Just days before I left China in early September, I accompanied my father, a pioneer of the modern Chinese pharmaceutical industry who developed China’s first antibiotics in the days of the Korean War, to attend the 100^th founding anniversary ceremony of the Chinese Pharmaceutical Association (CPA) in Beijing Hotel.

Upon arrival we were escorted into a waiting room designated for the “former” VIPs. On our way there, however, I spotted another room for the “current” VIPs. When the banquet was ready, my old man was seated next to Wu Zhen, the newly appointed SFDA Deputy Director General responsible for drug registration.

What followed was a mixed bag of things, from solemn speeches, a documentary on CPA’s history, awards, songs, acrobatics, long-legged and belly-exposing Chinese girls dancing Tango, to tasteless jumbo shrimps precooked for a thousand people.

It was also surprising to learn later that my old man did not even exchange a single word with Wu over the three-hour banquet, I guess both of them lacked incentive to communicate – there must be a big generation gap there. Indeed, things have changed drastically since the “good old days”, but I know deep down my old man blames the "current" VIPs for ruining their past efforts in building a self-reliant pharma industry for the country. Obviously he was also not so happy with the 100^th anniversary festivity which managed even to confuse a die-hard liberal like myself.

Having a distasteful celebration is after-all not a big deal, but possessing both an ailing healthcare system and a dysfunctional drug regulation regime is no joke for a country.

The 17^th Congress of the Chinese Communist Party is coming up in mid-October, and the all-weather phrase I have been reading since my high school days, “building socialism with Chinese characteristics”, is back once again all over the mainstream media. But pay attention, this time the powerful Poliburo has been highlighting the word “innovation” amidst a ton of other party buzz words.

It seems safe to predict the party line for Chinese healthcare and drug regulation is “innovative healthcare and drug regulatory systems with Chinese characteristics”.

Inspired, the SFDA demonstrated its innovativeness by drafting supplemental rules for registration of traditional Chinese medicines which are designed to accommodate the special characteristics of TCM. The new rules will simplify registration requirements and improve market access for traditional Chinese medicines markedly by exempting or minimizing clinical trial requirements for certain traditional Chinese medicines, thus boosting the competitiveness of country’s TCM industry against Western medicine companies, particularly multinational companies on the high end market.

SFDA is also quite innovative with its ways of seeking public comments on new regulations. Its drafts for both the above regulation and the proposed “Provisions for Drug Product Recall”, which were posted at its website between September 17 and 19, the agency allowed only ten days for the public to submit any comments. I would call it “public comment solicitation with SFDA characteristics”.

I also have an issue with the Mandarins who always seek to reserve some “open ends” for themselves in the regulations they come up with. Let’s take the draft “Provisions for Drug Product Recall” as an example, in defining the kinds of safety hazards warranted for recall, a list of specific situations is given but the last one is read as “other reasons that may cause drug products to be hazardous to human health”. Certainly the Mandarins will not forget to add an article at the end of the regulation to say the regulation is interpreted by the SFDA.

Does anyone recall the instance when SFDA was sued a few years back by Shenyang Feilong Pharma because the agency banned the sales of the company’s TCM drug under the trademark of "Weige" (the popular Chinese name for Viagra) by declaring the product to be a fake drug? The company argued that its product was an approved product by the SFDA but eventually lost its case because the agency was protected by one of its many “other” clauses or "open ends". As a revenge, the president of the Shenyang company applied for the registration of "Zheng Xiaoyu" as the trademark for rat poison after Zheng’s fall from power in late 2006 to humiliate him.

In a separate development, a number of senior SFDA officials are believed to be heading for the US next month in search of regulatory related knowledge, experience and inspirations from their US counterparts and the pharmaceutical industry there. While their desires to learn is worth some applause, I have long suggested that they should focus their learning and fact finding on how the USFDA enforces and ensures compliance of their regulations.

Transplanting US regulatory standards to China alone is unlikely to produce the desirable results. This is where the SFDA should demonstrate some innovativeness to ensure “Chinese characteristics”. I need to point out here that the US government neither subjects its drug products to price-setting and repeated price cuts, nor does the country need its drug industry to help fund its medical institutions. Therefore, SFDA officials should always bear in mind the financial sustainability of Chinese pharmaceutical industry before introducing any newer and higher standards.

Talking about Chinese characteristics, SFDA’s “Rules for Package Inserts and Labeling of Drugs”, which will be effective as of October 1, deserve to be put in the spotlight. The regulation forces pharmaceutical companies to dominantly display their generic drug names while downsizing their brands on the packaging of their drug products, including OTC products. This obviously has frustrated many leading OTC companies but the SFDA has gone ahead with it anyway - so be prepared for innovative OTC drug packaging with “Chinese characteristics” on October 1.

Well, enough bashing of SFDA, let’s turn to the Ministry of Health (MOH), which seems to have been in a hot seat recently.

2007 hasn’t been a good year for the MOH and it has been facing a number of challenges including persistent corruption, rising violence and shortage of certain low-price drug products in hospitals, and increasing patient lawsuits against hospitals - not only for medical malpractices, but also for adverse drug reactions or fake drugs.

What’s worse, its once popular idea for universal insurance and government funding of hospitals was brushed aside by the central government under strong objections from the Ministry of Fiscal Finance and the Ministry of Labor and Social Security (MOLSS) due to their own different reasons. Gao Qiang was also practically demoted and a new Health Minister with inclination for market-orientation in healthcare was installed.

Now that an initial draft of the country’s future healthcare reform plan is near completion with MOLSS emerging as the clear winner, the MOH is increasingly concerned about the future finance of public hospitals. If the “blood line” from the pharmaceutical industry to the medical sector is cut off effectively, the revenues from the basic medical insurance programs can barely keep public hospitals alive, not to mention development or retaining talents. Once in charge, MOLSS will make sure medical institutions to become competitive and competent service providers, and predictably the payments from basic medical care insurance programs will be lean and mean.

MOH officials are now desperately seeking support and alternatives from anyone who would lend an ear, to the extent they threw out “innovative” ideas such as a prescription fee system for doctors that even they themselves are pessimistic about gathering public support.

The only thing they are reluctant to touch on is how the inefficient public hospital system can be improved through structural reform and possibly privatization. The reform to the Chinese medical sector is long overdue and it is time to put some innovative “Chinese characteristics” to it like what was already done to most other Chinese industries years ago.

RDPAC, the association for R&D-based multinational pharmaceutical companies in China, has been stepping up its influence in the healthcare sector through quiet and gentle maneuvers, much like the "peaceful rise" development model projected by the Chinese government for the country.

An NDRC drug pricing official delivered a speech recently about the directions the agency is heading for future drug price-setting. I have to say she sounded like being brainwashed by RDPAC although she tried to weaken that influence through the use of some vague concepts short of spelling out “pharmaco-economics”, which has been advocated by the association all along. Obviously the recent international price comparison study by NDRC (facilitated by RDPAC) also gave her some spine and inner strengthen to draw from. 

In addition, RDPAC worked with a leading PR agency from June on a six month campaign to help differentiate and advance the image of medical representatives of its member companies. Just last week, it launched, in high profile and with attendance of many local healthcare related associations, the third edition of its “Code of Practice on the Promotion of Pharmaceutical Products”. Earlier in the year, RDPAC began its Medical Representative Certification Program that has been expanding rapidly.

While RDPAC’s move to self-regulate the medical representatives has received reasonable public and official support, some local press seem cynical about the ability of RDPAC to turn the tide. Many local executives also have watched these activities feeling sour, believing the events to be efforts by multinational companies to differentiate themselves from the rest of the industry.

Nonetheless, when cynicisms and conspiracy theories are put aside, one has to admit these are effective strategies to improve MR access to hospitals and corporate image.

Let me conclude with congratulations on the peaceful rise and growth of RDPAC and its member companies in the new “innovative healthcare system with Chinese characteristics”.