registration of some of our products. In other words, beyond the strategic intent, now it's being implemented.
The second important thing that you know of course that with regard to rare diseases there's been significant change beyond the regulatory aspects. There's been a new list of rare diseases that was issued in May last year. And second, you know that guidelines and diagnostics also were disclosed in February.
So, we see potentially that, again, here things are moving.
The next thing is going to be access, because rare diseases, such as oncology products, are products that are, in terms of price, much higher than primary care. And what I've been observing since last week is that the question of access is of course a question that is very much debated. A basic insurance mechanism can cover a lot of the cost, but significant co-pay will still exist.
So, we have been discussing and I've been hearing a lot of conversation about supplemental insurance, which is probably not easy for rare diseases. So, there's tension in the health care system in China where on the one hand there is more and more coverage, and on the other hand, a strong desire to get access to innovation. And I think all stakeholders have to find a way that the patients get access to innovative drugs and that the innovative companies get their fair part of the investments they have been making.
So, there are a lot of initiatives, and disease insurance, also. We hear and we see a lot of things, and I think that since the two last years have been very focused on the improvement of registration, our view is that there will be, again, a lot of conversation on access.
Is the rare disease business going to play a bigger role in China?
Rare disease is going to be an important part of our strategy. Aubagio in MS was approved in July 2018, and there will be new products that are going to be approved in the upcoming months. The question beyond registration is also going to be about the access. So, reimbursement is going to be key, but I understand, based on what was said by the National Health Council, that reimbursement is going to happen when the national reimbursement drug list is amended.
For us also, you probably remember that we made the acquisition of a biotech, Bioverativ, 14 months ago, as a portfolio in rare blood disorders. And of course, we are busy discussing with the authorities about making sure that we bring those products as soon as possible to the Chinese patients, and this is why last week I was in Tianjin where I visited one of the hospitals. More specifically, we have products for hemophilia A and hemophilia B, two products that are called Eloctate and Alprolix.
How do you see the GPO pilot system in 11 cities?
We’re looking into it. And you mentioned volume-based procurement in 11 cities. There is a need to find headroom for innovative products in oncology products or rare disease products. To balance the high price, you need to find headroom, and we understand the established-product portfolio is going to be impacted by the financial price.
So, we understand the evolution. The second thing is that what is important is that things are transitioned at the right speed. There are a couple of elements that are important. Ensuring continuity of supply is something that is very important. The second important element is making sure that Chinese patients get access to the right quality. And the last element which is very important as well is freedom both for the patients and for the physicians to get access to high-quality drugs.
We will see. You probably heard a lot of conversation about a reimbursement standard. Again, I think the system needs to transition and at the right speed so that at the end of the day, the patients continue to get access to high-quality drugs. And on the other hand, that some headroom is found in order to fund the innovative drugs.
What is China’s percentage of Sanofi's global revenue?
It's around 7 percent. It's a very large operation here. We have more than 9,000 people, close to 10,000. We want to continue to invest. As I was mentioning a bit earlier, we take a long-term view about China. This is why we have those three manufacturing capabilities, and we'll continue to invest.