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China’s Internal Drug Market: A Mess

This story has been making the rounds the last few days, and it’s interesting on several levels. A report in the Chinese newspaper Economic Information Daily says that the Chinese SFDA (State Food and Drug Administration) has been conducting a review of Chinese clinical trial practices, and after reviewing 1,622 trials has found that most of them are seriously flawed. And by “seriously flawed”, they mean “largely faked”. The story says that “More than 80 percent of applications for mass production of new drugs have been canceled in the light of the findings, with officials warning that further evidence malpractice could still emerge in the scandal.”

It’s important to note that these are (mostly? completely?) trials for the internal Chinese generic market that they’re talking about, combinations of existing drugs:

Healthcare professional Luo Liang told RFA that the domestic pharmaceutical industry struggles to turn a profit under current conditions.

“The domestic market for Western pharmaceuticals in China is either confined to very straightforward generic products that have been around for a long time … or revolves around joint-venture pharmaceutical manufacture with foreign companies,” Luo said.

“Either that, or Chinese pharmaceutical factories get hold of the formula for certain drugs whose patents have expired,” he said. “There are no new drugs in development in the same way that there are overseas.”

Unfortunately, that seems to be pretty accurate. People have been wondering for quite a while when China would come up with its own pharma R&D powerhouse, but so far (at least as far as I can see) this hasn’t happened. What does seem to have happened is the proliferation of people who are looking to turn a quick yuan by banging out “trials” of cheaply made drugs discovered somewhere else. And as many stories have shown over the years, the pharma sector is not the only one in China with this attitude.

It’s interesting that the Chinese government is putting this story out, though – I have to assume that any major story appearing in a Chinese newspaper has been approved by one government ministry or another. It’s embarrassing to make such information public, and the government likes that even less than in many other countries, so they must figure that handling the problem in this manner is worth it. Perhaps to put a scare into some of the generic drug folks? We’ll see if there’s a sequel to all this (arrests, etc.)

53 comments on “China’s Internal Drug Market: A Mess”

  1. steve says:

    China is clearly trying to modernize its drug business and weed out bad actors. They did the same with the proliferation of unlicensed stem cell clinics. To their credit they cracked down on a major medical tourism operation in favor of allowing only clinically validated stem cell procedures. There is much to criticize about the Chinese government but it seems that SFDA takes its job seriously and is trying to bring the Chinese pharmaceutical business to be in line with modern standards.

  2. Anon says:

    But it’s oh so cheap for Pharma to outsource its R&D to China, right?

    Yeah, cheap until you find out that it’s all made up and you have to clean up the mess.

    This issue of knock-offs, plagiarism and downright fraudulent fakery isn’t just an anecdote, it’s buried deep into the very fabric of their culture. Avoid at all costs or pay a heavy price.

    1. Nick K says:

      The people in the C-suites don’t care: by the time the dishonesty and fraud of Chinese outsourcing becomes apparent, they will be long gone and looking for a yacht or villa even bigger than the ones they already possess.

    2. uhoh says:

      “it’s buried deep into the very fabric of their culture”

      Mr. Trump, is that you? Or just another xenophobe… You speak of a culture so expansive and rich in such a dismissive and derogatory way, it shines a bright light on your insecurities.

      1. A Nonny Mouse says:

        Unfortunately, it is true.

        My friend’s daughter returned to the UK a few years ago having spent 10+ years working in China. She loved the place but the culture described above was endemic from the top to the bottom and she just could not take it any more.

      2. Janex says:

        China’s culture right now is similar in a lot of ways to that of Wells Fargo (worse in some ways, the “employees” don’t have the ability to “quit”). You get what you reward and what you fail to punish. For decades the mantra from the top (which controls everything to an extent unimaginable to western society) was pursuit of growth at all costs. Those who gave the appearance of success were rewarded, discernment were punished. And now like Wells Fargo, the chickens have come home to roost.

        Culture is mutable. Both China and Wells Fargo can change their culture of corruption but it starts at the top. To date Wells Fargo has been an epic fail… Punishing low level employees who were desperate while allowing the elites to get away with it. We’ll see if China does better. It will take more than sacrificing a few corrupt individuals. They will have to truly change. Publicly announcing that most clinical trials were flawed is a good start but it is only a start.

        1. Hap says:

          I think Wells Fargo is failing at getting rid of misconduct because there is no independent authority – other than the large institutional stockholders, the people that own it can’t tell them what to do, and the board which is supposed to do so won’t because of personal relationships and because they made money from the misconduct. Is there something in China that’s going to make its executives (the Communist Party) care what anyone else thinks? If not, then it’s going to be difficult for them to be willing to accept slower growth and less money to reduce corruption. There’s also a very large supply of cannon fodder to expend to convince people that something is being done without actually affecting the people who make the rules – so if they have an easy way to dissipate internal dissent while not changing, and if there isn’t someone to make them change, they won’t,

          1. Scott says:

            You need someone to explain to The Party how the culture of faking success is imperiling The Party’s hold on power.

            That will very quickly cause a turn-around in what they reward. Just need to approach the problem from the proper perspective.

      3. CMCguy says:

        uhoh based on a few direct observations and readings I do believe there is a strong “tradition” in Chinese culture for acceptance of stretching or breaking rules in the name of “doing business” means getting what they want at the expense of others. Like any that stereotype can be abused or flawed because come downs to building compatible relationships and trust with individuals. However we shouldn’t look in the mirror to hard since I also think there are the same inherent practices in Western cultures where “caveat emptor” constantly invoked and I do not know if there is a Chinese equivalent or if the West just better at using lawyers to manipulate the systems.

      4. anon too says:

        Ironically it is our western values of what is right and wrong about ethics and how other cultures should be treated that leads people like uhoh to not accept other cultural norms and push their own. These norms are pervasive and anyone that has lived in China or worked with an all-Chinese firm (as I have) understands this all too well. It is what it is and we just need to stop passing judgement on them. Complaining that a mountain is high or chiding someone for complaining about the mountain does not change the mountain. We can no more change a mountain than we can change their culture. It is folly that CEOs, with their exaggerated sense of control, ignore the mountain that is Chinese culture with dreams that it will be westernized for our financial gain. Western financial proselytizers are just false prophets who work with their Chinese collaborators who generate false profits. Which one is to blame?

        1. uhoh says:

          I am not pushing anything, or denying that fraudulent behavior takes place both in China and the West. I simply pointed out that this news should not cause one to have the knee jerk reaction of shooting off statements suggesting the entire culture is dubious, and that working with or in China should be avoided at all costs. I think this is a pretty fair comment for me to level, and I am not pushing anything other than common sense and decency.

  3. luysii says:

    This is just further proof that China is getting serious about science. They are building the worlds largest single dish telescope in a natural depression in the gorgeous spiky mountains of Guizhou. It is 500 meters in diameter (Arecibo is 305). The purpose is pure intellectual curiosity, rather than any immediate economic payoff. Of course, with the project come bragging rights, as they always do with any program of this size. Bravo to them. [ Nature vol. 537 pp. 593 – 594 ’16, Science vol. 353 pp. 1488 – 1491 ’16 ].

    1. matt says:

      I think the purpose, like many many other capital expenses they’ve incurred and subsidized, is to do a Keynesian Lift on the bootstraps of their economy (and possibly to spend American dollars outside their own private economy to avoid strengthening their own currency any further). They also built enough office space for every person on the planet, right? And high-speed rail not only across their own country, but also rail through India, Burma, Malaysia, Russia, and across Africa. But yes, for whatever purpose, hopefully good for themselves and good for the rest of humanity.

  4. exGlaxoid says:

    I have seen a serious problem with Chinese research in my own experience, you should only do work in China if you have people there doing QC constantly, and then you still need to check and recheck the work. Is it worth the savings, maybe, maybe now, depends on the work. Some things (like manufacturing low value items) just cannot be done cost effectively in the US now, but IMO most R & D should not be outsourced to China.

  5. luysii says:

    Along these lines — A friend, an emeritus prof of chemical engineering, referees a lot of papers. He estimates that 80% of the papers in his field, quantum chemistry, coming from China are absolute trash. According to him China gives bonuses to people getting published in high impact journals. What he finds particularly appalling is that he writes up a detailed list of corrections and improvements for the paper, and then finds it published totally unchanged in another journal. This from 2015

    1. Anon says:

      With all due respect, getting serious about science has been a goal of the PRC’s. To equate this “seriousness” with the utterly callous disregard of medical safety, efficacy and, bottom line, TRUST, in the drug providers, underscores the pursuit of $$$ over the concern for the health and well being of the populous. I have followed and respected your posts over the years, but you, as a physician, to have overlooked or not appreciated how little regard the powers that be in China have over those you trust their drug companies to provide safe medicaments, is appalling

      1. luysii says:

        I don’t think I equated the two. Sorry if I gave that impression.

        Throwing out spurious studies is a form of scientific seriousness, and about time. Nothing appears in the mainland press over there without approval of the powers that be.

        When in practice I had to write all sorts of letters to Medicaid, saying (in particular) that generic forms of anticonvulsants and dopaminergic compounds were worthless and not to be used. Many of these were made abroad (not sure where — some definitely from India).

      2. ChristianKl says:

        There’s related news:

        CFDA has united with more than 25 other government agencies for a coordinated crackdown on drug producers that engage in dishonest activities. The initiative is part of the government’s contentious social credit scheme, which aims to monitor the corporate integrity of companies active in China.
        The plan is to use these powers to more forcefully punish wrongdoers. Companies that get on the wrong side of CFDA could be cut off from government financial support and procurement programs. A negative credit score could also cause a company to be subject to more rigorous tax assessments, encounter barriers when applying for customs certificates or suffer many other difficulties intended to punish their behavior.

        It seems like there’s political alignment of many government departments to create change in China.

        1. Janex says:

          The corruption there has gotten so bad and it’s gotten so overt (many of the corrupt weren’t even trying to be discreet about it) that it was triggering unrest in the populace. Those at the very top see corruption by those a few steps below as a threat to their own power and not wanting their power threatened by the indiscretions of their minions have started to take steps. Most of those targeted seem to be either the Chinese version of China’s stupidest criminals (easy targets and the ones causing most of the problems with the general populace by being so obvious) or political rivals of the elite. But to truly fix the problem, the rules must be equally enforced for everyone, not just the current “out” group. We’ll see if they take that step. The release of the data that 80% of drug applications contained fraudulent data is a good first step. That is so broad it’s not just the usual stupid obvious idiots and/or political rivals. That will burn a lot of people in the “in” group as well. It’ll be interesting to see where it leads.

    2. US_academia_is_No_better says:

      So where is the difference to the madness that’s going on in the U.S where universities get funding and hire poeple based on ridiculous citation indices and impact factors?
      In fact, many industrial researchers lost their faith in the current western academia, too!

  6. :X says:

    Just ask GSK: ran a trial based on faked data. hundreds of tox studies were deleted from servers because NOAELs were too low to progress the compound.

  7. Anon says:

    As we know, it’s not just pharma. China is rife with knock-off toys and luxury goods with little or no regard to IP or customer safety, as long as it makes a fast buck. And even when one bad outfit is taken out, 5 more pop up over the road (usually with the same people) to take its place. As I said, it’s buried deep in their culture – not to say that it is completely absent from our own.

  8. Eric says:

    Wow. A lot of China bashing in the comments today.

    I’ve outsourced several toxicology studies to China (preclinical work obviously) and I’ve never had an issue. I visited the CRO and found it to be very professional. It’s certainly possible that they are faking the data once I leave, but that’s true at Covance, Charles River or any other lab.

    I’ve also worked with quite a few Chinese immigrants in my scientific career and have never questioned their integrity. If it were such an endemic problem with Chinese culture I would imagine there would have been more issues.

    The reported fraud is certainly terrible. Be careful when extrapolating that to an entire culture.

    1. Hap says:

      People do what they want when they can get away with it. If the system of behavior allows people to get away with bad stuff to make money or get some other good, people probably will, and if it doesn’t, they won’t. It doesn’t have to imply an inherent racial or cultural difference – it just mean that when the rules of the game are different, people will play differently, and some will even if the cost of playing the game that way is bad for lots of others, (Some will even when the system discourages it – there will likely be fewer of them, however.)

      China’s system seems to have encouraged this, and so you get the behaviors you reward (or behaviors that look like the ones you reward if you don’t care enough to check). If the system changes, people will probably behave differently there, but there were reasons for people in power (who aren’t elected and have no duty to be transparent) to allow the system to be corrupt, and unless those reasons change, there’s still reason for it to be so.

      1. Anon says:

        Spot on. I don’t blame the Chinese per se, just the system “they” have created for themselves to operate within. Bring a chinese person over to the west and they take on a very different persona.

    2. Janex says:

      80% failure is not a minor problem. That is an endemic one. You’ve been lucky not to have had a problem. Assuming that the 80% of human drugs being problematic is also true of pre-clinical, you only had a 20% chance of getting an honest study. It sounds like you found a gem. One of the 1/5 CROs which produces good work.

      With that high of a failure rate, the rot is at the top. Just like the 5000 Wells Fargo employees each individually came up with the same dishonest schemes on their own, right?

      The majority of the 5000 Wells Fargo employees aka scapegoats weren’t inherently dishonest. They were given a choice – be dishonest with the associated guilt or get fired in a jobless recovery and lose your house to foreclosure. But take them out of that toxic environment (find a new job) and they go back to being the reasonably honest people they once were. The elite at the top (who are totally getting away with this) are a different story. Put them in a different environment (a new job) and without the adequate supervision (a board of directors which cares about being honest) and they will go right back to the same old bad behavior because they are inherently dishonest.

      The average every day Chinese individual (aka the majority of the Chinese) is in the same situation as the average Wells Fargo employee. Bring them out of the toxic environment (immigrate or get lucky enough to work for the 1/5 honest companies) and they will be able to exercise their integrity. The handful of individuals at the top who are driving the toxic culture on the other hand will cheat wherever they are. Those individuals will only be honest if forced to by adequate checks. In the pharma case that means super-vigilent study monitors, penalty clauses in contracts etc.

      But as I mentioned above, this sort of culture can change if the people at the top want it too. But that means some hard choices. They can’t just execute cannon fodder, they have to get really serious about what sort of behavior they want to reward. When you reward growth at all costs that is exactly what you wind up with. Publicly acknowledging the problem is a good first step but it’s only a first step.

  9. Emjeff says:

    It’s not the Chinese people that deserves bashing, it’s Communism, and a centrally-planned bureaucratic government that says one thing and expects another. In the last 8 years, we’ve become soft regarding Communism, but the threat still exists.

    1. John Wayne says:

      I’d say that the central problem is large entities that say one thing and expect another. This phenomenon is not (at all) limited to communism.

    2. z says:

      Given India’s decidedly non-communistic government and its similar scandals of misconduct, I doubt it makes to blame the system of government.
      Especially given that this study was likely done and published through the government’s approval rather than exposed through whistle blowers or foreign agencies.

    3. Barry says:

      Although Xi JinPing (some might say Deng XiaoPing) kept the revolutionary rhetoric and the logo, he long ago discarded Mao’s Communism. What Beijing is running is state crony capitalism, with all its flaws. He ran a weak-currency game longer than anyone ever had elsewhere. We have yet to see how that can be unwound.
      But to ascribe this pirate culture to “communism” (or to something intrinsic to the Chinese character) is ridiculous.

      1. Emjeff says:

        Boy when you point out the failures of Communism, the Leftists in the crowd get all testy and pedantic, don’t they?

        1. Hap says:

          Boy, when you bring up actual facts in an argument with a conservative, they get pissy. Must be some sort of allergy. Maybe you can get that treated,

    4. loupgarous says:

      In the past two decades, we’ve had our share of FDA scandals. Sadly, the man who promised us “unprecented transparency and honesty in government” gave us the wife of a hedge fund manager heavily invested in Johnson & Johnson as FDA commissioner, as one of his very first official acts. She served as I haven’t noticed we went Commie in 2009. Authoritarian with a largely impotent legislature, perhaps. But we don’t have a lot of room to talk about China. If you give the right money to the right politician’s family foundation, you can get government to do just about anything.

      1. Hap says:

        I think the commitment to transparency was done with the closed-door meetings with coal companies in 2009. Rather disheartening when being transparent is one of the few things that Obama had the power to do on his own (without Congressional approval).

  10. Pharmaceutical Revolution says:

    I looks like a Great Leap Forward for Chinese clinical trials

    1. Blocked on says:

      It’s going to take more than one lone report to stop the line of tanks that is the PRC clinical trials machine

  11. Wallace Grommet says:

    China is ruled by an unlawful regime, so how can we expect ethical behavior to hold sway in the commercial sector of medicine?

    1. l says:

      Since the current President of the United States has publicly he rules not according to the rule of law, but “with a phone and a fountain pen,” your point is?

      1. zero says:

        The lawfully elected President? The one whose efforts are constantly roadblocked by Congress? The one whose signature law is constantly up for debate in the courts? The one who only resorted to executive orders when all other bridges to progress were nuked by self-destructive idiots? He seems to be doing his job just fine, and with a lot fewer lie-induced fatalities than his predecessor. For those that don’t like him, congress seems to be doing a good job of preventing whatever Fox-induced panic the deep right is worried about this week. Mostly they do that by refusing to do anything, but given the composition of that basket of fools I’d say that’s a net benefit to the people.

        1. loupgarous says:

          The President’s job isn’t “progress.” It’s executing the will of Congress. Not his own will. If Barack Obama had done his job as defined by the Constitution – enforce laws made by our representatives in Congress, there’d be no difficulty. And if a President finds that he is frustrated by Congress, he has the option to resign, as Richard Nixon did.

          Congress isn’t blameless here. In nearly eight years, they’ve allowed their exclusive prerogative to make law usurped nakedly, and the laws they pass violated in a purposeful manner many times. Barack Obama committed each of the offenses outlined by the House Judiciary Committee when they drafted Articles of Impeachment against Nixon. Congress not only had the option, but the duty to do the same to Barack Obama.

  12. simpl says:

    What happened to the 70’s method of approval in countries with little own research: if the drug was selling in the country where it developed, that was accepted as good enough.
    Overall, I’d guess that this has faded away, in favour of trials done locally. That would support a local scientific industry, at the industries two-fold expense; the studies cost money, and each country having its own standards leaves the global applicant chasing many different boundary conditions. That’s more work for little to no benefit, except getting a ticket to market.
    But if the results are really so poor, all this local work encourages is a conclusion that science is about cooking the results. And that conclusion would really be bad value for money.

    1. zero says:

      Just because company A has demonstrated that ibuprofen is safe, effective and stable doesn’t mean that what comes out of company B’s process is safe, effective and stable. Perhaps company B manufactures rat poison on the floor above their ibuprofen process; benchtop samples work fine but the scaled-up pills kill people thanks to avoidable contamination.

      1. simpl says:

        True, zero, but then it would not be likely to have received US approval.
        What I’m saying is even sloppy science costs money, also in local repetitions. So if you feel you can’t trust the results, the companies, or the scientists, why not trust the main approving instances?

  13. Marya Lieberman says:

    A similar case, on a smaller scale, unfolded earlier this year at Semler Research Private Limited, a contract research company located in Bangalore, India. The firm was conducting a bioequivalence study and rather than using the new product, they reused data from the standard. Their main mistake was to leave spreadsheets detailing the substitution on a computer that FDA was able to inspect…

  14. steve says:

    If you’ve read this blog long enough you’ve seen lots of references to fraud, shoddy work, etc. by US and European companies. There is always the temptation to make a quick buck the easy way and there are plenty of examples on all sides. The question is whether the government sets the appropriate standards and enforces them. I remember a front page NY times article a while back where they adjust the transmission of a car so it made a lot of noise and kept backfiring. All that was needed to correct the problem was a simple turn of a wrench. They took it to a bunch of car shops and published the results – some places fixed it for no charge, others tried to charge for an entire new transmission. The point is that the potential for fraud exists everywhere. The fact that SFDA did the study and actually published it is something to be commended. At least they acknowledge that there’s a faulty system and they’re trying to clean it up.

    1. loupgarous says:

      Agreed. And when an major USFDA official can take a company’s shareholders into account when deciding to approve a drug against the advise of the Advisory Committee… we live in a glass house ourselves.

      1. Overthetop says:

        That comparison is non sequitur to the problem that 80% of Chinese trials involve serious malpractice such as faking or hiding data. Feel free to correct me if I’m wrong, but did I miss the part where the clinical trial for Sarepta involved serious malpractice? Janet Woodcock’s approval of Sarepta based on a statistically irrelevant 12 patient cohort is an issue of too much power being vested in a regulatory official, not that Sarepta’s clinical trial folks were faking or hiding data. Two different issues, two separate problems.

        1. loupgarous says:

          I agree that specifically, the two cases are apples and oranges. It’s just important to, while we look very askance at overseas drug study information in general (this very blog’s covered a similar situation in Indian CROs) also make sure we clean our own house.

  15. Ltw says:

    It may seem unfair to criticise an entire culture, but the problem really does seem to be endemic. I’m an electronics engineer and although things seem to have got better, I’m deeply suspicious of Chinese products due to personal experience. In one case, we were supplying a number of electronic traffic signs that were designed with a quick disconnect system for rapid changeover in the field. The power connector on the prototype was sourced from the US and performed fine in terms of weather protection, etc. Our manufacturer substituted a Chinese knock off of the connector for the production run. Clearly a direct copy of the design, looked identical, but they leaked. In the end it seemed that one of the seal materials was a sub standard plastic that didn’t compress properly and left folds in the material for water to seep through. We had to replace them all (in the field, a fun logistical exercise). Fortunately for us manufacturer’s responsibility and cost to fix. But it cost us a lot of time, effort, and reputational damage. I’ve seen and heard about a number of similar problems. I think it’s going to be a while before manufacturing QA in China is going to be up to the point where you can actually trust the spec sheets in the way you generally can for a US/European/Japanese product. There is no way this connector was tested properly for weather protection.

    Note that this doesn’t apply to manufacturing in China by US/European companies – they’re taking advantage of low wages there, but applying their own QA to ensure the product meets requirements.

    1. Scott says:

      Yeah, when China figures out how to do QA, their entire economy is going to change.

      They’ve already had some very expensive lessons in that. Knockoff Honda scooters, for example. Looked just like the Honda scooter, sold for about a third the price. Lasted maybe a year because of insufficiently tough parts. Now nobody will buy those brands, and that’s across the entirety of Southeast Asia.

      1. Anon says:

        Unfortunately the Chinese mentality does not support that view: Why bother to invest and build quality brand value when a) somebody else will come along to steal and trash it; and b) it’s much easier to steal and trash somebody else’s brand value.

        Thus, when everyone else around you is trashing and stealing value, it’s better to do likewise. Classic Nash equilibrium.

        1. Hobbes says:

          Therein lies the problem. China’s concept of “Intellectual property” is at best, hazy, and at worst a case of “intellectual property belongs to everyone, especially us”. Prototypes of machines and electronics show up in China with alarming frequency, knockoff versions of cars are produced with nary a consideration as to the quality of what’s being made. Seriously, it’s like they translated Patent into “Copy me!” or somesuch. I’ve had direct, indirect and third party experience, I can assure you, it’s not a fun time for anyone.

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