[Ip-health] Wall Street Journal: Global Health, China's Pride On Line in Malaria Clash

[Thiru Balasubramaniam]

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INFECTIOUS ISSUE
Global Health, China's Pride
On Line in Malaria Clash
As Bugs Get Resistant,
Pill Maker Squares Off
Against U.N. Agency
By NICHOLAS ZAMISKA in Kunming, China, and BETSY MCKAY in Geneva
March 6, 2007; Page A1

Kunming Pharmaceutical Corp. of China makes a potent drug to fight
malaria, a disease that kills more than a million people a year.
Business is brisk. Yet the World Health Organization calls the sale of
the drug a major threat to global health. It is demanding that Kunming
and makers of similar pills desist.

It's a dispute that touches on money, national pride and the dilemmas
of treating infectious diseases. The WHO says resistance is emerging to
the drug, based on the natural substance artemisinin, and in most cases
it should only be used in combination with other antimalarial drugs.
The leading combination drug is made by Novartis AG of Switzerland.

Kunming and other Chinese drug makers say the WHO is overestimating the
risk of resistance -- and underestimating the urgent need for
treatments. "This medicine is in huge demand, especially from African
countries," says Yu Zelin, Kunming's general director of international
trade. The Chinese companies also resent being boxed out of part of a
market for a drug Chinese scientists invented.

Arata Kochi, a Japanese public-health veteran who heads the WHO's
global malaria program, says his concern is the millions of people,
mostly babies and toddlers in sub-Saharan Africa, who would die if
artemisinin-based drugs lost their magic touch. "If we lose
artemisinin, we are dead, basically," says Dr. Kochi.

Malaria has plagued humans for thousands of years. It is caused by a
single-celled parasite that certain mosquitoes inject into the human
bloodstream when they bite. Infected red blood cells can clog the
circulatory system, leading to fatal complications such as severe
anemia, kidney failure and shock -- particularly in children and
pregnant women. The parasite has developed at least partial resistance
to most of the drugs used to kill it.

In the late 1960s, as troops from North Vietnam fighting against the
U.S. were beset by jungle malaria, Ho Chi Minh turned to China, which
put its military scientists to work experimenting with ancient folk
remedies. They found one promising remedy that had been recorded in a
medicine book written on silk and buried in a tomb of the West Han
Dynasty, which began around 200 B.C. It came from the leaves of sweet
wormwood, a bushy green plant with fragrant leaves and small flowers
known to scientists as Artemisia annua L.

After two decades of work, during which Chinese scientists isolated
artemisinin as the active compound, Kunming introduced its drug in the
late 1980s. While artemisinin-based therapies are generally more
expensive than older treatments, because they can't be fully
synthesized in the lab, they can bring quicker relief, usually within a
few days.

Kunming, a Shanghai Stock Exchange-traded company, started churning out
millions of doses and selling them in more than 30 countries -- mostly
in Africa and parts of Asia, where malaria remains endemic. Instead of
working through public-health authorities such as the WHO, which make
up a big market for malaria drugs, Kunming often used private
distributors. Many patients in Africa buy their drugs from shops or
local pharmacies without visiting a doctor. Kunming says it's the
largest producer of artemisinin-based drugs in China.

In the early 1990s, Chinese scientists developed a combination therapy
that put together an artemisinin-based drug called artemether and
lumefantrine, an older antimalarial drug. Ciba-Geigy, a Swiss company
that later became Novartis, bought the rights to sell the combination
pill outside China in 1994. Ciba-Geigy paid "a few" million dollars and
agreed to pay a 4% royalty on annual sales, according to one of the
Chinese negotiators.

In 2002, the WHO approved the Novartis pill, called Coartem, for
purchase by United Nations agencies that dispense medicine in
developing countries. Coartem remains the only fixed-dose combination
therapy to receive this designation. Novartis says it sells the drug
for no profit to U.N. agencies and others that dispense it in nations
where malaria is endemic.

Around the same time, signs began to emerge that the malaria parasite
could become resistant to artemisinin-based drugs. The WHO says
artemisinin drugs failed to cure malaria in two children in Thailand,
while lab tests in China suggested that the effectiveness of
artesunate, an artemisinin-based drug, fell between 1988 and 1999.

Although these and other studies seemed to be scant evidence, the WHO
was alarmed. Once resistance appears, it can spread rapidly. The WHO's
Dr. Kochi notes that because artemisinin works quickly, many people cut
short the recommended seven-day course of treatment. That leaves
parasites alive and promotes resistance. "The only way to beat malaria
is to be ahead of the parasite," he says. It will take at least 10
years to bring a new generation of drugs to the market, he adds.

In 2001, the WHO began promoting combination therapies. Most of the
parasites that survived artemisinin thanks to a genetic quirk would be
wiped out by the other medicine, the WHO figured.

The result was growing demand for Coartem. Chinese makers of
artemisinin-based drugs say that when the demand caused a world-wide
shortage of artemisinin a few years ago, they came under increasing
pressure to act as raw-materials suppliers to Novartis, rather than
sell their own drugs. "Some people think we sold our country to
Novartis," says Liu Tianwei, who works for a unit of Citic Group, a
state-owned investment company involved in the licensing deal.

Novartis says the WHO's pressure against selling artemisinin-based
drugs alone was a "scientifically sound decision." It notes that few
global companies were interested in artemisinin in the early 1990s and
says it transferred significant drug-making technology to Chinese
companies as they cooperated in making Coartem.

Kunming doesn't deny the value of combination therapy. In fact, it has
its own combination pill, called Arco, which it is just beginning to
sell in Africa. But it says it should be permitted to roll out Arco on
its own schedule and shouldn't have to yank the "monotherapy" pill
containing only one drug while it still enjoys a good market.

"This is not fair to China," says Ms. Yu in an interview. "We have
developed the drugs ourselves. We have made so much effort. We will
sell the monotherapies."

In 2004 Kunming Pharmaceutical sold around $5 million of monotherapy,
according to Ms. Yu. The company declined to give more recent figures
but says it sold several million doses of the drug last year. Kunming's
total revenue in 2005 was $156 million.

"WHO wants us to stop, but the demand in the real commercial market is
increasing," says Ms. Yu. She also says that "worries about
resistance...are not fully based on solid science."

The WHO's effort took on a more urgent tone in October 2005 when Dr.
Kochi took over the malaria program. The blunt-spoken 58-year-old had
faced a similar problem maintaining the viability of drugs amid rising
resistance as head of the WHO's tuberculosis-control program in the
1990s.

Dr. Kochi came up with a quick diagnosis of his agency's problem:
passivity. It was putting out quiet requests to limit use of
monotherapy drugs but "there was no reaction," he says.

In early January 2006, the WHO invited the monotherapy manufacturers to
a Jan. 18 briefing in Washington, D.C. There, Dr. Kochi unexpectedly
demanded that manufacturers halt sales and marketing of their
monotherapy artemisinin-based drugs immediately. The next day he gave
the media a list of the companies he maintained had flouted WHO
warnings.

Company executives were taken aback. It was unlike the WHO to point the
finger publicly at a company or government. And it wasn't clear that it
would work. Most artemisinin monotherapies are sold in the private
sector, over which the WHO has little sway.

In April, the WHO summoned the manufacturers again, this time to its
Geneva headquarters. With several Chinese companies present, Dr. Kochi
rolled out a bigger threat, according to several attendees: U.N.
agencies would boycott all drugs from any company that failed to stop
making artemisinin monotherapies. By the end of the meeting, many
manufacturers fell into line. Overall, the WHO says 17 companies have
agreed to comply, including European, Indian and some Chinese
companies.

But other Chinese pharmaceutical companies haven't. They tend to share
Kunming's perspective: Chinese scientists, using indigenous knowledge,
developed a world-beating drug -- only to see the nation's companies
blocked from getting a piece of the action.

"Just put the facts on the table," says Lu Chunming, the president of
Chongqing Holley Pharm Co. Referring to artemisinin combination
therapies, he adds: "The only [WHO-designated] ACT provider is
Novartis. And now you only use ACTs. What do you think?"

The Holley Group of Hangzhou is the largest shareholder in both Mr.
Lu's company and Kunming Pharmaceutical. David Jiang, a marketing
manager for a unit of Chongqing Holley Pharm that makes malaria drugs,
said last week that the company plans to stop selling monotherapy once
its stock runs out, perhaps by the end of the year.

One Chinese company that says it has mostly complied with the WHO
demand is Guilin Pharmaceutical Corp. Yan Xiaohua, chairman of the
board, says his company is only selling monotherapy for use by pregnant
women and children, who he says shouldn't be exposed to the greater
toxicity of the combination drug. Still, he questions the WHO's hard
line against monotherapies, saying not all of them present the same
risk. "If you have three men, and one of them is a bad man, you can't
say all the men are bad," he says.

On Oct. 31, Dr. Kochi and other WHO staff met in Beijing with Chinese
government officials and representatives of Kunming and three other
manufacturers. He warned them that the WHO was pushing governments of
developing nations to ban artemisinin monotherapies. Kunming made no
promises, although Ms. Yu says it will eventually stop selling its
monotherapy pill once sales of its combination pill, Arco, increase.

Arco is the subject of a dispute between Kunming and the WHO. Dr. Kochi
and other WHO officials call it a promising medicine and have
repeatedly pressed Kunming to submit laboratory and clinical data to
the agency. The WHO could then "prequalify" Arco, making it eligible
for purchase by U.N. agencies. At the Beijing meeting, Dr. Kochi said
the WHO wants to help Chinese companies win this designation.

Dr. Kochi says Kunming executives are hurting themselves "by selling
monotherapies when they have a combination drug with great potential in
the pipeline."

Kunming says it might waste years trying to persuade the WHO to sign
off on Arco. It is content to sell the drug the same way it sells
artemisinin monotherapy -- through commercial channels. Already it has
registered it for sale in seven African countries, though it declines
to disclose revenue so far.

"Why should we have to submit?" asks Ms. Yu. Arco has been doing "so
well," she adds. "Why bother taking so many more years to get it out
the door through the WHO way?"

Recently, Dr. Kochi has gained confidence that market forces are on his
side. A growing number of companies are turning out combination
therapies. Last week a nonprofit organization and Sanofi-Aventis SA of
France said they will soon start distributing across Africa an
affordable combination pill designed for children.

The WHO's new director-general, Margaret Chan, who is from Hong Kong,
has made attacking malaria a top priority, and the agency's governing
body, the World Health Assembly, will vote in May on a resolution to
press ahead with the oral artemisinin monotherapy ban.

Dr. Kochi figures the Chinese companies will shortly find the market
for monotherapy drying up, although it remains to be seen whether
they'll let the WHO examine their combination drugs. "They have their
own pride, and I can very much understand their frustration," he says.
"We have to work with them and explain the rules of the game."

Kunming is still selling its monotherapy. It recently filled orders to
Uganda and Tanzania, according to Ms. Yu. "We send it every month," she
said.

--Juying Qin in Hong Kong contributed to this article.

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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@keionline.org