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IN late 2010 and early 2011, Lanzhou Foci Pharmaceutical Co.,Ltd., a manufacturer of traditionalChinese medicines (TCM) in GansuProvince, experienced a sudden heavyincrease in orders from Europe. "Theywere stockpiling medicines becausethey knew the EU was about to raise thethreshold for entry requirements forTCM," Sun Yu realized; he is the company’s deputy general manager and headof a cooperation program on TCM between the EU and the eompany. Sun wasright, and the new rule entered effect asof April1, 2011
The new threshold for entry requiremerits refers to the European Directive on Traditional Herbal MedicinalProducts (THMPD). Though adopted in2004, the directive provided for a transition period of seven years for productsthat had already entered the Europeanmarket, allowing them to be sold as dietary supplements in the interim. As thetime limit has expired, herbal remediesare now required to have authorizationbefore being sold there. To date, no Chinese TCM company has ever successfullyregistered its products as drugs in theEU.
Facing the Challenge
Foci Company is one of the few Chinese firms that had already started toregister their TCM products in the EU.The registration work began in 2009and the company chose their best-sellingConcentrated Pill of Angelica. It waspart of a strategic adjustment for thecompany in the wake of the failure it suffered in 2oo6 when trying to register acompound medicine.
"Concentrated Pill of Angelica contains only one ingredient-angelica. It’ssafe and the effects have been identified," Sun explains. Besides that, relatedresearch and technical support on angelica have been perfected in China.
Before starting the application process, Foci Company managers met withconsultants and experts in the TCMcommunity to analyze the THMPDand determine whether Foci met therequirements stipulated by the legislation, including the one that justifies thesimplified registration procedure butdismays many would-be applicants inChina-that the registration applicationmust be accompanied by "bibliographicalor expert evidence to the effects of themedicinal product in question, or of acorresponding product that has been inmedicinal use throughout a period of atleast 3o years preceding the date of theapplication, including at least 15 yearswithin the Community."
Foci, with 8o years in the TCM industry, satisfies the requirement for sellingtime on the European market, and moreimportantly, can provide papers of customs clearance and declaration in theNetherlands, Italy and the UK that makemedicinal specifications of its products.For most manufacturers however, it isnot easy to offer the proper customsforms since it was not uncommon fortraditional medicinal products to be exported as food.
The company chose Sweden as its firstplace for registration. In March 2010,Foci submitted the evaluation materials for Concentrated Pill of Angelica to theSwedish Medical Products Agency. Oncereviewed by Swedish experts, the product was accepted as a drug and was thenallowed to apply for EU registration.
In July 2010, Foci organized a special application team consisting of stafffrom its R&D Center and Departmentsof International Marketing, Productionand Quality Control. The company alsoworked with experts from the ChinaAcademy of Chinese Medical Sciences toreview the product on the principles ofGood Laboratory Practice (GLP). In early March 2011, the improved applicationdocuments were submitted to SwedishMedical Products Agency.
"We were told that the result wouldbe available in 20o days. That is to say,our product would be successfnlly registered by the end of this year at the earliest," says Sun Yu. That’s why Europeanimporters stocked up on TCM productsright before the expiration of the transitional period. From April 1,9011, onlyTCM medicines in stock could be sold inEurope.
In response to the Directive, China’sMinistry of Commerce, China Chamberof Commerce for Import & Export ofMedicines & Health Products and someother related departments convened ameeting with TCM companies at the endof 9010, recommending 11 medicinesstart the registry process in the EU. Fiveof them were manufactured by Foci,while Beijing Tongrentang Group Co.,Ltd. and Guangzhou Qixing Pharmaceutical Co., Ltd. produced the others.
Guangzhou Qixing PharmaceuticalCo., Ltd. was approved by the simplifiedprocedure for registration of traditionalherbal medicinal products in the UK andgot the Good Manufacturing Practice(GMP) license. The Di’ao XinxuekangCapsule produced by Chengdu Di’aoPharmaceutical Group Co., Ltd. alsopassed the examination with the Dutchauthority and got the EU GMP license.
Opportunities Alongside
Some people regard THMPD as atrade barrier, but Sun Yu doesn’t see itthat way. "I understand and agree withthe EU’s act since it offers open and fairopportunities to all herbal drugs." Sunfeels this shows an open attitude, allowing applications for registration ofherbal medicines through a simplifiedprocedure that does not require clinicaltest results; it merely archives efficacydata and certifications endorsed by experts. "It is understandable that the EUis concerned about drug safety withinits member states. We do not need tooppose this directive." Sun continues:"TCM companies that are trying to find aglobal market should have an open andcooperative attitude too."
Huang dianyin, deputy secretary general of the World Federation of ChineseMedicine Societies, also considers theDirective an opportunity for, rather thana blockade against, traditional Chinesemedicines. "The Directive offers a legalbasis for TCM to be sold as drugs in Europe. At the same time, it opens the doorfor TCM manufacturers to enter majorherbal markets and expand sales than nels in Europe."
In the past, traditional Chinese medi-cines were sold as food or tonics, butwith registration and approval, they canbe sold as drugs. This situation, Huangpoints out, will actually help to expandthe TCM market in Europe, guaranteethe quality of drugs and enhance thegood reputation of TCM.
In Sun’s estimation, most firms arenot ready for the application processas they believed the domestic marketwas already vast enough and paid littleattention to the overseas market, withthe exception of Southeast Asia. What’smore, difficulties understanding thelaws and regulations of North Americaand Europe also set these companiesback.
"It is tough for a company to registersuccessfully by relying only on its owntechnical strength," Sun explains. "Inaddition, registration is very expensive."He gauges the total registration cost fora single-ingredient product is in the ballpark of RMB 5 million, not to mentionthose for compounded ingredient drugs.
In spite of this, Sun expects Fool’smedicines will finally be approved bythe EU, and the company is preparing tomake applications for even more prod-ucts. "We are confident with the results,that’s why we began the second round ofapplications while our first product wasstill in the approval process," Sun affirms.
Standardization Inevitable
According to Huang Jianyin, EUcountries implement the Directive differently due to the status of the legislation and the administrative pattern ofthe union.
The EU has four ways to regulatemedicines-stipulations, directives,decisions and proposals. In terms ofdirectives, EU has set a management objective but the member countries are allowed to carry it out in accordance withtheir own circumstances. For example,the Netherlands does not implement theDirective at present. And in the case ofTCM, the Directive itself applies onlyto patent medicines; ready-for-use prepared herbs and single ingredient granules can still be sold as food or dietarysupplements.
Huang Jianyin suggests TCM companies focus on long-term prospects.Traditional Chinese medicine is alwaysregarded as complementary to the practice of medicine in Western countries.For example in the U.S., no traditionalChinese medicine has passed the FDA’sexamination and none can be used asmedicine in this country.
According to Huang, apart from cultural differences, TCM is hard pressed tobe accepted on par with pharmaceuticalsin Western countries since TCM companies have not gone far enough to proveeither the safety or the effects.
It has been revealed from time totime in recent years, that certain products contained heavy metals exceedingthe allowable standard. Therefore, aninternational standard for TCM is an absolute necessity.
In 2010, in cooperation with the International Standardization Organization (ISO), the State Administration ofTraditional Chinese Medicine of China set up a technical committee to formulate international standards for TCM.Traditional Chinese medicines are verystrict with respect to ingredient compatibility. Therefore standardization is adaunting project that must be accomplished in several stages.
On December 3, 2OLO, the ChineseMedicine Ordinance was put into effect in Hong Kong. From that point on,prepared Chinese medicines that failedto register were banned on the HongKong market. More and more countriesand regions are enacting these sorts ofregulations for traditional Chinese medicines. In a sense, it gears up the standardization development of TCM andimproves the products’ safety.
In 2010, China’s exports of TCMproducts were US $1944 billion, ofwhich ready-for-use prepared herbalproducts were US $776 million. Thoughpatent traditional medicines were soldto 143 countries and regions worldwide, the export value was only US $19.3million.
According to Sun Yu, North Americais the largest purchaser of Foci productswhile Europe imports the least. But Sunvalues the technical benefits they willgain from the new rule that enables it topresent its products as drugs in Europe,a region which excels in herbal drugresearch. Sun hopes that with technicalsupport from the EU, they can find someconnection between TCM and otherherbal drugs so as to boost the development of TCM itself.
To Sun’s delight, more and moreoverseas consumers, including Europeans, have begun to accept traditionalChinese medicine and trust its curativeeffects. Many overseas educational institutions are training traditional Chinesemedicine practitioners as well.
"Today, as antibiotics are being moreand more abused, people are turningto herbal medicines. At the same time,Western medicines are proving to beslow in developing effective treatmentsfor cancer and AIDS. It’s a chance froTCM to grow," Sun concludes.
The new threshold for entry requiremerits refers to the European Directive on Traditional Herbal MedicinalProducts (THMPD). Though adopted in2004, the directive provided for a transition period of seven years for productsthat had already entered the Europeanmarket, allowing them to be sold as dietary supplements in the interim. As thetime limit has expired, herbal remediesare now required to have authorizationbefore being sold there. To date, no Chinese TCM company has ever successfullyregistered its products as drugs in theEU.
Facing the Challenge
Foci Company is one of the few Chinese firms that had already started toregister their TCM products in the EU.The registration work began in 2009and the company chose their best-sellingConcentrated Pill of Angelica. It waspart of a strategic adjustment for thecompany in the wake of the failure it suffered in 2oo6 when trying to register acompound medicine.
"Concentrated Pill of Angelica contains only one ingredient-angelica. It’ssafe and the effects have been identified," Sun explains. Besides that, relatedresearch and technical support on angelica have been perfected in China.
Before starting the application process, Foci Company managers met withconsultants and experts in the TCMcommunity to analyze the THMPDand determine whether Foci met therequirements stipulated by the legislation, including the one that justifies thesimplified registration procedure butdismays many would-be applicants inChina-that the registration applicationmust be accompanied by "bibliographicalor expert evidence to the effects of themedicinal product in question, or of acorresponding product that has been inmedicinal use throughout a period of atleast 3o years preceding the date of theapplication, including at least 15 yearswithin the Community."
Foci, with 8o years in the TCM industry, satisfies the requirement for sellingtime on the European market, and moreimportantly, can provide papers of customs clearance and declaration in theNetherlands, Italy and the UK that makemedicinal specifications of its products.For most manufacturers however, it isnot easy to offer the proper customsforms since it was not uncommon fortraditional medicinal products to be exported as food.
The company chose Sweden as its firstplace for registration. In March 2010,Foci submitted the evaluation materials for Concentrated Pill of Angelica to theSwedish Medical Products Agency. Oncereviewed by Swedish experts, the product was accepted as a drug and was thenallowed to apply for EU registration.
In July 2010, Foci organized a special application team consisting of stafffrom its R&D Center and Departmentsof International Marketing, Productionand Quality Control. The company alsoworked with experts from the ChinaAcademy of Chinese Medical Sciences toreview the product on the principles ofGood Laboratory Practice (GLP). In early March 2011, the improved applicationdocuments were submitted to SwedishMedical Products Agency.
"We were told that the result wouldbe available in 20o days. That is to say,our product would be successfnlly registered by the end of this year at the earliest," says Sun Yu. That’s why Europeanimporters stocked up on TCM productsright before the expiration of the transitional period. From April 1,9011, onlyTCM medicines in stock could be sold inEurope.
In response to the Directive, China’sMinistry of Commerce, China Chamberof Commerce for Import & Export ofMedicines & Health Products and someother related departments convened ameeting with TCM companies at the endof 9010, recommending 11 medicinesstart the registry process in the EU. Fiveof them were manufactured by Foci,while Beijing Tongrentang Group Co.,Ltd. and Guangzhou Qixing Pharmaceutical Co., Ltd. produced the others.
Guangzhou Qixing PharmaceuticalCo., Ltd. was approved by the simplifiedprocedure for registration of traditionalherbal medicinal products in the UK andgot the Good Manufacturing Practice(GMP) license. The Di’ao XinxuekangCapsule produced by Chengdu Di’aoPharmaceutical Group Co., Ltd. alsopassed the examination with the Dutchauthority and got the EU GMP license.
Opportunities Alongside
Some people regard THMPD as atrade barrier, but Sun Yu doesn’t see itthat way. "I understand and agree withthe EU’s act since it offers open and fairopportunities to all herbal drugs." Sunfeels this shows an open attitude, allowing applications for registration ofherbal medicines through a simplifiedprocedure that does not require clinicaltest results; it merely archives efficacydata and certifications endorsed by experts. "It is understandable that the EUis concerned about drug safety withinits member states. We do not need tooppose this directive." Sun continues:"TCM companies that are trying to find aglobal market should have an open andcooperative attitude too."
Huang dianyin, deputy secretary general of the World Federation of ChineseMedicine Societies, also considers theDirective an opportunity for, rather thana blockade against, traditional Chinesemedicines. "The Directive offers a legalbasis for TCM to be sold as drugs in Europe. At the same time, it opens the doorfor TCM manufacturers to enter majorherbal markets and expand sales than nels in Europe."
In the past, traditional Chinese medi-cines were sold as food or tonics, butwith registration and approval, they canbe sold as drugs. This situation, Huangpoints out, will actually help to expandthe TCM market in Europe, guaranteethe quality of drugs and enhance thegood reputation of TCM.
In Sun’s estimation, most firms arenot ready for the application processas they believed the domestic marketwas already vast enough and paid littleattention to the overseas market, withthe exception of Southeast Asia. What’smore, difficulties understanding thelaws and regulations of North Americaand Europe also set these companiesback.
"It is tough for a company to registersuccessfully by relying only on its owntechnical strength," Sun explains. "Inaddition, registration is very expensive."He gauges the total registration cost fora single-ingredient product is in the ballpark of RMB 5 million, not to mentionthose for compounded ingredient drugs.
In spite of this, Sun expects Fool’smedicines will finally be approved bythe EU, and the company is preparing tomake applications for even more prod-ucts. "We are confident with the results,that’s why we began the second round ofapplications while our first product wasstill in the approval process," Sun affirms.
Standardization Inevitable
According to Huang Jianyin, EUcountries implement the Directive differently due to the status of the legislation and the administrative pattern ofthe union.
The EU has four ways to regulatemedicines-stipulations, directives,decisions and proposals. In terms ofdirectives, EU has set a management objective but the member countries are allowed to carry it out in accordance withtheir own circumstances. For example,the Netherlands does not implement theDirective at present. And in the case ofTCM, the Directive itself applies onlyto patent medicines; ready-for-use prepared herbs and single ingredient granules can still be sold as food or dietarysupplements.
Huang Jianyin suggests TCM companies focus on long-term prospects.Traditional Chinese medicine is alwaysregarded as complementary to the practice of medicine in Western countries.For example in the U.S., no traditionalChinese medicine has passed the FDA’sexamination and none can be used asmedicine in this country.
According to Huang, apart from cultural differences, TCM is hard pressed tobe accepted on par with pharmaceuticalsin Western countries since TCM companies have not gone far enough to proveeither the safety or the effects.
It has been revealed from time totime in recent years, that certain products contained heavy metals exceedingthe allowable standard. Therefore, aninternational standard for TCM is an absolute necessity.
In 2010, in cooperation with the International Standardization Organization (ISO), the State Administration ofTraditional Chinese Medicine of China set up a technical committee to formulate international standards for TCM.Traditional Chinese medicines are verystrict with respect to ingredient compatibility. Therefore standardization is adaunting project that must be accomplished in several stages.
On December 3, 2OLO, the ChineseMedicine Ordinance was put into effect in Hong Kong. From that point on,prepared Chinese medicines that failedto register were banned on the HongKong market. More and more countriesand regions are enacting these sorts ofregulations for traditional Chinese medicines. In a sense, it gears up the standardization development of TCM andimproves the products’ safety.
In 2010, China’s exports of TCMproducts were US $1944 billion, ofwhich ready-for-use prepared herbalproducts were US $776 million. Thoughpatent traditional medicines were soldto 143 countries and regions worldwide, the export value was only US $19.3million.
According to Sun Yu, North Americais the largest purchaser of Foci productswhile Europe imports the least. But Sunvalues the technical benefits they willgain from the new rule that enables it topresent its products as drugs in Europe,a region which excels in herbal drugresearch. Sun hopes that with technicalsupport from the EU, they can find someconnection between TCM and otherherbal drugs so as to boost the development of TCM itself.
To Sun’s delight, more and moreoverseas consumers, including Europeans, have begun to accept traditionalChinese medicine and trust its curativeeffects. Many overseas educational institutions are training traditional Chinesemedicine practitioners as well.
"Today, as antibiotics are being moreand more abused, people are turningto herbal medicines. At the same time,Western medicines are proving to beslow in developing effective treatmentsfor cancer and AIDS. It’s a chance froTCM to grow," Sun concludes.