Vol.2, No.22

CHINA LEX PHARMA LAW NEWSLETTER

Vol. 2 , No.22 - August 30, 2001

TOPICS THIS ISSUE:

• China GMP Enterprises
• Chinese Government Hopes for a Price Reduction of AIDS Drugs
• Three Quarters of Guangdong Residents Infected with Hep B
• Economic Indices of China's Pharmaceutical Industry
• Drug Sales in China Increase 5.5% while TCM Materials Sales Drop
• Shanghai Officials Fighting Antibiotic Abuse
• Medical Insurance Reforms Successful

China GMP Enterprises

The list of companies whose facilities have met the Good Manufacturing Practices (GMP) includes those pharmaceutical manufacturing companies that have achieved a standard set by the China State Drug Administration (SDA). A company that has reached the GMP level has been examined and awarded GMP status by the SDA through a rigorous inquiry into the manufacturer's management systems, hygiene, raw materials, quality control, equipment, manufacturing environment, personnel and testing procedures. Forthcoming issues of the China Lex Pharma newsletter will include the remainder of the list of pharmaceutical manufacturers that have acquired GMP status. The first 50 are listed below. For assistance in contacting one of these companies, please send an email to mail@chinalaw.cc.

Names of Approved Factories	Approved Scopes
1. Henan Huamei Biotechnology Co., Ltd	Exosomatic Diagnosis Agent
2. Chongqing Sangtian Pharmaceutical Co., Ltd	Tablet, Capsule
3. Wuhan Jiu'an Pharmaceutical Co., Ltd	High Dose Injection
4. Shenzhen Traditional Chinese Medicine General Factory	Oral Liquid
5. Tianzifu International Pharmaceutical (Jiangsu) Co., Ltd	High Dose Injection
6. Shenyang Pharmaceutical Stock Co., Ltd	Powder-Injection (Cephalosporin)
7. Hebei Shijiazhuang Lu'quan Pharmaceutical Factory	High Dose Injection
8. Jilin Yinhe Pharmaceutical Factory	High Dose Injection
9. Hebei Huarong Pharmaceutical Co., Ltd	Raw Material (Vitamin B12)
10. Shijiazhuang No. 4 Pharmaceutical Stock Co., Ltd	Capsule, Granule
11. Shijiazhuang No. 2 Pharmaceutical Co., Ltd	Raw Material ( Penicillin)
12. Beijing Yaohua Biotechnology Co., Ltd	Exosomatic Diagnosis Agent
13. Jiangsu Jiangshan Pharmaceutical Co., Ltd	Raw Material (Vitamin C)
14. Changzhou Yanshen Biological Technology Co., Ltd	Purified Rabies Vaccine (Vero cell)
15. Jincheng Haisi Pharmaceutical Co., Ltd	Low Dose Injection, Freeze-drying Powder-Injection
16. Shijiazhuan Ouyi Pharmaceutical Co., Ltd	Tablet, Capsule, Granule, Low Dose Injection
17. Qilu Pharmaceutical Factory	Rec-granulocyte colony stimulating factor
18. Beijing Ruiye Pharmaceutical Co., Ltd	Capsule, Granule
19. Chengdu Kanghong Pharmaceutical Co., Ltd	Tablet
20. Huamei Biotechnology Co., Ltd	Exosomatic Diagnosis Agent
21. Guangdong Techpool Biochem. Pharmaceutical Co., Ltd	Low Dose Injection
22. Shenzhen Gaozhuo Pharmaceutical Co., Ltd	Capsule (penicillin)
23. Shenyang Aojina Pharmaceutical Co., Ltd	Tablet, Capsule
24. Shandong Runhua Jirentang Pharmaceutical Co., Ltd	Tablet, Capsule, Granule
25. Changsha Cihang Pharmaceutical Co., Ltd	Oral Liquid
26. Dalian Guangcai Pharmaceutical Co., Ltd	High Dose Injection
27. Dongguan Winnerway Yishi Bio-Technology Pharmaceutical Co., Ltd	Anti-interleukin-8monocolony-antibody Cream
28. Wuxi Shanhe Pharmaceutical Stock Co., Ltd	Low Dose Injection
29. Shandong Huaifan Pharmaceutical Stock Co., Ltd	Tablet, Capsule, Granule
30. Tianjin Chase Sun Pharmaceutical Stock Co., Ltd	Low Dose Injection, Tablet, Capsule, Granule
31. Guizhou Holy Pharmaceutical Co., Ltd	Capsule, Spray,
32. Hunan Zhengqing Pharm. Corporation Co., Ltd	Granule, Capsule
33. Hebei Medical University Biomedical Project Center	Low dose Injection
34. Chengdu Di-Ao Jiu Hong Pharmaceutical Factory	Tablet, Capsule, Granule
35. Xuzhou Nuhua Pharm. Corporation, Suzhou Third Pharmaceutical Factory	Tablet, Capsule, Low Dose Injection
36. Shanxi Jinyu Pharm. Co., Ltd	High Dose Injection
37. Shanghai Yapei Pharm. Co., Ltd	Tablet, Granule, Inhalant
38. Shanghai Institute Of Biological Products	Human Normal Albumin Production Workshop
39. Shanghai Institute Of Biological Products	Influenza Virus Pyrolysis Vaccine Production Workshop
40 Chengdu List Pharm. Co., Ltd	Tablet, Capsule, Granule ( Both Penicillin)
41. Hainan Kangliyuan Pharm. Co., Ltd	Powder-Injection, Freeze-drying Powder-Injection (Cephalosporin)
42. Hunan Jinjian Pharm. Co., Ltd	High Dose Injection
43. Guangdong Jianlibao Pharm. Co., Ltd	Tablet, Capsule
44. N Pharm. (Wuxi) Co., Ltd	Tablet, Granule, Suspension
45. Fujian Mindong Lijiexun Pharm. Co., Ltd	Freeze-drying Powder-Injection, Powder-Injection
46. Hefei Zhaofeng USTC Pharm. Co., Ltd	Recombination Human Interferon a2b Production Workshop (Jellies)
47. Shanghai Sine Promed Pharmaceutical Co., Ltd	Tablet, Capsule
48. Beijing Shunxin Xiangyun Pharm. Co., Ltd	Tablet, Capsule, Granule
49. Shanghai Nycomed Pharmaceutical Co., Ltd	Low/High Dose Injection, Tablet
50. Guizhou Lindong Pharmaceutical Factory	High Dose Injection

(Source: State Drug Administration)

Chinese Government Hopes for a Price Reduction of AIDS Drugs

The director of the AIDS division of the Department of Disease Control at the Ministry of Health, Dr. Sun Xin Hua, recently announced that China is planning to start talks regarding price cuts with three companies importing western AIDS medicine.

GlaxoSmithKline PLC, Merck & Co. Inc, and Bristol-Myers Squibb Co. are the only western pharmaceutical groups approved by the Chinese government to sell their anti-AIDS drugs in China.

At a recent news conference on controlling China's growing HIV/AIDS problem, Dr. Sun Xin Hua said that within two months, China will begin negotiations with the three companies to secure price reductions for drugs sold within the country.

He said that because China lacks a strong public healthcare system, patients themselves must carry the burden of paying for the extremely expensive western drugs.

He also stated that the government is not planning to follow countries such as South Africa and Kenya, which recently passed legislation allowing the government to manufacture or import cheap generic copies of brand-name AIDS drugs.

In the first half of this year, 3,541 HIV infections were reported, a 67.4% increase from the same period last year, and 231 AIDS cases were reported, almost three times the amount from the same period last year.

The government has created a long-term plan that will maintain the total number of people infected with HIV below 1.5 million by 2010. The strategy includes prevention plans and the establishment of proper blood banks.

GlaxoSmithKline and Pfizer Inc have stated they will sell their AIDS drugs to some of the world's poorest countries, as defined by the United Nations, at discounted prices. However, China is not on this list.

Chen Ai Qiao, assistant to the general manager at Beijing Medical-Pharmaceutical Co, which is the main importing agent for AIDS drugs sold in China, said that treating the disease using western medicine cocktails would cost RMB 7,000 per month.

The lack of a public healthcare system and low salaries (RMB 10,984 is the average annual salary of an urban worker) allow very few Chinese people able to afford the high-priced treatment.

The drugs the government has approved so far are two drugs by Bristol-Myers Squibb - zerit and videx, two by Merck - crixivan and stocrin, and two by GlaxoSmithKline - combivir and 3TC.

The director of corporate affairs for China and Hong Kong at GlaxoSmithKline, Li Heng, said she was not aware of any impending talks. However, she did reveal that that discussions with the government were held two months ago and both sides agreed the price of its AIDS drugs charged to hospitals in China should be brought down.

Li Heng also said the price charged by the company is not the only problem. Because of strict government policies on import tariffs and other regulations for imported drugs, such as distribution, which GlaxoSmithKline has no control over, means the final price of the AIDS drugs was double the original import price.

She also noted the shortage of medical staff qualified to deliver the correct treatment was also holding back sales, which in turn contributes to difficulties in reducing prices.

(Source: AFX-Asia)

Three Quarters of Guangdong Residents Infected with Hep B

The practice of using dirty needles for injections and acupuncture in China has created an unusually high proportion of Chinese people infected with hepatitis B. Guangdong province, in the south of China, currently has one of the highest rates of hepatitis B infection in the world.

A government health official revealed that blood samples taken from patients during regular hospital visits show that 10 million people, or 75% of the province's population, have had the disease. Earlier surveys indicated that two thirds of China's 1.26 billion people have been infected, compared with only about one in 20 Americans.

Similar to AIDS, hepatitis B can be spread by contact with infected blood or through sexual intercourse. However, hepatitis B is much more easily spread as it is 100 times more concentrated in the blood and can even survive for brief periods of time outside the body.

Liu Chongbo, a researcher at the China Academy of Medical Prevention, said that most of China's blood supply is probably safe, as approximately 60% of infected people caught it in childhood, during routine vaccinations. However, he noted that the most common form of transmission is by dirty needles, used by doctors in poor areas to save money. Mothers infecting children through breast feeding is also common, he said. Experts also revealed that illegal trade in repackaged needles that have been inadequately cleaned are a cause of infection.

Liu also said that lack of awareness about the disease means that few pregnant women test for the disease, and that people who are aware they are sick often fail to get treatment in fear of discrimination.

"Many hepatitis B carriers can't find jobs or are even rejected by universities. This could develop into not only a health problem but a social problem as well," Liu said.

The majority of people infected with hepatitis B survive, however in severe cases the virus can attack the liver and cause cirrhosis and cancer. In China, these diseases kill 300,000 people a year, and 80% of them have had hepatitis B.

Although effective vaccinations are available, and required for children in the United States, at the current price of US $25 and not covered by national health insurance, they are too expensive for most Chinese people.

(Source: Associated Press, The [Raleigh] News and Observer)

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Economic Indices of China's Pharmaceutical Industry

The following is a table showing the economic indices of China's pharmaceutical industry for the first half of this year:

Index Jan.-June	total Y-o-y	chg (%)
Total assets	RMB 295.320 billion	13.95
Total liabilities	RMB 164.679 billion	7.40
Average balance of floating assets	RMB 154.010 billion	14.88
Average balance of the net value of fixed assets	RMB 79.623 billion	11.34
Sales revenue	RMB 87.811 billion	12.61
Sales cost	RMB 55.745 billion	12.70
Sales expenses	RMB 13.791 billion	7.18
Sales tax and surcharges	RMB 0.564 billion	22.20
Total profit	RMB 7.120 billion	60.18
Amount of losses	RMB 1.115 billion	24.11
Financial expenses	RMB 2.203 billion	5.97
Management expenses	RMB 8.544 billion	12.68
Net account receivable	RMB 48.529 billion	12.22
Finished products	RMB 20.356 billion	5.99
Average number of employees	9.923 million	0.98
Value added tax payable	RMB 6.114 billion	15.97

(Source: National Bureau of Statistics)

Drug Sales in China Increase 5.5% while TCM Materials Sales Drop

According to the State Economic and Trade Commission, China's drug sales amounted to RMB 72.3 billion (US $8.7 billion), during the first six months of this year, an increase of 5.5% from the same period during the previous year.

Medical equipment sales rose 27.7% from last year, while drug sales and Traditional Chinese medicine (TCM) sales rose 8.4% and 4% respectively. However, the sales of Chinese medicinal materials registered a drop during the first half of this year.

A survey of hospitals in ten major cities showed that the use of imported drugs declined and the use of drugs made by Chinese enterprises and joint ventures went up.

The survey also showed that the consumption of imported drugs in hospitals will continue to drop for the rest of this year.

(Source: Asia Pulse)

Shanghai Officials Fighting Antibiotic Abuse

The Drug Administration in Shanghai has recently begun a plan aimed at stopping drug abuse in the city, after claims that the city is the worst in the country regarding antibiotic abuse.

Abuse of antibiotics can lead to various effects, including allergies, shock and even death, said Hu Bi Jie of the Pulmonary Infections Division at the Institute of Respiratory Diseases of China.

Hu said that due to abuse, the effect of the antibiotics is greatly reduced and the life span of drug abusers becomes shorter and shorter as a result of them becoming drug resistant.

New viruses have been discovered living on antibiotics, which is a cause of global concern. Liu blames these new viruses on the abuse of antibiotics, and the blame falls on both the doctor and the patient.

Yu Jianmin, spokeswoman of the Shanghai Drug Administration, said we must immediately inform the public on how to use antibiotics properly, and of the dangers they face if they do not.

The administration revealed that 80% of local households keep antibiotics at home and the consumption of antibiotics in Shanghai has reached 35% of total medical expenses. The administration also said that 80% of hospitalized patients use antibiotics, much higher than the World Health Organization's estimate of 30%.

Hu Bi Jie said some doctors do not follow rules of use, writing prescriptions randomly or just out of habit or turning antibiotics into liquids for washing wounds.

The Administration will distribute 60,000 brochures throughout Shanghai's 1,300 drug stores and advise medical staff and the public on the proper use of antibiotics.

Yu Jian Min said the plan is partly to prepare for the December implementation of the newly revised law of the People's Republic of China on Pharmaceutical Administration.

(Source: Xinhua)

Medical Insurance Reforms Successful

At the end of the first half of this year, China's medical insurance system covered 50.26 million people.

Medical insurance reform has been initiated in 88% of the 349 regions planned, and people now protected account for 30% of the total number the medical insurance reform plans to cover.

The Ministry of Labor and Social Security said recent reform of the outdated social security system has achieved positive results. In the past six months, approximately 7 million people have enrolled in the medical insurance program.

The Ministry of Labor and Social Security hopes to offer medical insurance protection to at least 80 million people by the end of this year.

Vice Minister Wang Dongjin reports the changes are going smoothly and medical insurance funds are balanced between revenue and expenditure.

Wang also said the health care system and mechanisms for drug distribution should also be under reform. He suggested a multi-tier system hoped to cover all citizens, even those living in extreme poverty.

The free medical care system, established in the early 1950s in China after the founding of the People's Republic of China in 1949, has many loopholes and became troublesome in recent years due to the huge population base and high medical expenses.

Medical expenditures had no limits according to the previous system and people took advantage of this, receiving expensive and unnecessary treatment, while doctors over-prescribed medicine in order to earn kickbacks. Meanwhile, less affluent enterprises could not afford even basic services for employees.

To maintain this ineffective system, the State and business enterprises both were forced to invest large amounts of money every year.

(Source: Xinhua)

 

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