The China unit of US pharmaceutical giant Merck, Sharp & Dohme Inc. (MSD; NYSE: MRK) is reportedly streamlining its diabetes business through redundancies, according to local media outlet Yicai. This move is a response to the anticipated impact of the inclusion of its sitagliptin and other drugs in China’s volume-based procurement (VBP) scheme.
Impact on MSD’s Diabetes Portfolio
MSD’s diabetes portfolio, which includes sitagliptin, sitagliptin/metformin, and ertugliflozin pidolate, has seen a significant decline in global sales. The company’s Q3’24 financial report indicates a 49% and 13% year-on-year decrease for sitagliptin and sitagliptin/metformin, respectively.
VBP Scheme and Market Competition
Both sitagliptin in an oral regular-release dosage form and sitagliptin/metformin were part of the 10th round of VBP. Over 30 and 15 domestic manufacturers in China have passed the generic quality consistency evaluation (GQCE) for their generic versions of these drugs. Some analysts view the VBP program as likely to intensify market competition for originators from generics. The relatively small difference in online procurement prices between diabetes originators and generics does not necessarily imply that domestic generic companies are more willing to reduce prices. Hospitals are expected to continue preferring the originators, although the in-hospital sales volume may be affected regardless of the bid outcome.-Fineline Info & Tech
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