Vol.3, No.27

Biotech's Yin and Yang

China's economy may be booming on the back of manufacturing but the government wants future growth to come more from high technology and knowledge-based industries. So, between 1996 and 2000, the central government invested in excess of RMB 1.5 billion (US$ 180 million) in biotechnology, as part of its attempts to develop its biotechnology sector. Between 2000 and 2005, the central government plans to invest another RMB 5 billion. As a result, the Science Ministry claims that as many as 20,000 researchers work in the life sciences in China.

The Chinese government spent RMB 322 million on plant-biotechnology research alone in 2000, sustaining one of the biggest public-sector agricultural-science programmes in the world.

These figures may not be very impressive when compared with the US$ 15.7 billion invested in research and development last year alone in the United State's biotechnology industry, which employs 191,000 people. But the speed with which China's industry is growing provokes both wonder and anxiety in the outside world. Some worry that a lack of public debate over biotechnology, and different philosophical traditions, mean that China will head off in directions that are morally unacceptable in the West.

Chinese biotech development is balanced by several opposing forces, including a lack of some of the basic building-blocks of a modern, knowledge-driven industry, ever-shifting regulation, particularly for genetically modified (GM) crops, and the first stirrings of protest by activist groups. This balance of opposites, the yin and the yang, is as familiar a feature of the country's modern technological development as it is of ancient Chinese philosophy.

Tight new regulations were announced last year governing food labeling, environmental testing, commercial release, and the import and export of GM crops. The new import rules include requirements for field-testing and a food safety evaluation. Some scientists argue that this more cautious stance is justified, given that China's next generation of GM crops includes such staple foods as rice, which could be adopted by billions of people around the world, and whose safety now rests in China's hands.

However, coverage of GM foods in China is still more muted than in the West. As Dr Huang points out, the "public" debate over biotechnology in China still means exchanges among scientists and government officials, rather than society at large.

In Beijing's top hospitals you will find many of the fruits of biotechnology, such as genetically engineered insulin to treat diabetes or interferon-alpha to fight cancer. In fact, there are now approximately 20 genetically engineered medicines approved for sale in China, generating RMB 7.6 billion in revenue in 2000. Yet although these genetically engineered drugs were made in China, such products are little more than high-tech knock-offs of rich-country inventions, introduced when China had little interest in intellectual-property rights.

Wang Hongguang, director of the National Centre for Biotechnology Development, admits that originality is still a problem for many of China's scientists. He hopes the return of some of the 20,000 Chinese researchers now working abroad will add a spark of creativity. Last month, Beijing announced a recruitment drive to attract 200 scientists from abroad with the promise of western-style salaries.

For all these scientific strengths, the expansion of Chinese biotechnology is held back by several problems. One is funding. Biotechnology is not cheap, with long development times and scientific uncertainty means that it takes lots of money to develop a successful product. At the moment, the government funds most Chinese biotechnology projects, although private money is beginning to trickle in.

On the whole, biotech entrepreneurs would rather have private money than deal with the strings that inevitably come with public funds. So far, private investors in China are far less sophisticated than their foreign counterparts. Some investors from Taiwan, Singapore and Hong Kong have taken the plunge. But venture-capital groups from Europe and America are holding off until they can be assured of a way to recoup their investment, preferably by floating any resultant company on the stockmarket, or selling it to a larger firm.

A second problem is management. As in the early days of European biotech, China's emerging industry lacks people who combine scientific nous with good business sense. Another shortcoming is intellectual-property protection. Although China moved last year to strengthen its patent laws for drugs and other biotech products, it is still a hard, expensive slog to get a patent and even harder to protect it.

Lastly, there is the question of regulation. China's patchy record in such bioethical minefields such as abortion and organ donation leads many in the West to fear the worst when they hear that the country is branching into genetic engineering or high-tech reproduction.

(Source: The Economist)

Foreign Invested Anti-HIV Drugs tend to be Economical

Multinational corporations have started to introduce new anti-HIV medicines into China with domestic enterprises, such as Northeast Pharmaceutical Group Sales Co., Ltd. and Shanghai Desano Co. Ltd, beginning to promote anti-HIV medicines which imitate lapsed patent drugs.

The largest overseas investor in pharmaceutical enterprise in China, GlaxoSmithKline (GSK), recently announced that it will launch its HAART tri-compound drug (AZT + 3TC + ABC) Trizivir in China. GSK has also stated that it has submitted an application with the State Drug Administration (SDA) to produce the anti-HIV drug Combivir in China.

Merck Sharp & Dohme (China) has announced that it will release its new EFV 600mg tablet in China in an attempt to realize its promise to lower the prices for HIV treatment drugs to a more acceptable level. This new EFV tablet's dosage is one tablet a day with its price will be capped at US $ 2.10.

(Source: SinoCast China Business Daily News)

China gives go-ahead to First State-Run Stem Cell Bank

China's government has given the go-ahead for the establishment of the country's first state-run stem cell repository.

The repository is to include a stem cell bank and an engineering center located in Tianjin, a port city near Beijing. A stem cell transplant center at the facility will eventually be able to provide transplants for 200 patients every year.

Stem cell is a term used to define a broad category of cells that have the ability to divide for indefinite periods into specialized body cells, such as blood, skin or organ cells.

Transplanting stem cells, usually taken from donors' bone marrow, is considered one of the most effective measures to treat leukemia.

China has also initiated a system of letting parents preserve umbilical cord blood stem cells from newborn babies for possible later medical use.

(Source: Agence France Presse)

China Imports and Exports More Medicine

China imported and exported US$ 7.224 billion worth of Western medicine, medical instruments and meters in the first three quarters of this year, according to Qiao Haili, an official of the China Chamber of Commercial for the Import and Export of Medicinal and Health Products.

China's pharmaceutical exports were valued at US$ 4.168 billion, up 43.46%, while its imports were valued at US$ 3.256 billion, up 39%.

The export of crude drugs was US$ 2.158 billion, up 47.37%, including US$ 94 million of penicillin, up 42.76%, 32,000 tons of vitamin C, and US$ 46 million of paracetamol, up 30%. The export of medical instruments and meters totaled US$ 1.065 billion, up 82%. These exports mainly went to Asia, Europe and the United States.

Conversely, China imported US$ 3.256 billion of Western medicine, medical instruments and meters in the first three quarters of this year, up 39% on last year. This included US$ 1 billion dollars of Western crude drugs, up 124%, US$ 660 million of Western drugs, up 9%, US$ 140 million of biochemical drugs, up 126%, US$ 1.3 billion of medical instruments and meters, up 19%, US$ 16 million of dressings, up 17 % and US$ 80 million of farm chemicals, down 5.17%.

(Source: Xinhua Economic News Service)

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The China Health Sciences 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.

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