Friday, March 09, 2007

Chinese Traditional Medicine Policy Proves Problematic

he revision of a long-controversial rule on traditional Chinese medicine (TCM) is stranded amidst heated debates. While the government-led revision committee is analysing its stipulations for future implementation, some experts say the stagnancy is largely a result of the gap between the modern patent system and the protection efforts for traditional knowledge like TCM.

“The Regulation on TCM Prescription Protection is an attempt to offset the insufficiency of modern IP system in preserving intellectual property of TCM, but neither the original rule nor the current revision draft has met this goal,” says Zhang Tao, an associate professor of intellectual property at Beijing University of Chinese Medicine.

Nearly two years after the revision was launched, China’s drug authorities - the State Food and Drug Administration (SFDA) - released the first amendment draft in June 2006, but the texts immediately aroused wide refutations. Since then, no advance of the revision has been reported.

“Each time the regulation revision committee was convened, there would certainly be overheated debates and quarrels,” says Ye Zuguang, one of the committee members and a senior research fellow at the Chinese Academy of TCM (CATCM).

Origin of the Rule

The TCM prescription protection regulation was enacted in 1993 when China released its revised patent law with the country’s first protections of pharmaceutically effective chemical ingredients. Before 1993, China’s patent law did not protect such ingredients, apparently due to the fact that more than 97 percent of its chemical drugs are generic ones.

But for Chinese drug authorities and TCM makers, the term “pharmaceutically effective chemical ingredients” may have presented an insurmountable challenge.

“So far, most TCM makers do not know pharmaceutically effective chemical ingredients exactly in their drugs, said Zhou Chaofan, a senior researcher of CATCM and a member of the reviewing committee of TCM prescription protection. “Each TCM is often a combination of more than 20 herbs, which makes it nearly impossible to extract the most effective compounds.”

But to protect the prescription by patenting the unique combination of herbs is not seen as a solution either. Applying for a patent requires the applicant to publicly demonstrate it, but in terms of TCM’s herb combination, demonstrating the prescription could be disastrous.

“When other drugmakers learn the prescription, they can add or reduce one or two less important herbs, say, a Chinese date, to compose a new type TCM with nearly the same curative effects,” Zhou told Intellectual Property Watch.

The TCM prescription regulation was born as a result of these considerations. In the opening chapter, it stipulates that “subjects of the protection are those not having obtained patent.” Applying for the prescription protection does not require TCM makers to demonstrate their combination of herbs.

For TCM having unique curative effect against certain diseases, its makers can apply for highest level protection, which would give the TCM makers up to 30 years production monopoly. For traditional medicine having remarkable curative effects against certain diseases, the TCM manufacturers can apply for second-level protection, lasting for seven years.

In both situations, TCM makers can apply for protection extensions equivalent to the protection duration they initially enjoyed.

Everlasting Debate

In the past decade, the TCM protection rule seemed to play a useful role, despite the continued debates surrounding its conditions.

Statistics from the National Development and Reform Commission show that the average sales volume of traditional medicine in China has grown by about 20 percent annually since the early 1990s to 110.9 billion yuan (US$l4 billion) in 2005. The figure accounted for 26 percent of the total sales volume of China’s pharmaceutical industry, which was 427.1 billion yuan (US$53.4 billion) in 2005.

Since 2000, several TCM makers have realised sales volumes of more than 10 billion yuan (US$1.2 billion), where sales mainly come from the TCM varieties covered by the TCM protection rule.

But problems remain. The widest spread complaint is that the protection rule has covered too many products, but many also argue that it offers few practical protections to TCM makers.

Among the 9,000 kinds of TCM sold in China, more than 2,000 are on the protection list. According to Zhou, for hepatitis alone there are more than 200 kinds of TCM being protected.

“Too many protections have made it impossible for SFDA to notice whether the individual protected medicine has been infringed,” says Tian Ruihua, general engineer at leading TCM maker Beijing Tongrentang. “The protection rule even becomes a source for the regulators of the TCM protection rule to make money.”

A TCM maker has to pay 15,000 yuan (US$1,875) for each protected type of TCM in the first year and 7,500 yuan (US$937.5) in each of the following protection years. For companies like Tongrentang which have dozens of protected TCMs, it will have to pay tens of thousands of dollars per year for the protection.

Tian admits that in spite of the costs, his company has to maintain the protection status for many of its medicines. Otherwise, people would think these medicines are problematic.

On the other hand, Zhou complains that it is possible that some TCM makers are submitting false clinical trial data to show their “unique curative effects” to the reviewing committee of TCM prescription protection, but the committee is unable or unwilling to conduct a comprehensive investigation due to the large amount of protection applications.

Other complaints include an overly long protection period and the inconsistency between the TCM protection rule and patent laws. Zhang said the thirty years of protection, plus the extension, “is too long to encourage innovation.”

She added that since joining the World Trade Organization, China has encouraged its drugmakers to apply patents to protect themselves. “The old rule’s stipulation that patented TCM is not subject to its protection is apparently contradictory to this principle,” Zhang said.

The revision draft of the TCM protection regulation seems to be a response to the complaints. It stops excluding patented TCM and shortens the protection period to seven years. Also, in an attempt to reduce the number of protected TCMs, the revision draft claims the protection can only be applied to the TCMs having a more remarkable curative effect against certain diseases than their counterparts.

But committee member Ye said that each of the major revisions has been strongly debated. For example, the shortened protection period is seen as difficult to comply with. “If the protection period is shortened to seven years, how to deal with the original 30-year protection which has not invalidated?” he said.

Many TCM makers also claim it is hardly possible to evaluate whether one TCM has better curative effect than its counterparts. The obscure stipulations may induce some TCM makers to make fraudulent clinical data and lead to corruption of the reviewing committee members.

A Narrowing Gap?

While TCM makers are debating the technical details of the protection rule, intellectual property rights experts say the repeated controversies surrounding the rule symbolise the difficulty of the modern patent system in preserving traditional knowledge.

Liu Changhua, a senior researcher of pharmaceutical literature at CATCM, said that despite claiming to supplement the insufficiency of patent laws, the TCM prescription regulation has adopted the same principle embodied in patent law: endowing a monopoly right to certain TCM makers.

“But modern medicine patent is based on a single [pharmaceutically effective] compound, while the TCM prescription regulation is based on the curative effect against certain diseases. You can hardly claim only one or two TCMs have a stronger curative effect than others without objective and parallel clinical research,” said Liu.

But the parallel research is neither required nor possible. As a result, it is natural that the TCM prescription protection covers many more medicines than the patents.

Liu adds that the model of indigenous knowledge preservation, which stresses the local communities’ common ownership of certain knowledge, should replace the modern patent theories to preserve TCM.

But more experts argue that shaping traditional knowledge like TCM to meet modern patent system standards should be a more feasible solution.

“China’s TCM industry is a rather established sector. You cannot bet TCM makers to give up their willingness of monopolising their technologies,” says Zhang of Beijing University of Chinese Medicine.

Xu Bowen, president of Beijing-based IP agent Anboda, said TCM makers should not rely on the prescription regulation. Instead, they can design some patent strategies to maintain their rights, even if their prescription is demonstrated.

“For example, in the right-claiming document of the patent system, you can design to claim certain curative effects only linked to a particular herb combination. In this way, even an openly demonstrated prescription could be protected from being slightly adjusted with additional, ineffective contents,” Xu told Intellectual Property Watch.

Zhou said that even though TCM makers cannot obtain the sole (pharmaceutically effective) compound from their prescription, they can still prove and patent a particular group of curative ingredients marked by the existence of certain chemicals. These chemicals might not be the most pharmaceutically effective compounds, but can be the standard indicators for certain combinations of curative ingredients.

“This has been technically feasible. What is needed is that TCM makers invest in research of their medicines to understand what group of curative ingredients in the medicines,” Zhou said.

But he admits that nowadays, most Chinese TCM makers are financially and technically less equipped to do so. The TCM prescription rule is still necessary as a transitory rule, he said.

“Things cannot be done overnight,” Zhou concluded. “We can slightly revise the TCM prescription protection regulation, but in the long term, encouraging TCM makers to research patentable ingredients in their medicines is the only solution.”

Jia Hepeng may be reached at