Written by Hanzhong Bai, Edited by Natasha Barrow and Daniele Guido.
On November 3rd 2021, the Chinese National Healthcare and Security Administration (NHSA) announced updates on the National Reimbursement Drug List (NRDL). Out of the 85 new drugs being negotiated, 67 made it to the NRDL, with an average price drop of 61.7% (1). Of note was one drug, Spinraza (molecule name Nusinersen), which saw a 95% price slash from CNY 700,000 (US$108,500) to CNY 33,000 (US$5,180) per dose. Treating spinal muscular atrophy (SMA), Spinraza will be the first reimbursed medicine for this rare disease that affects only one in every 8 thousand new-borns in China (2).
While people were astonished at the drug’s initial offering price, floods of questions arose as to the motivation behind this major price slash. Suicidal? Political coercion? Or is the multibillion pharmaceutical conglomerate that is Biogen, actually a charity-oriented organisation with a heart of gold? To help you understand the drivers behind this radical price adjustment, this article will walk you through Spinraza’s life trajectory in China, and hopefully provide novel insights that you never read elsewhere.
Spinraza was born in a long line of work by laboratories from University of Massachusetts Medical School, Cold Spring Harbour Laboratories and Ionis Pharmaceuticals (3). In 2015, it was licensed to Biogen, who spearheaded the clinical development and acquired FDA approval of the drug in December 2016 (4).
Spinraza was the very first treatment available for SMA patients, who suffered from chronic muscle atrophy (loss of strength and mass) due to degradation of motor neurons (5). Over 95% of SMA cases (5q-SMA) are caused by loss or mutation of the survival motor neuron 1 (SMN1) gene, which produces 90% of the survival motor neuron (SMN) protein in human bodies and is essential to motor neuron survival (6). The rest 10% comes from a paralogous gene SMN2, which encodes the same SMN protein yet at significantly decreased efficiency due to defective splicing of exon 7 (7).
The way Spinraza treats SMA is rather fascinating: it consists of 18 nucleotides that bind specifically to exon 7 of the SMN2 gene and corrects its splicing, thereby dramatically boosting the production of SMN proteins to prolong motor neuron survival(Figure 1) (7). Since Spinraza doesn't target the SMN1 gene, it is robust to genetic variations of SMA patients, rendering it widely applicable to all four subtypes of the SMA disease (2).
The long-suffering SMA patients embraced Spinraza with open arms, and so did the market. Despite its exorbitant list price of US$125,000/dose, Spinraza managed to score US$884M revenues within a year of launch, which accounted for 7.2% of Biogen’s whole year revenue in 2017 (8).
Figure 1 Mechanisms of Spinraza (source: BIogen Inc. How Spinraza Works [Internet]. Spinraza-HCP [Internet]. Figure 1 2021 [cited 2022 Apr 18]. Available from: https://www.spinraza-hcp.com/en_us/home/why-spinraza/how-spinraza-works.html)
SMN2 gene is present in almost everyone in at least one copy. Spinraza anneals to the intronic splicing silencer N1 (ISSN1) of exon 7 within the SMN2 pre-mRNA and disrupts ISSN1’s interaction with negative splicing regulatory proteins. (9) As a result, exon 7 is retained in the spliced mRNA, which subsequently translates into full-length SMN proteins and improves motor neuron functioning.
Despite its superior medical efficacy and market exclusivity, Spinraza quickly faced patient access challenges globally – nobody wanted to pay such high prices. Unlike the US where drug free pricing is permitted and private insurance schemes prevail, many developed nations have publicly funded health systems that remain the single biggest domestic healthcare payer. Already knees-deep in fiscal quagmires, these public healthcare systems simply cannot afford US$500k/person/year treatment plans that persist throughout Spinraza patients’ lives.
In 2018 NICE, the UK’s National Institute for Healthcare and Excellence, appraised the cost-effectiveness of Spinraza in UK with Biogen’s proposed list price of £75,000 per vial (treatment cost £450,000 for the first year and £225,000 for subsequent years) (10). NICE acknowledged that "Spinraza significantly improves survival for people with early-onset SMA" and "substantially improves motor function for people with later-onset SMA". However, it argued that the long-term efficacy of Spinraza was unclear and predicted Spinraza’s incremental cost effectiveness ratio (ICER) to range between £400,000 and £600,000 per quality adjusted life year (QALY) gained, which is 3-5 fold higher than NICE's threshold (10) (see below an explanation of ICER and QALY).
As a result, NICE decided not to recommend Spinraza for treating spinal muscular atrophy in the UK (11). Although Biogen managed to strike a managed access agreement (MAA) with NHS in 2019, the deal negotiated a discounted price for Spinraza and excluded Type IV and certain Type III SMA patients (12).
If a developed country like UK finds Spinraza cumbersome, what must the dilemma be like in China?
With a population of 1.4 billion and GDP of US$13.4 trillion, China is the world’s fastest growing economy by scale and holds the second largest healthcare market estimated at US$1.1 trillion (data in 2019) (14). For a successful global drug launch, no pharmaceutical companies could overlook the massive Chinese market, especially not Spinraza. Statistically, East Asians have the second highest carrier frequency of SMA. Coupled with China’s humongous population, it’s estimated that China has approximately 30,000 SMA patients, making it the single largest market for Spinraza (15).
In recent years, China is also paying more attention to the traditionally overlooked rare disease segment, and has implemented a series of policies in favour of rare disease drugs. Of note is the expedited/priority evaluation pathway and rare disease conditional approval by the National Medical Products Administration (NMPA, a.k.a China’s FDA), and the proportion of innovative/rare-disease therapies in the NRDL has also increased. Among the new inclusions are many big brand names, such as the MS drug Siponimod by Novartis, and the PD-1 lung cancer drug Sintilimab by Innovent Biologics and Eli Lily (1, 16, 17). In 2020 alone, 14 western therapies obtained NMPA approval and NRDL re-imbursement in the same year, marking a clear focus of NRDL on innovative therapies for unmet medical needs (17).
However, most drugs saw major price concessions upon NRDL entry, with an average of 62% price drop distributed in the 74 new additions of 2021 (18). Such drastic price cuts are ascribable to NRDL’s strong procurement and bargaining power. Behind NRDL is the China Healthcare security (CHS), which remains the biggest healthcare provider in China and accounts for 56.6% of total medical expenditure in 2020. In comparison, private insurances/funds make up only 7.6% of total expenditure and ranks the third biggest component after patient out-of-pocket (OOP) payments (35.8%) (19). Additionally, NRDL centralises drug procurements at the national and provincial level and has unmatched access to the 11930 public hospitals and 507140 public medical facilities in China, which together generated 93% of the healthcare sector’s revenue in 2019 (20). Therefore, despite major price cuts, NRDL inclusion remains the most important patient access channel in China, and significantly drives sales revenue for the majority of inclusions (21).
In 2019, Spinraza achieved NMPA approval within 7 months under the priority review pathway, becoming the first available SMA drug in China (22). Initially listed at CNY 700k/dose, it was China’s most expensive therapy and cost CNY 4.2M for first year’s treatment and 2.1M in the following years. In 2020, Spinraza applied to NRDL and actually passed pro forma reviews, however, the price proffered by Biogen did not pass cost-benefit reviews, and Spinraza failed to reach the final negotiation round (23).
Without the reimbursement by NRDL, Spinraza turned to other channels of patient access. In the public funding sector, Spinraza managed to be listed in quite a few City Health Insurances (CHIs) that are endorsed by local governments. For example, Spinraza is covered by an insured sum of CNY 100k in the port city Tsingtao, and this number is increased to CNY 1M in Guangzhou (24, 25). In some provinces/municipalities, Spinraza also tapped into the critical disease insurance and rare disease fund, and negotiated reimbursement price as low as CNY 30k and 100k in Jiangsu and Chengdu, respectively (26, 27). There is no doubt such funding programs improved patient access; however, all programs had clear regional restrictions and are not accessible to the vast majority of Chinese population.
Private funding opportunities, on the other hand, were far from enough too. Due to its rare nature, SMA is not covered by most commercial healthcare insurances. According to data from Huize, a leading Chinese online insurance platform that trades on NASDAQ (SYMBOL: HUIZ), only three insurances list Spinraza in their drug formularies and none of them accepts patients with pre-conditions (28).
Perhaps Biogen realised Spinraza’s list price was way out of the league of the general Chinese public, it collaborated with the China primary healthcare foundation to launch a patient access programme (PAP) in 2019. Under the PAP’s “Gift Medicine” policy, patients could receive five free doses in the first year and two in the following years, which meant patients would only pay for one dose per year (29). In early 2021, Biogen further dropped Spinraza’s list price to 550k/dose, bringing down Spinraza’s price to effectively CNY 92k/dose after PAP. However, neither the PAP nor the price drop really resolved Spinraza’s affordability problem. PAP only recruited 120 some patients in its first phase of rollout from May 2019 to December 2020, and Spinraza’s total patient number was estimated at 400-500 as of 2021 (30, 31). When compared to the estimate of 30,000 SMA patients in China, it seemed Spinraza’s market access was reduced to nothing but a skeleton.
(Keep an eye out for Part 2 of the story on our website: Behind Spinraza's 95% price drop in China: Desperate or well-thought-of? Part 2)
1. General Office of the Ministry of Human Resources and Social Security. 国家基本医疗保险、工伤保险和生育保险药品目录(2021年) [Medicines List for National Basic Medical Insurance, Work-Related Injury Insurance and Maternity Insurance(2021)] [Internet]. 2021 Nov [cited 2022 Apr 18]. Available from: http://www.gov.cn/zhengce/zhengceku/2021-12/03/content_5655651.htm
2. Biogen Inc. Official HCP HomePage | Spinraza (Nusinersen) | HCP. https://www.spinraza-hcp.com/?cid=aff-spinraza-header_visithealthcareprofessionalsite-spinrazahcp_hp. 2022.
3. Garber K. Big win possible for Ionis/Biogen antisense drug in muscular atrophy. Nature Biotechnology. 2016 Oct 11;34(10):1002–3.
4. Biogen Shells Out $75M to Develop Ionis’ Nusinersen after Positive Phase III Results. Genetic Engineering & Biotechnology News (GEN) [Internet]. 2016 Aug 1 [cited 2022 Apr 18]; Available from: https://www.genengnews.com/news/biogen-shells-out-75m-to-develop-ionis-nusinersen-after-positive-phase-iii-results/
5. Genetic and Rare Diseases Information Center (GARD) – an NCATS Program. Spinal muscular atrophy [Internet]. 2021 [cited 2022 Apr 18]. Available from: https://rarediseases.info.nih.gov/diseases/7674/spinal-muscular-atrophy
6. Brzustowicz LM, Lehner T, Castilla LH, Penchaszadeh GK, Wilhelmsen KC, Daniels R, et al. Genetic mapping of chronic childhood-onset spinal muscular atrophy to chromosome 5q1 1.2–13.3. Nature. 1990 Apr;344(6266):540–1.
7. Passini MA, Bu J, Richards AM, Kinnecom C, Sardi SP, Stanek LM, et al. Antisense Oligonucleotides Delivered to the Mouse CNS Ameliorate Symptoms of Severe Spinal Muscular Atrophy. Science Translational Medicine. 2011 Mar 2;3(72).
8. Biogen Incorporation. 2017 Annual Report [Internet]. 2018 Feb [cited 2022 Apr 18]. Available from: https://investors.biogen.com/static-files/8cb6d155-963c-4282-83ca-013b642b341f
9. Singh NN, Howell MD, Androphy EJ, Singh RN. How the discovery of ISS-N1 led to the first medical therapy for spinal muscular atrophy. Gene Therapy. 2017 Sep 9;24(9):520–6.
10. National Institute for Health and Care Excellence. Single Technology Appraisal Nusinersen for treating spinal muscular atrophy [ID1069] Committee Papers [Internet]. 2019 Jul [cited 2022 Jun 20]. Available from: https://www.nice.org.uk/guidance/ta588/evidence/appraisal-consultation-committee-papers-pdf-6842813870
11. NATIONAL INSTITUTE FOR HEALTH AND CARE EXCELLENCE. Appraisal consultation document [TA588] Nusinersen for treating spinal muscular atrophy [Internet]. London; 2018 Aug [cited 2022 Apr 22]. Available from: https://www.nice.org.uk/guidance/ta588/documents/html-content
12. National Institute for Health and Care Excellence. SPINRAZA (NUSINERSEN) MANAGED ACCESS AGREEMENT (MAA) [Internet]. 2019 May [cited 2022 Apr 22]. Available from: https://smauk.org.uk/files/files/Research/The%20Managed%20Access%20Agreement%20FAQs%2019May20.pdf
13. National Institute for Health and Care Excellence. NICE health technology evaluations: the manual [Internet]. London; 2022 [cited 2022 Apr 22]. Available from: https://www.nice.org.uk/process/pmg36/resources/nice-health-technology-evaluations-the-manual-pdf-72286779244741
14. Australian Trade and Investment Commission, Intralink. China Healthcare Market: An Introduction [Internet]. 2021 [cited 2022 Apr 22]. Available from: https://www.intralinkgroup.com/en-GB/Latest/News/December-2021/China-Healthcare-Market-An-Introduction-free-ma
15. Verhaart IEC, Robertson A, Wilson IJ, Aartsma-Rus A, Cameron S, Jones CC, et al. Prevalence, incidence and carrier frequency of 5q–linked spinal muscular atrophy – a literature review. Orphanet Journal of Rare Diseases. 2017 Dec 4;12(1):124.
16. General Office of the Ministry of Human Resources and Social Security. 国家基本医疗保险、工伤保险和生育保险药品目录(2019年) [Medicines List for National Basic Medical Insurance, Work-Related Injury Insurance and Maternity Insurance (2019)]. 2019.
17. General Office of the Ministry of Human Resources and Social Security. 国家基本医疗保险、工伤保险和生育保险药品目录(2020年) [Medicines List for National Basic Medical Insurance, Work-Related Injury Insurance and Maternity Insurance(2020)]. 2020;
18. Continuing the push for innovation: Key learnings following China’s most recent NRDL update. remapconsulting [Internet]. 2022 Mar 1 [cited 2022 May 1]; Available from: https://remapconsulting.com/china-nrdl-update/
19. OECD. Health spending (indicator). 2022.
20. National Health Commission. 2020年我国卫生健康事业发展统计公报 [2020 Papers of Domestic Healthcare Development Statistics] [Internet]. 2021 [cited 2022 May 1]. Available from: www.nhc.gov.cn/guihuaxxs/s10743/202107/af8a9c98453c4d9593e07895ae0493c8.shtml
21. Bruce Liu SHIJDXSP. China 2021 National Reimbursement Drug List Outlook. PharmaExec [Internet]. 2021 Nov 11 [cited 2022 May 1]; Available from: https://www.pharmexec.com/view/china-2021-national-reimbursement-drug-list-outlook
22. INVESTOR RELATIONS BI. Biogen Further Expands Presence in China with Approval of SPINRAZA® (nusinersen), the First and Only Treatment for Spinal Muscular Atrophy [Internet]. 2019 [cited 2022 May 1]. Available from: https://investors.biogen.com/news-releases/news-release-details/biogen-further-expands-presence-china-approval-spinrazar
23. Wen Zhu. 医保谈判落幕：70万罕见病药企现身，百万CAR-T或未参与 [The NRDL Negotiation Closes: The Pharma Behind the 700k Rare Disease Shows Up, Yet the 1M CAR-T Therapy May Have Been Excluded]. 澎湃新闻 [Internet]. 2021 Nov [cited 2022 May 1]; Available from: https://j.021east.com/p/1636630222049289
24. 2022年广州惠民保特定自费药品目录 [2020 Guangzhou HuiminBao Special Drug Formulary]. 广州本地宝 [Internet]. 2022 Feb 1 [cited 2022 May 1]; Available from: http://gz.bendibao.com/life/2019122/256900.shtml
25. 琴岛e保正面药品清单 [Tsingtao Huiminbao Drug Formulary (Front Page)] [Internet]. Bendibao. 2021 [cited 2022 May 1]. Available from: http://m.qd.bendibao.com/live/63888.shtm
26. 新浪医药新闻 [Xinlang Pharmaceutical News]. 江苏省将五种罕见病用药纳入医保[NRDL Inclusion of 5 Rare Diseases in Jiangsu]. 生物谷 [Shengwu Valley] [Internet]. 2021 Jul 20 [cited 2022 May 1]; Available from: https://news.bioon.com/article/6789098.html
27. 成都市医疗保障局 [Chengdu Healthcare Security Administration]. 成都市医疗保障局《关于印发 成都市罕见病用药保障药品范围及认定标准 的通知》政策解读[Notice of the Chengdu Rare Disease Drug Reimbursement Scope] [Internet]. 2021 [cited 2022 May 1]. Available from: http://cdyb.chengdu.gov.cn/ylbzj/c128999/2021-03/18/content_a37cbb807a2c46d78d41e5e1de7ff91d.shtml#:~:text=%E5%9B%BD%E5%86%85%E8%8E%B7%E6%89%B9%E5%B7%B2%E4%B8%8A%E5%B8%82,%E5%8F%AF%E8%8E%B7%E5%BE%97%E6%8C%81%E7%BB%AD%E8%A7%84%E8%8C%83%E7%94%A8%E8%8D%AF%E3%80%82
28. Search Result of SMA Insurances on Huize [Internet]. Huize. 2022 [cited 2022 May 1]. Available from: https://search.huize.com/chanpin/%E8%84%8A%E9%AB%93%E6%80%A7%E8%82%8C%E8%90%8E%E7%BC%A9%E7%97%87
29. Beijing Life Oasis Public Service Centre. 脊活新生-脊髓性肌萎缩症SMA患者援助项目 [JiHuoXinSheng - SMA Patient Assistance Programme] [Internet]. 2019 [cited 2022 May 1]. Available from: https://www.ilvzhou.com/index.php?m=content&c=index&a=lists&catid=178
30. Yunqi Li. “小群体”的曙光！天价药谈成背后：国内过半罕见病药已进医保 [Dawn for the Minorities; Behind the negotiations of astronomically priced drugs - Over half of rare diseases have been included in the NRDL]. 新京报 [New Beijing Newspaper] [Internet]. 2021 Dec 3 [cited 2022 May 1]; Available from: https://www.bjnews.com.cn/detail/163852819514618.html
31. Bruce Liu JLJLDXMWSP. Maximizing China Access for Innovative Therapies. PharmaExec [Internet]. 2021 Dec 6 [cited 2022 May 1]; Available from: https://www.pharmexec.com/view/maximizing-china-access-for-innovative-therapies
Sign up for our monthly newsletter of upcoming events, recently published insights and SEC updates.