CHINA LEX PHARMA LAW NEWSLETTER
Vol. 2 , No.13- May 23, 2001
TOPICS THIS ISSUE:
- Pharma Prices to be Disclosed Through Newspaper Rather than Official Circular
- Ban on Drug Advertising in Popular Media Proved Unsuccessful
- Chinese Lawyers Prepare to Sue Tobacco Firms
- Foreign Pharmaceutical Firms Pushing Diet Products in China
- Protective System For Chinese Traditional Medicine to Meet Int'l Standards
- China Cracks Down on Fake Doctors and Drugs
Pharma Prices to Be Disclosed through Newspaper Rather than Official Circular
China's State Planning and Development Commission will disclose the prices of pharmaceutical products to the public through designated newspapers rather than official government circulars.
The official government circulars with the prices of pharmaceutical products could have taken from ten days to two months to reach pharmaceutical manufacturers, wholesalers and retailers, and consumers, while the newspapers with such price indexes may be available in a day or two. The price index disclosed to the public covers the prices of pharmaceutical products determined by the Chinese government, the prices of pharmaceutical products filed at the government, and government policies on pharmaceutical prices.
The eight government designated newspapers are as follows: China Pharma News, China Economic Herald, Health News, Medical Economic Newspaper, Theory and Practice of Prices, Price Gazette, China Economic Information Website, and China Price Information Website.
(Source: China Pharma News)
Ban on Drug Advertising in Popular Media Proved Unsuccessful
Some drug manufacturers do not seem to care, and advertisements for spurious drugs continue to appear in the popular media despite a government ban. The government banned drug advertising outside of professional media, but the ban is not working very well.
According to an employee who works in marketing for one pharmaceutical enterprise, the general public rarely reads professional journals because they are too difficult for laypeople to understand.
But the people who sell prescription drugs would like a large number of laypeople to be aware of the names of the drugs they sell. Advertising prescription drugs only through professional channels excludes the lay audience and will not help sales, the marketing employee said.
Statistics from the State Drug Administration (SDA) show that last year, 525,598 people were questioned about prescription drug-related irregularities. Investigations were conducted into 48,582 cases, and 42,339 of those were settled. The authorities seized RMB 471.4 million (US $56.93 million) worth of fake and poor-quality drugs last year.
A total of 147 of these cases were transferred to criminal court, where seven people were ultimately convicted of crimes.
In fact, some media outlets have contracts with advertising companies to run the advertising side of their business. If the authorities crack down, advertising disappears; when the authorities leave, the ads reappear.
(Source: www.chinaonline.com)
Chinese Lawyers Prepare to Sue Tobacco Firms
China's tobacco industry will soon face a class action lawsuit filed by lawyers in five different cities throughout China on behalf of China's youth population that has been harmed by cigarette smoking. The basis of the suit will focus on consumer rights, youth protection and illegal advertising.
Although the lawyers have not indicated exactly whom they will sue or for how much, it is believed that they will go after all of China's major tobacco companies and perhaps even some foreign ones.
Currently, China has 320 million smokers, an estimated 750,000 of whom will die from smoking-related illnesses this year. If current trends continue, this figure is expected to jump to two million by 2020, according to the most recent study on smoking in China, published in 1999 by the American Medical Association.
One in three cigarettes smoked in the world today are smoked in China. There are five million teenage smokers. An alarming 63 per cent of Chinese men smoke. Only 16.8 per cent of smokers want to quit and fewer than half recognize that lung cancer is smoking related, according to the study.
For foreign tobacco companies, such statistics and estimates contain a silver lining, as China represents the biggest market in the world for tobacco and, until now, a place where legal barriers to its' well-known health risks were non-existent.
The plaintiff's task in the suit will not be easy as most tobacco companies in China are State-owned and provide a key source of tax revenue for the government. On the plaintiff's side, though, are recent statistics disclosed by one of the law firms involved that show while the government gained RMB 4.9 billion (US $590 million) in tobacco taxes in 1993, it paid RMB 7.8 billion (US $940 million) in health care costs for smoking-related illnesses.
(Source: Agence France Presse)
Foreign Pharmaceutical Firms Pushing Diet Products in China
In the next five years, foreign companies that produce weight-loss products believe that they can capture a sizable portion of what is estimated to be a RMB 6.2 billion (US $746 million) market.
Companies such as Roche, the Swiss pharmaceutical firm, and German pharmaceutical company, Knoll, expect to stake their claim with their products Xenical and Reductil, respectively.
Recent changes in Chinese law have helped pave the way for foreign pharmaceutical companies marketing weight-loss products, despite the 100 or so domestic names now available. In their favor are government efforts to clean up the health care product market by getting rid of low-quality products and a commitment by the Ministry of Health and the State Drug Administration to abolish the registration category "health care products" before 2004.
Such products that currently fall under this label will either be removed from the market or forced to be re-registered as medicines or foods.
In anticipation of these regulations and in an effort to break into the market, foreign companies have shifted away from marketing over-the-counter products and have instead joined forces with Chinese hospitals.
In a survey by ISIS, a British medical market researcher, it was found that in Beijing, Shanghai and Guangzhou, Xenical has captured 10.7 per cent of the weight-loss product market -- just four months after it began sales in China.
(Source: ASIAINFO DAILY)
Protective System For Chinese Traditional Medicine to Meet Int'l Standards
China will further its commitment to regulate its traditional medicine market by establishing a system of normalization and strengthening laws regarding manufacturing and processing. China recently revised its law on drug administration, its latest move in an effort to tighten the grip on medicine production and supervision.
The updated law strengthens the supervision of the entire manufacturing process as well as monitoring the quality of the drugs being produced.
At the same time, the Chinese government is strengthening its financial support of technological innovation in the traditional Chinese medicine sector, a key issue on the agenda of China's most recent five-year plan.
Money will be poured into the raw materials needed for traditional Chinese medicine and upgrading facilities to produce them.
Since original laws of this variety were implemented seven years ago, China has shut down dozens of illegitimate Traditional Medicine processors. Currently, there exist 1,036 manufacturers in 31 provinces throughout the country.
New ordinances have placed Chinese Traditional Medicine in the spotlight of China's recent commitment to curb intellectual property rights' violations.
China is putting an emphasis on global standards in the production of herbal medicine and strengthening technological innovations.
The nation's largest conglomerate of traditional Chinese medicine businesses, the China Medicinal Materials Group, was set up last week, indicating a shakeup in the industrial landscape. The group, formed by a number of leading Chinese manufacturers, distributors and innovators of traditional Chinese medicine, shows the country's ambition to have an industrial giant competing on the world stage.
Source: (AsiaInfo Daily/Xinhua)
China Cracks Down on Fake Doctors and Drugs
The Chinese government is still concerned that an effort to stamp out illegal medical practices and counterfeit goods that began in March of this year has still not made enough progress in eradicating the problem. According to Chinese authorities, the practice of making, selling and using fake pharmaceutical goods is still rampant.
Since March, officials seized nearly 2,500 tons of fake or inferior food, cosmetics and disposable medical devices worth more than RMB 40 million (US $4.8 million). As a result, 1,400 illegal producers and nearly 40,000 illegal medical clinics have been closed.
Cosmetics, weight-loss products and other pharmaceuticals are some of the fastest growing industries in a country that did not even have such products two decades ago.
However, demand for pharmaceutical products still greatly outweighs supply and thus there still exists a market for cheap yet unscrupulous products and services.
The latest official survey indicated only 85% of disposable medical devices produced by licensed manufacturers meet standards and about 40% of surveyed health foods in Beijing have exaggerated their efficacy in advertisements.
In another crackdown, the Health Ministry issued a notice banning medical diagnosis and treatment via the Internet.
Web sites licensed to carry medical information can only offer consultations to would-be patients and not services. Moreover, only licensed medical institutions are authorized to offer such consultation via the Internet.
The Ministry also requires medical information Web sites to get approval from health departments when applying for business licenses.
Most Web sites, in fact, have not developed to the point where they can offer diagnoses or treatment, but the government is worried that the explosive growth of the Internet will encourage crooked businesses trying to profit from medical services.
(Japan Economic Newswire)
Lehman Lee & Xu
China Lawyers, Notaries, Patent, Copyright and Trademark Agents
Suite 188, Beijing International Club
21 Jianguomenwai Dajie, Beijing 100020 China
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The China Lex Pharma Law Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
