(Bloomberg) — With his health fast-deteriorating from a hepatitis C infection last year, Steven Wang decided to take his life into his own hands. The prescription medicine he needs isn’t available in China, given the nation’s stringent approval requirements for foreign drugs. So, he formulated a make-shift drug cocktail.
From a Chinese manufacturer of pesticides and fertilizers, the Shanghai-based customer-service worker bought a few grams of daclatasvir, the main ingredient in Bristol-Myers Squibb Co.’s drug Daklinza. Because the drug isn’t yet approved in China, the chemical is supplied by Chinese industrial companies for domestic research and to generic drugmakers overseas as a raw pharmaceutical ingredient.
Next, Wang used a weighing scale and a miniature spoon to split the chemical into more than 100 doses that he put into empty capsules bought on Taobao.com, the shopping site that’s China’s version of Amazon. He took the home-made pills for about 12 weeks, together with tablets of an Indian generic version of Gilead Sciences Inc.’s blockbuster Sovaldi, which he says were purchased from a vendor he found by doing a search on Baidu.com, China’s biggest search engine. Wang had learned from his own research that in the U.S. the combination of Sovaldi and Daklinza is approved as a treatment for hepatitis C, a liver disease caused by a blood-borne virus that can damage the liver and even cause cancer. Wang says that at the end of three months he found himself cured of hep C.
He’s fortunate. Patients risk dangerous side effects or drug resistance when they resort to home-made mixtures of powerful chemicals that can be contaminated or mixed incorrectly. Yet, Chinese patients are trying these potentially hazardous methods because some crucial pharmaceuticals are still unavailable as a result of the country’s lengthy approval process for foreign drugs.
Gilead and Bristol-Myers sell their hep C drugs in the U.S. and around the world, allowing Indian drugmakers to sell cheaper generics in more than 100 low-income nations. However, neither brand has been approved in China, which has a drug approval system that typically delays access by several years. That means, the companies are losing out on a chance to reach the vast Chinese market, which by the World Health Organization’s estimates has about 10 million hep C patients.
Chinese chemical companies supply ingredients for hepatitis treatments to Indian generic drugmakers and some of those make their way around the world only to quietly reappear in China. A search on QQ, an online social media system run by Tencent Holdings Ltd., yields scores of chat groups claiming to offer Indian generics or providing medical tourism services to India. Chinese and Indian businessmen say they are ferrying desperate patients to New Delhi to buy the drugs. Meanwhile, some patients like Wang simply cobble together pills from raw ingredients. All of this has spawned a vast grey market for hepatitis medicines that is proving difficult for regulators to police.
“Patients are looking elsewhere,” said Jonathan Chan, an analyst with Decision Resources Group, a healthcare research and consulting company. “They are at risk of buying counterfeit drugs.”
The risk of buying over the Internet without a proper doctor’s prescription is that people may get the wrong medicines for their genotype of virus or they don’t buy enough medicine, and so have incomplete treatment, said Po-Lin Chan, advisor on hepatitis with the WHO’s Beijing office. The new drugs are extraordinarily potent but drug resistance is a risk if incorrectly used, Chan said. And if the course of treatment is not correctly taken, the virus doesn’t get eradicated in the body.
Both Gilead and Bristol-Myers have ongoing clinical tests in the country, and their drugs have been nominated for priority review by the Chinese FDA, which hasn’t said when the approvals might come. The companies declined to specify when they submitted their applications.
For multinationals, getting an innovative foreign drug approved in China can take four years or more because of backlogs at the regulator and China’s requirement that human trials be done locally. China is also ramping up a campaign to slash prices of foreign medicines, an added hurdle for international companies seeking to bring expensive new therapies into the country.
Gilead’s Sovaldi, which can cure the liver disease faster and more reliably than previous drugs, is priced at $84,000 for a 12-week course in the U.S. In 2014, Gilead agreed to let several Indian pharmaceutical manufacturers sell generic versions in 101 low income countries, capping the price of a full course at $900.
A draft policy document seen by Bloomberg News in May showed that the Chinese FDA was considering seeking a guarantee from companies that drugs would not be priced higher in China than in six surrounding markets including India. If such a policy were implemented “it would have significant ramifications on multinational pharmaceutical companies and they have every reason to be concerned about it,” said Ang Wei Zheng, an analyst with BMI Research.
The analyst believes China is unlikely to implement such strict rules and risk further delays to drug approvals. But the policy debate still puts into question the prices that Gilead and Bristol-Myers will be able to command in China for their blockbuster drugs. China’s Food and Drug Administration didn’t respond to requests for comment.
For patients, meanwhile, the ability to buy the drugs will hinge on how they are priced. Wang said he paid 8,000 yuan ($1,200) for 10 grams of the chemical, and the full treatment with the generic pill cost him around 15,000 yuan ($2,200). Accessing a form of treatment that was affordable made the risks worthwhile, he felt. “Of course I was concerned about side effects,” he said. “I figured I would stop taking the drug if there were any risks.”
While the foreign companies wait for approval, demand for hepatitis C drugs is creating a windfall for local Chinese businessmen like Lu Yong, who runs a medial tourism agency. Lu rose to fame last year after being charged with selling counterfeit drugs in 2014 for helping Chinese cancer patients buy cheap generic drugs from India, but was later acquitted. While his line-up now includes providing patients access to hep C drugs, he says he doesn’t bring the medicines into China anymore, but instead flies patients for treatment at private hospitals in India.
A promotional slide for his Bluehealthcare Overseas Medical Consultation displays photos of a local Indian team extending their arms in a welcome to Chinese patients coming off a van, and there are pictures of healthy Chinese meals prepared by a Nepali chef at the company’s “health center.” A seven-day trip to India, including two visits to local physicians, a four-star hotel stay, a course of treatment and other items costs 35,000 ($5,300) yuan, said Lu.
When contacted by Bloomberg, one online vendor, who gave his name as Li, said he got started in the business when looking for the drugs for a cousin, and has since helped connect about 200 patients with Chinese and Indian nationals living in India. They mail the drugs to Chinese patients directly from India, he said, which he believes doesn’t make the process illegal.
Gilead said via e-mail that its licensing agreements cover 101 low-income countries, but licensees aren’t allowed to sell outside of those nations. “However, due to the broad scope of the program we do recognize that additional sources may be selling product and we are actively monitoring the situation,” the company said, adding that it is in talks with the government to get its drug approved in China.
Bristol-Myers said it has recently completed a late stage clinical trial in China for a combination treatment using Daklinza and Sunvepra, which treats a strain of hepatitis C prevalent among Chinese patients. “We do agree that an urgent unmet medical need exists among HCV patients in China, and Bristol-Myers Squibb is working diligently with China health regulatory authorities to help bring new treatment options to HCV patients as soon as possible,” BMS said.
Public-health experts, meanwhile, are also concerned about the threat to patients. There are unknown risks in taking chemical-grade raw drugs without proper formulation to control their release and absorption in the body, says Jessica Burry, a pharmacist who works for medical nonprofit Medecins Sans Frontieres, which advocates for affordable access to drugs.
Chinese search engine Baidu declined to comment and Tencent didn’t respond to questions.
Thousands of miles away in Australia, James Freeman, a physician, says he has helped Australian patients who couldn’t afford them at home arrange to import pharma ingredients from China for their individual use, but demand fizzled out in Australia as government subsidies made the drugs affordable there. Freeman said a few Chinese patients, through travel or family connections, have also approached him for help getting hep C treatments.
The Australian Therapeutic Goods Administration, which regulates medicines, said via e-mail that it advises consumers to “exercise extreme caution” when buying medicines from overseas internet sites because they may contain potentially harmful ingredients and not meet safety standards.
Freeman said he had connected patients with Beijing Mesochem Technology Co. a Chinese chemical manufacturer. Mesochem ships small amounts of the hep C chemicals to patients in countries like Australia where it’s legal for individuals to import pharmaceutical ingredients for their own use as long as they can provide a doctor’s prescription, said Andy Cui, a sales employee with the Chinese company.
But Mesochem also says it does not sell raw drugs to anyone for individual use or commercial production in China because that’s prohibited by Chinese law since the drugs aren’t approved there.
“We find the strange situation of native Chinese coming to Australia to access treatment that originates from home,” Freeman said in an e-mail. The irony strikes Freeman as “akin to exporting ice to Eskimos.”
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