CHINA LEX PHARMA LAW NEWSLETTER

Vol. 3 , No.4 - February 21, 2002

TOPICS THIS ISSUE:

• Viagra Prescription Restrictions Lifted
• China Sums Up a Year Working Against Counterfeit Drugs
• Health Canada Warns Public to not use China-Manufactured Hua Fo
• Blood Industry Will Receive US $270 Million to Ensure Safe Donations
• China's WTO Commitments Likely to Attract Many Foreign Hospitals
• International SOS Excited about the Mainland Market
• Shanghai Hospitals Open to Foreign and Private Funding
• List of China GMP Facilities (Continued)

Viagra Prescription Restrictions Lifted

Patients are now able to obtain Viagra prescriptions from more doctors, due to the recent lifting of restrictions on doctors issuing prescriptions for males with erectile dysfunction (ED).

The State Drug Administration, together with the Ministry of Health, announced that chief physicians, from second-class hospitals up, in cardiovascular, endocrine, psychosurgery and internal medicine for neuropathy departments are now permitted to write prescriptions for Viagra. Before the joint statement, only senior physicians specializing in urology were authorized to issue prescriptions for the controversial drug.

Viagra, which entered the Mainland Chinese market in July 2000, obtained patent approval in September of 2001.

(Source: Xinhua News Agency)

China Sums Up a Year Working Against Counterfeit Drugs

In a recent conference, the State Drug Administration announced that 2001 was a productive year regarding the control of counterfeit medicines.

Zheng Xiaoyu, director of the SDA, said that in 2001, the SDA was involved in approximately 51,700 cases dealing with the manufacturing and sale of counterfeit medicines. The cases amounted to RMB 485 million (US $58.4 million).

Although Zheng warned of the danger of fake drugs, it is a surprise that only 269 of those cases resulted in criminal charges. Zheng said "the fakes are very dangerous and pose a threat to public health."

The SDA also reported that they confiscated more than 150,000 dosages of expired medicines worth RMB 229 million (US $27.6 million) and looked into 2, 337 cases of counterfeit or defective medical equipment. Zheng also noted that they found "256 firms that had reworked animal medicines for human use."

Despite the low number of criminal charges, the crackdown has not left the manufacturers of counterfeit medicines unharmed. The SDA director reported that the number of wholesale pharmaceutical firms decreased by 27%. In the latest round of recertification, 2, 660 manufacturers of medical equipment were removed from the market, 225 pharmaceutical firms were ordered to reorganize and improve, 779 applications were rejected and 6, 731 licenses were granted.

The latest round of revocations will not be the last either. Li Hongsheng, the State Drug Administration's Market Compliance Department Head, said "due to legislative amendments, pharmaceutical companies unable to meet the new quality standards by 2004 will be wiped out."

Due to the high percentage of patients reporting adverse reactions to prescribed drugs, a nationwide network to monitor the adverse effects has been formed. Presently, 10 to 30 per cent of the patients in hospitals report adverse reactions to drugs prescribed.

Now, not only hospitals must report any adverse reactions, but also drugmakers, medical equipment manufacturers and distributors must also report any suspected adverse reactions. Last year, over 7, 500 reports were filed.

Zheng said "A long-term campaign against the illegal pharmaceutical trade will help the pharmaceutical sector move along a sound track, guarantee people's health and provide a good investment environment for drugmakers."

Although many fines are still too low, such as RMB 30,000 (US $ 3,610) for concealing any adverse drug reactions, and the criminal charges too few, SDA officials remain optimistic. Zheng said "Last year, we rolled out the new Drug Management Law, providing specific and tough penalties for violations. We will continue to make the legislation more transparent and consistent."

(Source: Business Daily Update)

Health Canada Warns Public to not use China-Manufactured Hua Fo

Health Canada has issued a warning to consumers, health care professionals and provincial health ministries to not use Hua Fo tablets, an unapproved herbal product manufactured in China that claims to enhance sexual function.

Health Canada analyzed samples of Hua Fo tablets and found that they contained sildenafil. Sildenafil is the drug approved as prescription only for male erectile dysfunction, sold under the brand name Viagra. Use of sildenafil without medical supervision can cause severe adverse reactions.

Concurrent use of Sildenafil with nitrate medications can result in the development of potentially life-threatening low blood pressure and in some cases result in penile tissue damage and permanent loss of potency.

Although there have been no adverse drug reactions reported yet, Health Canada is advising consumers who have used Hua Fo to contact their physicians.

Health Canada reported that they are working with the importer of the unapproved product, Shenlong Company, to remove it off the market.

Hua Fo is manufactured in China by Guizhou Ribulo Medical Industry Inc.

(Source: Canada Newswire)

Blood Industry Will Receive US $270 Million to Ensure Safe Donations

RMB 2.25 billion (US $270 million) will be spent on China's blood banks in an effort to stop the spread of hepatitis and AIDS through tainted blood.

It is planned that the influx of investment will allow blood banks to modernize their equipment and test all blood for the HIV virus. Fourteen firms, both Chinese and overseas, signed contracts recently to provide RMB 396 million worth of equipment and vehicles to blood stations.

The Ministry of Health reported that it estimates 30, 000 - 50, 000 people were infected with HIV through selling blood to illegal blood banks in the 90s. However, some reports have put the real number as high as 700,000 in the central province of Henan alone.

There are currently 10,000 hospitals and 300 blood stations offering blood transfusions in China. The government promised last year to close all illegal blood stations and establish safe networks for blood donations.

Although government officials aim to keep the number of HIV carriers below 1.5 million by 2010, the United Nations has said that infections could be as high as 10 million in 10 years.

(Source: Deutsche Presse-Agentur)

China's WTO Commitments Likely to Attract Many Foreign Hospitals

According to China's commitments in entering WTO, the medical service industry will be opened up and foreign parties will be allowed to cooperate with Chinese parties in establishing co-invested or cooperative hospitals and clinics.

The industry will be formally opened in 2003, which will almost certainly mean a surge of large-scale foreign hospitals entering the domestic medical service market.

So far, there are only roughly 200 cooperative medical centers in China, and the majority are small and cater to foreigners.

According to the commitments, the investment of the co-invested or cooperative medical ventures cannot be less than RMB 20 million and must have at least 100 beds.

It is predicted that the mass introduction of foreign hospitals will lead to new styles of management and operations for domestic medical organs.

(Source: Asiainfo)

International SOS Excited about the Mainland Market

International SOS has stated it will increase its presence in China and strengthen its co-operation with local hospitals.

China's accession into the World Trade Organization (WTO) has brought more opportunities for the world's service businesses, among which medical help is a considerable portion.

International SOS, which started its business in China in 1989, is trying to expand its service network to better cater to the needs of increasing numbers of foreigners coming into the country as well as Chinese seeking better medical services. "China's WTO entry means a big increase in foreign investment, and more companies will send staff here," said Arnaud Vaissie, company president. "The need for emergency assistance will rise sharply." Other overseas medical companies are also squeezing into the growing market. There are more than a dozen clinics in Beijing with overseas investment. Nationwide, the number has reached nearly 200, according to official statistics.

Although most of their clients are foreigners, an increasing number of local Chinese, not satisfied with domestic medical services, are seeking help from these agencies, creating a huge potential market.

Vaissie said his company is planning an alarm center in Kunming, the capital of Southwest China's Yunnan Province, to bolster its service capacity in the country's western region.

The company has already set up three 24-hour alarm centers in Beijing, Shanghai and Hong Kong and opened clinics in Beijing, Tianjin, Nanjing, Guangzhou and Taipei.

It also has established co-operative relationships with more than 150 major hospitals across China.

"Even if a client of ours is in a remote area such as Tibet, he or she can have convenient access to medical treatment in our local co-operative hospitals there," he said.

The company wants its clients to get a better understanding of China's medical system, "which is now quite sound," said He Jingbin, deputy general manager of International SOS' Beijing clinic.

One of the company's partners in Beijing is the Sino-Japanese Friendship Hospital, which receives more than 500 patients a year from the International SOS's Beijing clinic.

"Our hospital can offer technical support to the SOS clinic since it is hard for the clinic to carry out systematic and complicated treatment," said Yan Xiangjian, deputy director of the hospital's medical affairs department.

(Source: China Daily)

Shanghai Hospitals Open to Foreign and Private Funding

The funding pattern of hospitals is changing in Shanghai. According to sources at a meeting held in Shanghai on Wednesday, private and foreign investment will be permitted.

Officials from the Shanghai Municipal Health Bureau said that various financial channels will be opened and that future financial support will come from government, private and foreign sources.

The officials also said that an investment company and a state asset management company will be established by the local government to manage the financing and administration of local hospitals.

However, it is only on condition that the services at public non-profit hospitals do not suffer that the local health services market will be opened up to private and foreign investors.

(Source: Xinhua News Agency)

List of China GMP Facilities (Continued)

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