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Chinese Drug Company Wins Approval to Make Generic Version of Viagra 2014-09-11
By Becky Davis

A Chinese pharmaceutical company has received the green light from China’s State Food and Drug Administration to become the country’s first official producer of a homegrown version of Viagra, Pfizer’s famous erectile dysfunction drug.

Pfizer’s patent on Viagra expired in China in May, following patent expirations in several European countries and elsewhere that are expected to undercut profits for the American pharmaceutical giant as cheaper alternatives are rolled out.

Since May, Chinese companies have been vying with one another to emerge as the dominant player in the new market for generic versions of the pill. In the early stages of the competition, Guangzhou Baiyunshan Pharmaceutical appears to have emerged triumphant.

After years of behind-the-scenes preparation, the company last week received the state production license that will allow it to start churning out sildenafil citrate, the active ingredient in Viagra. Guangzhou Baiyunshan, a subsidiary of the larger Guangzhou Pharmaceutical Holdings Limited, began developing its product in the 1990s, but had to hold off in 2003 when it was unable to get a production license because of the Pfizer patent, Nanfang Daily reported.

Chinese companies have spent the better part of two decades lying in wait for Pfizer’s patent to expire because profits in China’s erectile dysfunction drug sector are enormous and only expected to grow.

The “Investigation Report on China Sildenafil Market, 2009-2018” put out by China Market Research Reports estimates that more than 50 million men in China suffer from sexual dysfunction. The demand for a remedy is expected to rise along with the aging of China’s population. The United Nations Department of Economic and Social Affairs projects that by 2050 China will be home to 437 million people over the age of 60.

According to a Citigroup study cited by CNBC, the current Chinese erectile dysfunction drug market is worth 1.7 billion renminbi a year. This could reach as much as 5 billion renminbi, or $810 million, by 2018, it said, and generic versions of Viagra could take more than half the market. Whereas Viagra is sold in China at more than 90 renminbi, or almost $15, a pill, Baiyunshan plans to market its own version for between 30 to 50 renminbi, giving it a serious competitive advantage.

Viagra was introduced to China in 1998, but Pfizer faced a range of challenges to its patent and other litigation until 2007. One of the greatest obstacles the company faced in marketing the drug to Chinese consumers was that it did not own the trademark on its most commonly used Chinese name, “Wei Ge (伟哥),” which sounds somewhat like the English while literally translating to “Great Older Brother,” or “Big Guy.” When Pfizer tried to trademark the colloquial Chinese term for its product, it discovered that that name was already owned by a local pharmaceutical company in Guangzhou and so was left with the lackluster transliteration “Wan Ai Ke (万艾可),” which has no particular Chinese meaning.

Baiyunshan clearly seeks to mimic the mainland success of “Wei Ge” by naming its product “Jin Ge (金戈),” which means “Golden Dagger-Ax.” This serves up a witty reference to Pfizer’s “Big Guy” in terms of pronunciation while conjuring the image of the phallic, L-shaped blade favored by warriors in the Shang through Han dynasties.

This clear mimicry in both product and marketing is an indication, however, of the Chinese pharmaceutical industry’s weakness, according to an article in China Youth Daily. It quoted Long Yongtu, who was the lead negotiator on China’s entry into the World Trade Organization, as saying in 2006 that 90 percent of the 5,000 or so large and small pharmaceutical companies in China produced only generics, and their combined annual sales revenue totaled less than $40 billion, less than that of a single company of Pfizer’s size. In 2013, Pfizer took in $51.3 billion globally.

Nearly a decade later, Chinese pharmaceutical companies are still more eager to imitate than innovate, shying away from the huge investments and risks of developing new drugs in favor of the certain returns from imitating tried-and-true blockbuster drugs or repackaging existing formulas. According to China Youth Daily, Chinese pharmaceuticals on average still invest less than 1 percent of their budget in research and development, despite recent government incentives.

Generics are nonetheless better alternatives for penny-pinching consumers than the knock-offs that abound in China, as they are subject to governmental regulation and contain the same active ingredients and dosage as the original drug. Time will tell if those who prefer traditional Chinese medicine virility treatments such as pangolin scales or tiger penis will be swayed by the new “Golden Dagger-Ax” on the market.

Patent Pending:   60/481641
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