CHINA LEX PHARMA LAW NEWSLETTER
Vol. 2 , No.27 - October 18, 2001
TOPICS THIS ISSUE:
- Entomed Teams Up with Shanghai Institute of Entomology to Develop Medicine
- China Prohibits Pharmacies From Selling "Abortion Pill"
- Government Pharmaceutical Strategy for the Next Five Years
- Increased Regulation of Drug Commercials
- Foreign Drug Retailers Allowed to Enter Chinese Market in 2003
Entomed Teams Up with Shanghai Institute of Entomology to Develop Medicine
Entomed, a developer of medicine derived from the biology of insects, recently announced they will be collaborating with the Shanghai Institute of Entomology.
The Shanghai Institute of Entomology, part of the Institute for Biological Sciences of the Chinese Academy of Sciences, will provide Entomed with insect extract of high pharmacological activity. Entomed will use the extract to develop new drugs for a range of therapeutic areas.
This recent alliance is an addition to Entomed's Entoweb?, the company's global network of agreements with entomology centers around the world. Entoweb?'s goal is to create a large library of molecules with therapeutic potential drawn from the huge and diverse insect world, in which new species are discovered daily.
The collaboration with the Shanghai Institute has been initially agreed to last for one year, with the possibility of an extension up to 3 years.
Entomed hopes to draw useful data from the Chinese understanding of insects, already used in traditional medicine. The Shanghai Institute will provide insect extract known for their inherent medicinal properties from the large biodiversity of China.
Entomed Chairman and CEO, Dr. Mario Thomas said "We have high hopes for this new international collaboration that extends our unique and privileged access to insects. We are confident that the new molecules derived from insects that have long been used in traditional Chinese medicines will provide us with promising drug candidates in areas of high medical need such as microbial infections, cancer, inflammation and wound healing."
(Source: PR Newswire)
China Prohibits Pharmacies From Selling "Abortion Pill"
A report last Thursday by the State Drug Administration (SDA) reinforced a ban on pharmacies selling the already strictly controlled Mifepristone "abortion pill".
It is feared that the drug, which induces termination in the first 49 days of pregnancy, is being sold illegally and therefore is considered dangerous due to the absence of medical supervision.
Dr Xu Jinglong of the Shanghai Maternity Hospital said that "Intake of the drug without doctor's guidance can cause uterine bleeding, which may endanger the health of pregnant women."
Three years ago, the Shanghai Health Bureau required that only a limited number of hospitals could use the progesterone inhibiting drug. However, it is now thought that in black-market clinics and underground pharmacies, Mifepristone sales are increasing, so the SDA has again announced that the pill should be administered only by a doctor at a hospital and that sales in pharmacies even with a prescription is prohibited.
The Chinese one-child policy has rendered abortions easily accessible, and ignorance about birth control is thought to add to the improper use of the pill.
Inadequate sex education in schools increases the health risks of Chinese couples, as many people are poorly informed about the dangers of unprotected sex and abortions.
Doctors in Shanghai are also concerned about the recent increase in the use of Caesarean births, which has more than doubled in the past 10 years. Nearly half of Shanghai mothers choose a Caesarean section, believing it quicker and safer, despite the risk of high blood loss and complications.
Urban Chinese are allowed to have only one child and rural Chinese are allowed to have a second child if the firstborn is a girl.
(Source: Agence France Presse)
Government Pharmaceutical Strategy for the Next Five Years
China will maintain the annual output value of the pharmaceutical industry at 12 percent, added value at 13 percent, sales value at 9 percent, import and export value at 6 percent and profits at 13 percent in the next five years up to 2005, according to a Tenth Five-Year Plan set for the industry.
Recently released by the State Economic and Trade Commission (SETC), the plan also includes specific targets such as producing 10 new drugs destined for the international market and completing clinical testing of 50 others that may enter the international market. Other goals of the new five-year plan include developing 10-15 new bio-engineered drugs and 20 types of modern Traditional Chinese Medicine (TCM) drugs, with several enjoying access to the international market.
It is predicted that the annual export value of at least five chemical crude drugs will reach over US $100 million each by the end of 2005 and that the export of medical apparatus will grow by an average rate of 10 percent per year.
The output of slow-acting and controlled-acting drugs will make up 5 percent of the total as compared with 0.2 percent in the past.
It is also planned that ten large pharmaceutical enterprise groups, each with annual sales of more than RMB 5 billion, five to ten large drug distribution groups, each with annual sales of more than RMB 5 billion and 40 other regional groups, each with annual sales of more than RMB 2 billion, will be established.
In addition, ten retail chain enterprises each with over 1,000 stores, and a number of regional chains will also be set up.
(Source: Xinhua News Agency)
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Increased Regulation of Drug Commercials
China will increase supervision of TV commercials in an effort to curb false advertising of drugs, medical apparatus and instruments and medical services.
After monitoring advertisements on 43 channels of the China Central Television Station (CCTV) and 30 provincial television stations, the State Administration for Industry and Commerce (SAIC) announced on Tuesday that over 1,600 drug commercials, or 34.8 percent of all drug commercials inspected, were suspected of violating China's relevant advertisement laws and regulations and are thus "false advertisements."
Nearly 54 percent of the medical apparatus advertisements and more than 78 percent of the medical services commercials were also accused of the same violation.
Due to the rapid development of the entertainment business in China, the number of television advertisements has increased dramatically, resulting in a barrage of fabricated advertisements daily overwhelming viewers.
The larger stations, such as CCTV and Beijing Television Station, are not the major offenders, as it is mostly the smaller stations that have the worst performance record.
(Source: Xinhua News Agency)
Foreign Drug Retailers Allowed to Enter Chinese Market in 2003
Beginning January 1, 2003, foreign drug retailers will be permitted to sell their goods in the retail market of China.
The head of the Division of Economic Operation under the State Economic and Trade Commission, Li Hong, trials have been performed in a number of cities, including Shanghai and Beijing, in which drugstores were established to open up the drug retail sales market.
Presently, for foreign drug retailers to enter the market, two requirements must be fulfilled. A foreign drug retailer must have over US $2 billion in assets three years before the application or US $200 million in assets one year before the application and must set up a joint venture with a Chinese company.
The requirements for a Chinese partner to enter a joint venture in the pharmaceutical industry is that they must have RMB 300 million in assets three years before the application or RMB 50 million in assets one year before the application. It is also encouraged that the Chinese party of a joint venture commercial enterprise related to wholesale activity invests over 50%.
Li Hong believes this will mean that the cost of drugs on the market will drop and more people will have access. It is estimated that 40% of the total cost of medicine in China is spent on marketing.
Presently, Chinese wholesalers and retail sales enterprises in the medicine industry are preparing for the challenges set out by the nearing entry of China into the WTO.
Joint stock companies have been formed, by the establishing of alliances, mergers or share control. Sales methods such as agency distribution, general agency distribution and general sales agency systems have all been used.
(Source: BBC News)
Lehman Lee & Xu
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