Sales swell of Chinese version of Viagra

By Xie Jun Source:Global Times Published: 2015-11-18 18:58:02

Domestic drug maker challenges foreign dominance in ED treatment

Until recently, foreign pharmaceutical giants had almost complete control over China's market for treating erectile dysfunction (ED). But in 2014, the patent for Viagra expired in China, opening the door for domestic drug makers to produce and market generic versions of the blockbuster drug. Guangzhou Baiyunshan Pharmaceutical Holdings Co became the first to do so with Baiyunshan Jinge, which went on sale in September 2014. Jinge has been a success for the company, which reported about 700 million yuan ($109.62 million) in sales for the drug in its first year, with its sales volume exceeding that of Viagra in China. Still, Viagra's maker, US-based pharmaceutical giant Pfizer Inc, retains its strong position in China's ED drug market, and consumers stand to benefit from the added competition.

Photo: CFP

In the year since the patent on Viagra expired in China, a Chinese drug maker has stepped up to challenge foreign dominance in the domestic market for treating erectile dysfunction (ED).

On Sunday, Guangzhou Baiyunshan Pharmaceutical Holdings Co (GBPH) marked the one year anniversary of Baiyunshan Jinge, a generic version of sildenafil citrate, the blockbuster drug that US-based pharmaceutical giant Pfizer Inc developed and marketed under the name Viagra.

With the launch of Jinge in September 2014, GBPH broke into the domestic ED market. So far, the generic drug has been a hit.

In its first year, Jinge's sales volume surpassed that of Viagra, and its sales revenue could reach 1 billion yuan ($157 million) by the end of 2017, Wang Wenchu, deputy director of Baiyunshan Pharmaceutical General Factory, said on Sunday at a press conference in Guangzhou, capital of South China's Guangdong Province.

ED treatment is a relatively new business in China. In 2000, Pfizer became the first company to market an ED drug in the country, though it was initially a tough sell. Since then, other foreign pharmaceutical companies have followed, and the market eventually took off.

When Pfizer's patent for Viagra in China expired in May 2014, it opened the way for domestic drug companies to create their own generic versions of the drug.

According to a report in the Economic Information Daily on July 1, 2014, about a dozen listed pharmaceutical firms in China had applied for the production of Viagra-like drugs.

Jiang Hui, director of the andrology department at Peking University Third Hospital, said he welcomed the evolution of the domestic ED drug market.

"It shows the market is expanding fast," he told the Global Times on Monday.

Overseas pioneers

In July 2000, a doctor at Peking University First Hospital became the first physician in China to prescribe Viagra to a patient, according to a report by the Economic Observer in October 2014.

Pfizer pioneered the ED drug treatment market in China. Being the first, it had access to a giant potential market that was free of competition.

However, it ended up taking time for conservative Chinese patients to come around. Sales were poor in the first few years after Viagra hit the market.

Many Chinese people were ignorant about ED treatment, Jiang said.

"A professor once asked me if he would die if he took Viagra," he added.

Pfizer had to team up with Chinese doctors to educate patients.

Eventually, Chinese patients got comfortable taking the drug, and the market began to pick up. In 2004, Bayer Group put its ED drug Levitra on the market, followed by Eli Lilly and Company with Cialis in 2005.

However, of all the foreign drug makers, Pfizer still has the best distribution channel in China, and Viagra continues to sell briskly, Jiang said. Even as the drug's sales fell about 10 percent globally in 2014, its sales in China surged 47 percent, its fastest rate ever.

"It would be unusual for any drug to have annual growth of more than 20 percent," Jiang said. "Viagra's growth in 2014 shows that market demand for the drug has continued to grow in China."

Generic competition

As Pfizer was the first into China with a brand-name ED drug, GBPH was the first to market a generic drug. Jinge has the same dosage, quality, strength and intended use as Viagra, but it sells for less than half the price.

As of Sunday, Jinge's sales exceeded 700 million yuan over the previous year, according to a sales report that GBPH sent to the Global Times.

GBPH also benefits from a well-developed distribution system that includes pharmacies almost everywhere on the Chinese mainland, a senior GBPH executive, who asked not to be named in print, told the Global Times on Monday.

The executive said that the drug will continue to be sold primarily at pharmacies for the time being, though the company has been taking steps to make it available at hospitals too.

At Sunday's press conference, Wang stressed that Jinge was as effective as Viagra, but was priced about 60 percent cheaper, or 48 yuan a pill.

Wang Zhenxing, a purchasing manager at YXT Pharmaceutical Chains, a retail drugstore in East China's Shandong Province, told the Global Times on Monday that Jinge accounts for about 70 percent of the store's ED drug sales.

However, a pharmacist at a Kant Le pharmacy in Shanghai said that their customers still trusted overseas ED drugs more.

Still, GBPH may have the advantage in marketing.

"Compared with overseas companies, domestic firms such as GBPH have more flexible marketing strategies, such as online sales and coupons," Jiang said.

A livelier market

With the success of Jinge, questions arose as to whether domestically produced drugs would come to dominate China's ED drug market. But Jiang said Viagra still holds a powerful position in the market. He predicted its sales would slow, but annual growth would still reach about 38 percent.

Although Viagra now has a rival from China, the competition will benefit the consumer.

"It's hard to say whether one of the two, Jinge or Viagra, is better, but customers now have more choices and that makes for a livelier market," he noted.

He also said that Pfizer has taken some steps to defend its market share, such as lowering the price of Viagra.

Pfizer didn't respond to an interview request from the Global Times by press time.

A GBPH employee surnamed Guo said that the emergence of Jinge does not mean that domestic ED drugs would flood the market, as the government might become stricter about approving domestically produced ED drugs.

Changzhou Yabang Pharmaceutical Co, based in East China's Jiangsu Province, also has a generic version of Viagra on the market, called Wanfeile. But the drug has received little publicity. Currently, China's ED drug market is also limited by factors such as government policy.

But those limitations also show that the market has a lot of room to expand, and such an expansion would bring opportunities for both domestic and overseas drug makers, Jiang said.

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