The SFDA also enacted new regulations on drug oversight, including new regulations covering exhibitions, channels, cold chain
transportation, quality, and other measures.
The government also began to crack down on government corruption. China executed the former SFDA head, Zheng Xiaoyu, in July
for dereliction of duty and for taking $850,000 in bribes. Another former SFDA drug registration director was sentenced to
death for corruption and dereliction of duty, though his sentence was suspended. The SFDA also banned staff from holding shares
in pharmaceutical companies, and created a schedule for local drug administrations with commercial ventures to sever ties.
The crackdown extended to industry, as well. In one example, China's health officials investigated a case involving 1,200
instances of illegal medical advertising. Five medical institutions in Anhui Province were closed and the licenses of nine
medical institutions were revoked.
The government revoked 353 licenses for therapeutics for various reasons, including quality, and rejected 3,049 applications
for new drugs from August 2006 through February 2007. The SFDA also revoked GMP certificates for Guangdong Bioyee Pharmaceutical
Co., due to violation of regulations involving its human immunoglobulin products.
China's SFDA also issued new GLP standards. As of January 2007, all new drug safety evaluations must be conducted in GLP-accredited
laboratories. Only 23 laboratories in China are GLP certified.
Some companies are clearly rising to the occasion. SinoBiomed Inc.'s 2,500 square-meter recombinant human interferon GMP production
plant in Shanghai has its Chinese GMP certification renewed by the SFDA. The generic drugmaker Zhejiang Huahai Pharmaceutical
became the first Chinese manufacturer to pass US FDA inspections (the result of a $13 million, 5-year investment in an anti-AIDS
drug).
A series of steps also show that Chinese regulators are paying more attention to drug safety. The SFDA suspended sales of
three drugs—the Parkinson's drug Permax; methotrexate, used to treat acute leukemia and rheumatoid arthritis; and Novartis's
Zelnorm—because of safety concerns. China's adverse drug reaction (ADR) reports reached a new high in 2006, with 369,392 ADR
reports in 2006, up from 173,000 in 2005 and 70,050 in 2004. The higher numbers most likely indicate better reporting rather
than actual increases.
INCREASED RESPECT FOR IP
In 2006, Pfizer won an intellectual property (IP) lawsuit for Viagra. As a result, two Chinese companies were required to
compensate Pfizer $77,000 for infringing Pfizer's trademark. This suggests an increasing commitment in China to protect IP
rights. The fact that the Chinese company involved had appealed the initial decision also indicates a newfound respect for
rule of law.
SUMMARY
Predicting economic opportunities in China today remains a challenge. As we track trends and market shifts, we see that the
bioscience industries remain a critical component of the economy. China is a centrally planned economy, so market forces are
not the only guides. As the country balances its domestic programs with a shift toward a more market-based economy, it is
difficult to judge accurately how these market opportunities will balance with current healthcare policies, its direction
in life science education, and its economic investment programs. However, recent developments point to generally positive
trends.
Eric Langer is president of BioPlan Associates, Rockville, MD, 301.921.9074, elanger@bioplanassocicates.com
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