Turmoil in China's pharma industry

Posted by: Bruce Einhorn on May 24, 2006

Major new developments in China’s medical scandals, thanks in part to attention from local reporters in Hong Kong and China. A few days ago, I wrote on the New Tech in Asia blog about a toxic breast-enlargement medicine that has left many Chinese women in great pain. In April, the government banned the medicine and some people are now suing the company in Chinese court. On Wednesday, the South China Morning Post (not available to non-paying subscribers) reports that over the past few days thugs have attacked Hong Kong journalists covering the story across the border in Shenzhen. “Shenzhen hospital security guards armed with iron bars punched and kicked Hong Kong reporters yesterday,” reports the SCMP. “Women in white gowns joined in the attack.” This was the second day of attacks on reporters covering the story. Meanwhile, also on Tuesday, several women from Hong Kong were among those who testified at a Shenzhen court hearing appealing a lower-court ruling in favor of Shenzhen Fuhua Hospital, which is where the women were treated and is affiliated with the company that makes the gel. All this was too embarrassing for the city government. On Wednesday, Shenzhen announced that it had shut down the hospital.

In the other big scandal, the death toll from the toxic drug (used for treatment of gallstones) that causes kidney failure is now at 9, up from 5 a few days ago. According to Xinhua, another 9 other people who took the drug are also dead but they “may have died of diseases and other reasons.” That’s the official death toll; who knows how many others have died. The state-controlled media seems to have permission to dig into this case, given the amount of coverage we’re seeing from Xinhua and others, but - as anyone who remembers the way local officials tried to cover up the death toll during the SARS outbreak in 2003 can testify - China has an unfortunate history of not coming clean regarding embarrassing medical news.

That said, the Chinese press is doing some digging. And they’re coming up with some interesting news. According to this report in Xinhua, the chief suspect, alleged fraudulent chemical dealer Wang Guiping, “forged licenses, including his business license, drug registration and manufacturing licenses, to sell products to pharmaceutical companies.” And the Shanghai Daily has gone a step further, pointing out how the drugmaker was able to thrive thanks to incredibly lax oversight. Qiqihar No. 2 “had been making injectable Armillarisin A for many years before it obtained a license for producing the drug last September,” according to a report in the Shanghai Daily. (Emphasis added.) One bit of good news: The fact that state-controlled newspapers in China are reporting all this might be an indication that the government finally has had enough.

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Reader Comments

Tony Chen

May 25, 2006 12:39 PM

China must realize that wealth or ancient glory can not be achieved over night. There are rules to follow and there are prices to pay. We can not cheat nor leave our next generation burden to bear by sacrificing environment etc. to get rich quickly. I am glad China is gradually more open about the scandal and expose such dirts our culture used to hide. Self-critisism is healthy. I hope we continue improvement on IP and innovation.

Jason Genetics

July 16, 2007 08:25 AM

At least these things are actually slowly coming into the news, thats a huge step forward in my opinion.

Samuel Birrell

August 24, 2007 11:36 PM

very true, not too long ago we would never have even heard about it at all.

Weightoss

January 13, 2010 03:53 AM

very true, not too long ago we would never have even heard about it at all. Agreed totally.

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BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.

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