(Yicai) Feb. 12 -- Italian drugmaker Recordati decided to pull out of the Chinese market because commercial uptake of its rare disease drugs did not meet expectations, according to a person familiar with the matter. 

Milan-based Recordati had already planned to exit China prior to negotiations for inclusion in the country’s national health insurance reimbursement catalog in December, mainly due to “market development falling short of expectations,” the insider told Yicai.

Recordati Beijing Pharmaceutical announced on Jan. 9 that it had completed the filing process for liquidation and would cease all operations in China, following its failure to secure inclusion in the catalog.

Recordati Beijing received approval in 2021 to supply osilodrostat, a proprietary treatment for Cushing’s syndrome, through the Boao Lecheng International Medical Tourism Pilot Zone in China’s southern Hainan province. But since being introduced, only 29 patients have used the drug, the filing said.

The company estimates that China has about 44,000 adult patients with Cushing’s syndrome -- a serious condition caused by prolonged exposure to high levels of cortisol -- but about 90 percent percent undergo surgery as the first-line of therapy, leaving only about 3,100 who have postoperative recurrence, poor surgical outcomes, or are unsuitable for surgery.

The average time for diagnosing Cushing’s syndrome in China is three to five years, as the early symptoms are subtle and scattered, so patients need to visit various clinical departments before diagnosis, doctors told Yicai.

Osilodrostat’s pricing has also posed a challenge. While the one-milligram tablets sold in the Chinese mainland are priced at the lowest level globally, the effective per-milligram price of the 10-milligram pills in Hong Kong is nearly one-quarter lower than in the mainland.

Had the mainland price per milligram been lowered to the Hong Kong level, the National Healthcare Security Administration may have been more inclined to include the drug in the health insurance reimbursement catalog, according to the head of a patients’ organization. 

Set up in 2021, Recordati Beijing’s management team largely lacked a rare disease background. The firm relied heavily on public medical insurance coverage, overlooking the broader policy shift of recent years toward multiple payment methods beyond a single national reimbursement list.

In addition to osilodrostat, Recordati Beijing has two other products approved in China. Carglumic acid dispersible tablets have reached just over 100 patients in nearly two years, while long-acting pasireotide had yet to enter commercial distribution.

China added 114 new drugs to its national health insurance reimbursement catalog last year and 19 innovative drugs in the first version of the commercial insurance catalog, with rare disease drugs accounting for nearly one-third of the additions.

Editor: Futura Costaglione