China has the worldâ€™s second largest drug market and itâ€™s growing fast. Estimates are that by 2020 prescription pharmaceutical sales will top $300 billion a year, second only to the US. Drug sales are regulated by the Chinese FDA, which on the surface, has been modeled after the US FDA.
In fact, though, Chinaâ€™s drug industry and regulation is like nowhere else in the world. The reason: one third of all drug sales in China are of approved traditional Chinese medicines (â€œTCMâ€) made from dried leaves, roots, stems, fungi, flowers, and seeds, along with a variety of animal, insect and lizard skins and secretions.
The same Chinese FDA regulatory system that tests and approves Western medicines also approves TCM ingredients and potions. Chinaâ€™s healthcare industry thus stands with one foot planted in 21st century science and one foot in its opposite, a world of age-old popular folklore and folk cures.
Chinese medicine has been around in China for at least 2,000 years. Western drugs and teaching hospitals arrived about a century ago. The two regard one another with almost mutual incomprehension. Pharmaceutical executives will tell you that TCM has utterly failed to prove its efficacy in clinical tests, while many of Chinaâ€™s 400,000 traditional Chinese doctors and practitioners consider most â€œXi Yaoâ€ (è¥¿è¯), or Western medicine, to be disruptive or toxic to the natural yin-yang balance. At most larger general hospitals in China, one can find doctors separately practicing each type of medicine. On the ground floor, two separate pharmacies dispense prescriptions.
Chinese navigate between the two worlds. When feeling unwell, they will self-diagnose and decide to seek either Western drugs or TCM. Visiting the doctor is one Chinaâ€™s more popular indoor activities. Each year, Chinese make over four billion visits to a clinic, with about one-fifth of those being to see a TCM practitioner. Â No surprise, TCM is more popular among older folks in China.
Chinaâ€™s pharmaceutical industry, and the regulations that govern it, are a nice allegory for the state of Chinaâ€™s national genome â€” part relentlessly modern, part three-thousand year-old archive of analects, customs, superstitions. The two coexist, but the results can sometimes be less than the best-of-both-worlds. Such is the case with drug regulation.
For all Western-style pharmaceuticals now seeking approval in China, there are well-established standards, based on multi-phase clinical trials and double-blind studies. With TCM, such standards that do exist are not so much the product of rigorous evidence-based medical science. If it doesnâ€™t poison your system and the ingredients have been used for centuries in China then itâ€™s likely going to get approved.
The result is, as one CEO of a Chinese pharmaceutical company explained to me recently, â€œdown the hall at the China FDA from scientists with PhDs in biology and chemistry are a bunch of guys giving the green light to TCM substances that have not been proved by accepted scientific standards to have any medical benefit whatsoever. How can these things be regulated, sold and labeled as medicines? â€
This CEO then makes a larger point. The Chinese FDAâ€™s split personality, of administering both a clinical drug approval regime for Western drugs and one for TCM that doesnâ€™t demand any proof of efficacy is likely part of the reason Chinaâ€™s pharmaceutical industry has yet to come up with any genuine breakthroughs.
In his mind, TCM should be only sold and regulated as foods. Â A government agency, in other words, shouldnâ€™t be telling people something is a medicine on the basis of nothing more than a history of people believing it to be.
One famous case in point: Yunnan Baiyao. It is among the most famous and widely-sold TCM formulations. Itâ€™s also big business. The eponymous publicly-traded company has a nearly $12 billion market cap. It is sold as a medicine, but its ingredients are a state-secret. No one, perhaps not even the regulators, knows whatâ€™s in it. Could any of its ingredients be bad for you or harvested and processed in less-than-sanitary conditions? No one knows and yet Chinese keep relying on it.
Among the best-selling TCM cold cures is a packaged potion called 999 made in Shenzhen. Many Chinese swear by it. The US FDA says its recent on-site inspection of the facility where itâ€™s made revealed â€œsignificant violations of current good manufacturing practice (CGMP) regulations for finished pharmaceuticals.â€
The official correspondence is quite damning. The makers of 999, according to the US FDA inspectors, â€œfailed to establish laboratory controls that include scientifically sound and appropriate specifications, standards, sampling plans, and test procedures designed to assure that components, drug product containers, closures, in-process materials, labeling, and drug products conform to appropriate standards of identity, strength, quality, and purity.â€œ But, as far as can be determined, Chinaâ€™s own FDA has never visited the factory or never found any problems with the way 999 is being made.
Over the last five years, Chinaâ€™s ruling Communist Party has moved decisively to create and manage a large First World-scale regulatory apparatus. Transportation, hiring and firing, air and water quality, foods and medicines are all now subject to very clear-cut rules, often as tight as those as in the US. Enforcement grows more strict every year.
At the apex of this new regulatory system is Chinaâ€™s FDA. It was remade from top-to-bottom, beginning seven years ago when its one-time chief was arrested and then executed for corruption and approving tainted products for sale in China. In 2013, standards were toughened up again, the old agency disbanded and the newly-constituted CFDA was created and elevated to ministerial level.
The Chinese public is being told this new agency will be a fierce, powerful and incorruptible guardian of the national health. But, the tough cop seems to have a big blind spot when it comes to TCM.