Generic entries into the Xtandi mkt..prices polarize following the pricing reform

Existing capsule-formulation generics range from KRW 3,000-KRW 4,000…prices for generics subject to the new drug pricing reform drop to KRW 2,000 range

Listed prices for original drugs are maintained based on the 'flexible drug pricing contract system'…if tablets are launched, drug price polarization will intensify

Product photo of Xtandi

The drug pricing differences in the market for the blockbuster prostate cancer treatment 'Xtandi (active ingredient name: enzalutamide), which generates KRW 40 billion in annual prescription sales in South Korea, are expected to differ substantially among products with the same active ingredient.

After Xtandi patent expires at the end of June, generics entering the market under a new drug pricing system are expected to disrupt the existing pricing landscape.

"Cenzaluta", a capsule-formulation Xtandi generic for which Chong Kun Dang recently obtained marketing authorization, is expected to receive a 'lowest possible drug price' according to the newly reformed drug pricing system.

If the original drug's 'flexible drug pricing contract system', which only maintains the listed price, voluntary price reductions by existing generic companies, and price differences based on standard requirements, as well as the future launch of 'tablet generics' featuring improved dosing convenience, the polarization of drug prices and the landscape shift in the enzalutamide market are analyzed to intensify even further.

KRW 40 billion blockbuster 'Xtandi'… patent expiration and flexible drug pricing contract system

Astellas Pharma Korea's 'Xtandi' is a major prostate cancer treatment in the oral androgen receptor targeted agent (ARTA) class that blocks androgen receptor signaling. It is a blockbuster product that has become a standard therapy in major prostate cancer indications such as metastatic castration-resistant prostate cancer (mCRPC), generating over KRW 40 billion in annual prescription performance in South Korea alone.

With the expiration of the Xtandi substance patent at the end of June, Xtandi was subjected to drug price reduction regulations (a 53.55% reduction upon the entry of identical preparations, followed by a 70% premium rate for one year) as a large number of subsequent generic drugs were listed for reimbursement.

However, as the 'flexible drug pricing contract system' was applied for patient co-payment and global drug price defense, the official 'listed price' notified in the health insurance reimbursement list was maintained at the previous price of KRW 14,167 for the 40mg dose (same for tablets and capsules) and KRW 21,251 for the 80mg tablet.

While the listed drug price remains unchanged, the system has a special structure in which only the 'actual price' used for health insurance financing and distribution is settled at the 70% level (approximately KRW 9,917 for the 40mg dose) through a separate agreement with the National Health Insurance Service.

Nine existing enzalutamide 40mg soft capsule generic products listed as of June 28 were divided into three groups based on the drug price calculation criteria.

The highest-priced group at KRW 4,106 included GL Pharma (Proenza) and Alvogen Korea (Anamide), which met both the in-house bioequivalence study and registered active pharmaceutical ingredient (DMF) usage requirements to receive a 59.5% premium rate. These products are scheduled to be reduced to KRW 3,695 when the premium ends a year later on June 28, 2027.

The drug price for the generic group meeting one standard requirement is KRW 3,141. Six contract-manufactured products, including Dongkook Pharmaceutical (Entamide), Daewon Pharm (Enzadex), and JW Pharmaceutical (Thruenza), were listed at KRW 3,141 after receiving the previous calculation rate (45.52%).

In addition, Hanmi Pharmaceutical's 'Enzaron' voluntarily applied for an 'expected sales price' lower than the standard calculated price, highlighting patient economic feasibility, and was listed at KRW 3,434.

Capsule-formulation generics, the already started three-way split of drug prices…Chong Kun Dang's addition forecasts an 'lowest possible price' in the KRW 2,400 range'

Chong Kun Dang's "Cenzaluta Soft Capsule 40mg", which was approved on the 15th, is expected to have a significantly lower drug price than these. This is because the drug pricing system was reformed starting last August.

The Chong Kun Dang product is contract-manufactured and met only one standard requirement. Under the new drug pricing system, the base calculation rate for generics is reduced from 53.55% to 45% compared to the original, and the differential reduction margin for not meeting the requirements is increased from 15% to 20% (calculated at 36% if one requirement is met).

With this change, the maximum price of Chong Kun Dang's Cenzaluta would drop to around KRW 2,480. This is approximately 21% cheaper than the existing generics that met one requirement (KRW 3,141) and nearly 40% cheaper than the highest-priced generics (KRW 4,106).

As a result, by securing an ultra-low price about KRW 1,000 lower than the KRW 3,434 Hanmi Pharmaceutical, Chong Kun Dang is expected to actively penetrate general hospitals and the prescription market based on its strong drug-pricing competitiveness.

Industry analysts suggest that once 'tablet generics' with significantly improved dosing convenience pour into the market in earnest, the drug price gap and market confusion will intensify even further. Tablet generics have already challenged patents and applied for approval.

Currently, the Xtandi capsule formulation requires patients to swallow four 40mg capsules at once to take 160mg per day. In contrast, tablets are available in a high dose of 80mg, which can greatly reduce patient burden with a dosage of two pills a day.

As a result, domestic pharmaceutical companies are focusing on developing and approving tablet generics after capsules.

If tablet generics officially enter the reimbursement list, the gap between the listed prices of the original Xtandi tablets (KRW 21,251 for 80mg / KRW 14,167 for 40mg) and the actual prices of subsequent tablet generics will inevitably widen further.

A pharmaceutical industry official stated, 'While the original drug Xtandi is defending its listed price based on the 'flexible drug pricing contract system,' the prices for generic drugs are polarized, ranging from approximately KRW 4,100 to KRW 2,400 depending on the listing time and the timing of the drug pricing system reform,' and analyzed, 'The upcoming price war surrounding this is highly likely to intensify further during the prescription switching competition process.'