TCS Daily

China's Drug Abuse

By Roger Bate - April 2, 2003 12:00 AM

As if people weren't scared enough by war with Iraq, the recent prospect of a killer virus now jetting around the world has heightened fears of global disasters.

Cases of Severe Acute Respiratory Syndrome (SARS) were first detected in China. However, a number of airline passengers seem to have contracted the disease through a transit point in Hong Kong, and doctors are now investigating other reported cases in Canada, Germany, the UK and the US.

According to the Wall Street Journal, initial indications of the disease's severity appeared nearly four months ago. But Chinese officials waited until early March to contact the World Health Organization.

Yet this is not the first time that Chinese health officials have "contained information" at what could be a great cost to human lives. There are many reports of severely delayed responses to the AIDS crisis in China, and less than adequate information about the dangers of selling blood, which helped contribute to the spread of AIDS.

Also little known is the fact that China is the center of fake drug production for the globe. Fake anti-malarials, anti-AIDS drugs, and fake Viagras are hitting the streets in developing countries (and even a few wealthy nations), and people are dying as a result.

Fake drugs fall into two broad categories: those that act like placebos, which contain no active ingredient and are made from talcum powder, and drugs made from actively harmful chemicals. According to the Chinese newspaper Schenzhen Evening News, over 192,000 Chinese died from fake drugs in 2001.

Chinese Premier Zhu Rongji, has avoided the question of fake drugs at several press conferences, including one that I witnessed at the Johannesburg World Summit on Sustainable Development (WSSD) last September. But his government officials have strenuously denied that the Government has ignored the problem and claim that China has been trying to crack down on fake producers.

And it can't happen a moment too soon. According to several recent news reports, fake anti-AIDS drugs as well as fake anti-malarials are now appearing in the African and Asian markets. Because of widespread African poverty, take up of even these low-priced drugs is low, but the trend is worrying. While good monitoring and policing in America and Europe ensure that few people will die from Chinese fakes, the rest of the world may not be so fortunate.

In 2000, The Lancet found that a third of all anti-malarial drugs on sale in Cambodia, Laos, Myanmar, Vietnam and Thailand contained no active ingredient. These countries are badly affected by the most dangerous form of malaria (plasmodium falciparum) and hence fakes kill thousands a year. According to the evidence, most of the drugs come from China.

Things are made worse by the fact that the jail sentences and fines for fake drug manufacturers are low, far lower even than those for makers of illicit narcotics. Consequently, organised crime, a secret part of Chinese life, has moved into this lucrative area. If World Health Organisation figures that 8% of the world drug market is made up of counterfeits are correct, then this market could be worth over $30 billion.

But China is acting. Premier Rongji established a Chinese State Drug Administration (SDA), which has stiffened penalties, almost as much as those for narcotics traffickers, and has closed over 1,000 small-scale factories in the past year. The Chinese government is also allowing private security firms, employed by western drug manufacturers whose patents are harmed, to investigate instances of counterfeiting. The Chinese SDA then cooperates with the private entities, but there have been few prosecutions according to Chinese media sources.

It is possible that China will have clamped down sufficiently on its fake drug industry by the time it has to comply with its WTO commitments in 2006, but it has a long way to go, and success will be hard to observe. Premier Rongji said in a speech at the WSSD that, 'the international community and national governments should adopt new policies and mechanisms to reduce clashes between protecting intellectual property rights and promoting wider application of technology so as to facilitate transfer of technology among states'. He might find that a greater respect for intellectual property rights would result in a reduction in fake drugs, and an increase in innovation and technology transfer, especially as foreign companies would likely improve their investments in China.

Roger Bate is a fellow of International Policy Network and a TCS columnist.

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