Domestic market withdrawal of Forxiga remains a mystery

Will AZ forego annual KRW 50 bil mkt and discontinue the domestic market?

Industry "Unusual case…withdrawal of an original drug that grosses KRW 50 bil a year in from the domestic market"

In contrast with Januvia, for which the marketing rights were sold to a domestic company before patent expiry

AZ’s official stance, "portfolio overhaul"... industry interest in AZ’s future activities

Pic of Forxiga

AstraZeneca’s decision to withdraw its SGLT-2 inhibitor diabetes drug Forxiga (dapagliflozin) from the Korean market is being considered an unusual move by the industry.

 

This is because the decision to pull out of the Korean market would essentially mean giving up KRW 50 billion in annual sales for AstraZeneca.

 

While AstraZeneca's official position is that the decision is part of the company’s "portfolio overhaul," the mysteries surrounding the decision are not expected to be resolved anytime soon.

 

Therefore, the industry's eyes are on AstraZeneca's next move, especially as it has been in stark contrast with MSD’s treatment of Januvia (sitagliptin).

 

MSD Korea, which had faced a similar situation with Januvia, had sold its domestic sales rights for a large sum to a Korean company.

 

#SB Company suddenly decides to withdraw ‘Forxiga,’ whose prescription sales exceed KRW 50 billion from the Korean market#EB According to industry sources on the 12th, AstraZeneca Korea decided to withdraw Forxiga from the Korean market.

 

The withdrawal is limited to the single-agent drug Forxiga.

 

Its metformin combination Xigduo, sitagliptin combination Sidapvia, and saxagliptin combination Qtern will continue to be supplied through local pharmaceutical companies.

 

Forxiga is an SGLT-2 inhibitor class diabetes drug.

 

It was approved in Korea in 2013.

 

Since then, it has rapidly increased its prescription sales.

 

The annual prescription amount for the drug exceeded 30 billion won in 2019 and reached the 50 billion won mark last year.

 

Yearly prescriptions of Forxiga (Unit: KRW 100 million, Data: UBIST).

In Korea, it had dominated the SGLT-2 inhibitor market with Boehringer Ingelheim Korea’s 'Jardiance empagliflozin).’ Among single-agent drugs, prescriptions had been KRW 51 billion for Forxiga and KRW 48.3 billion for Jardiance last year.

 

Sales of Astellas' Suglet (ipragliflozin) and MSD's Steglatro (ertugliflozin) accounted for less than KRW 5 billion during the same period.

 

The joint sales agreement AstraZeneca had made with Daewoong Pharmaceutical is said to have contributed to the increase in prescription performance in Korea.

 

Daewoong has been jointly selling Forxiga since 2018.

 

The agreement between the two companies will end at the end of this year.

 

Forxiga's rise to prominence hit a major inflection point earlier this year.

 

Forxiga’s substance patent expired in April.

 

More than 60 pharmaceutical companies launched generic versions of Forxiga upon patent expiry.

 

This coincided with reimbursement for the use of SGLT-2 and DPP-4 inhibitor combinations, heralding a very fierce competition between the original and generic companies.

 

AstraZeneca Korea deployed an aggressive defense strategy to maintain Forxiga’s position in the market.

 

It filed an administrative appeal against the price reduction made upon entry of the generic version.

 

At the same time, it applied for an injunction for the stay of execution of the government's price reduction.

 

The court granted the request.

 

As a result, the price of Forxiga is set to remain at the same level until February next year.

 

AZ "Drug price reduction disposition unreasonable”…U-turns its stance after half a year The enforcement order was cited on June 1.

 

However, just over 6 months later, AstraZeneca Korea decided to withdraw Forxiga from the Korean market.

 

This is a 180-degree turnaround for the company, as this means the company decided to abandon Forxiga just half a year after it challenged the Ministry of Health and Welfare's decision to lower the drug's price with an administrative lawsuit.

 

AstraZeneca's official position is that it is "discontinuing the domestic supply of Forxiga to realign the company's portfolio." On the surface, this seems to indicate that the company intends to reorganize its portfolio around anti-cancer drugs such as Tagrisso, Imfinzi, and Lynparza and focus on related businesses.

 

In the industry, there are also assumptions that the market withdrawal decision was driven by the rush of generics that entered upon patent expiry and the pressure of excessive competition.

 

Others argue that AstraZeneca Korea has exhausted resources and accumulated fatigue negotiating with the government to expand reimbursement for its Forxiga and other key products such as Tagrisso.

 

However, those who believe otherwise point to how Forxiga's influence in the market remains strong even though more than 60 companies have launched generic versions of the drug.

 

In fact, Forxiga's outpatient prescription performance has increased slightly YoY after the release of its generics.

 

In Q2, Forxiga's prescriptions totaled to KRW 14.1 billion, up 15% YoY.

 

In Q3, prescriptions increased 4% YoY to reach KRW 13.7 billion.

 

While generic products generated KRW 3.9 billion in prescriptions in Q2 and KRW 6.8 billion in Q3, they did so by opening up new markets rather than by taking over Forxiga's share.

 

Moreover, Forxiga’s indication was being expanded to not only diabetes but also heart failure and kidney disease.

 

Forxiga has recently added a series of indications.

 

They were for ▲ the treatment of heart failure with reduced ejection fraction (HFrEF), ▲ left ventricular ejection fraction/ heart failure with preserved ejection fraction (HFpEF)/heart failure with mildly reduced ejection fraction (HFmrEF), and ▲ chronic kidney disease (CKD).

 

Of these, the company had applied for the drug’s reimbursement in HFrEF and CKD.

 

The company was also reportedly conducting negotiations with the government for reimbursement extensions until recently.

 

From AstraZeneca's point of view, extending Forxiga's reimbursement to heart failure could have further increased the prescription amount.

 

In contrast with MSD's sale of Januvia rights … Competition will intensify to close the KRW 50 billion void The pharma industry focused on how MSD decided to sell Januvia’s domestic sales rights before patent expiry.

 

Pic of Januvia

Januvia is a DPP-4 inhibitor class diabetes drug.

 

Januvia has various similarities to Forxiga, such as the fact that it is a flagship item with a prescription value of KRW 42.6 billion last year and a large number of generics were launched after its patent expiry in July this year.

 

In May, Chong Kun Dang signed a licensing agreement with MSD to acquire domestic rights for 3 products - Januvia, Janumet, and Janumet XR.

 

Chong Kun Dang will acquire all domestic sales, distribution, licensing, trademark, and manufacturing rights for the 3 Januvia series drugs.

 

The contract amount was 45.5 billion won.

 

Chong Kun Dang paid MSD an upfront payment of KRW 23 billion and additional milestone payments of KRW 22.5 billion based on sales performance.

 

MSD made a considerable profit by handing over all domestic rights for the antidiabetic drugs to Chong Kun Dang ahead of Januvia's patent expiration, at a time when generics were expected to be launched.

 

The deal was seen as a win-win, as MSD could focus on sales and marketing of its other products instead of competing with domestic drugmakers, and Chong Kun Dang could secure a stable cash cow that brings in over KRW 100 billion a year.

 

On the other hand, AstraZeneca made a contrasting move, deciding to withdraw from the Korean market instead of selling the rights for Forxiga to a Korean company.

 

The company had made no moves to sell Forxiga's domestic rights to any company.

 

AstraZeneca also drew the line regarding its plans to resupply Forxiga in Korea.

 

An AstraZeneca Korea official said, "We have secured enough domestic supply to last until the first half of next year.

 

We are discussing patient protection measures with the Ministry of Food and Drug Safety.

 

However, at this time, we are not considering resupplying the drug after the first half of next year."