China’s HIV Drug Market Revenue to Plummet 65% by 2020

Thursday 7 February 2013, Amsterdam

A growing generics sector, combined with the introduction of compulsory licensing, will lead to a dramatic revenue drop in China’s HIV therapeutics market in the near future, predicts research and consulting The company’s latest report* forecasts HIV drug sales in China to fall from a 2012 valuation of US$374m to US$129m in 2020 at a negative Compound Annual Growth Rate (CAGR) of 12.5%. The primary factor in this expected revenue depreciation is the increased dominance of generic drug use amongst Chinese physicians. Before the end of the decade, patents for key HIV drugs including AbbVie’s Norvir, Janssen’s Prezista and Merck’s Crixivan are due to expire, leaving the market open to the entrance of much cheaper generic variants.We estimate that a generic version of ViiV’s Epzicom will enter the Chinese market in 2016, followed by Gilead’s Truvada and Atripla drugs in 2018. However, China’s recently amended intellectual property laws could mean these treatments – if declared to be of public interest – face compulsory licensing before their respective patent expiration dates. Compulsory licensing will make HIV drugs available to a much larger segment of the HIV positive population. China is adopting aggressive healthcare policies to identify newly infected people and connect them with the appropriate level of treatment to limit viral transmission. Use of branded drugs would result in an increased financial burden for the Chinese government, but compulsory licensing can potentially make treatment for all infected people a reality. However, while the adoption of compulsory licensing potentially increases the size of the treated population, it limits the attractiveness of the market for pharmaceutical companies. Our new report forecasts the global HIV therapeutics market to decrease in value from US$11.4 billion in 2012 to US$10.8 billion in 2022, representing a negative CAGR of 1% over the 10 year period.