Important note: Information in this article was accurate in 2002. The state of the art may have changed since the publication date.
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Wall Street Journal - August 13, 2002
Leslie Chang, Staff Reporter of The Wall Street Journal
Northeast General Pharmaceutical Factory, a state-owned drug manufacturer in the northern city of Shenyang, said the country's State Drug Administration last week gave it the green light to begin producing and selling a drug called AZT in China. AZT was the first medicine approved in the U.S. to treat HIV, the virus that causes AIDS, and is typically used as part of a cocktail of drugs that can inhibit the spread of the disease.
Until now, the cocktail's standard retail price of about $10,000 a year has put it out of reach for all but a handful of patients in China.
"We think there is a real portion of patients who will use this medicine, and we have faith that sales will go well," said Shi Yanling, an executive in the company's information department.
SOARING DRUG PRICES
China has lagged behind developing nations such as Brazil and India in pushing for reduced prices for medicines to treat HIV. Now, the approval for the production of the AZT drug suggests China's government -- and its generic-drug companies -- are waking up to the urgency of confronting the disease. The country has between 800,000 and 1.5 million carriers of HIV, according to estimates by United Nations agencies. Many of them are rural dwellers who contracted the disease through sharing needles or selling blood to unlicensed blood-collection stations. While Beijing has long said it will give fast-track approval for drugs to treat AIDS, including waiving clinical trials, the AZT approval is the first concrete sign that the policy is bearing fruit.
The launch of AZT -- which Northeast General's Ms. Shi said will happen "very soon" in both tablet and capsule form -- could inspire China's burgeoning generic-drug industry to make a broader range of AIDS drugs available at affordable prices. While Ms. Shi said the drug's retail price still needs approval from the price administration bureau of the Liaoning provincial government, where the company is based, she said it will be lower than the drug's retail price in the U.S. The company already manufactures and exports raw materials used to make AIDS drugs in markets including Brazil and India.
Other companies in China also are pushing to enter the market. An executive at Shanghai Desano Biopharmaceutical Co., a private company, said in a recent interview that its application to generically produce and sell ddI, another AIDS drug, received government permission in June to waive clinical trials. A manufacturing license could be issued as early as the start of next year, according to the company, which already has applied to produce three more AIDS drugs and plans three additional such applications by the end of the year. "This signals that the government really attaches importance to this issue," according to the executive, speaking of the first-stage approval for ddI. Officials at the State Drug Administration couldn't be reached for comment.
For now, the AZT approval sidesteps the sticky issue of potential patent violations. Patent protection in China for AZT, which was developed by GlaxoSmithKline PLC, expired at the end of last year, so generic production of the drug doesn't violate any patent laws. But many other AIDS drugs enjoy patent protection in China, potentially putting the government in a position to challenge the world's pharmaceutical giants. But simply offering the AIDS cocktail at a lower price isn't enough.
Despite steep price cuts for AIDS drugs by many pharmaceutical companies to developing countries, progress in getting the drugs to patients in those places has been slow. The logistical problems inherent in such an effort are writ large in China. Getting medicines to people living in remote villages throughout the vast country is one challenge. And the collapse of the rural health-care system over the past decade of reform has left many places with few medical personnel and available funds to handle the distribution and oversight necessary.
Write to Leslie Chang at leslie.chang@wsj.com
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