Chinese drug firms ally against Pfizer
By Jia Hepeng (China Business Weekly)
Updated: 2004-10-18 15:11

The producers of "Chinese Viagra" have established a joint venture to fend off competition from Pfizer, the world's largest pharmaceutical firm and the original producer of the world's leading anti-impotence drug.

Zhang Yucai, chairman of Tonghua Hongtaomao Pharmaceutical Co Ltd, based in Northeast China's Jilin Province, said 17 domestic producers of "Chinese Viagra," or drugs with sildenafil citrate as their major compound, have formed a joint venture.

The joint venture has established an office in Beijing and the capital from the shareholders has been invested into the new company, Zhang said.

"The certificates for our new drug have been authorized by the State Food and Drug Administration (SFDA), and we are waiting for the production licence," Zhang said last Thursday.

He believed the production licence would be made available soon, maybe within this month.

In order to comply with China's Medicine Regulation Law, a new medicine must have both a new drug certificate and a production licence before it can be produced.

Seventeen Chinese drugmakers obtained the certificates for their drugs produced from sildenafil citrate after the State Intellectual Property Office (SIPO) ruled in early July that Pfizer's patent for sildenafil citrate was invalid in China.

The ruling was made after 12 Chinese generic sildenafil citrate producers sued Pfizer at the SIPO in 2001, a lawsuit launched and organized by Zhang.

In late September, Pfizer said it had appealed to a Beijing court to overturn SIPO's ruling. Comments from Pfizer on the joint venture of "Chinese Viagra" are unavailable.

According to Zhang, establishing a joint venture between domestic "Viagra" producers means that they will jointly promote the drug on the market while avoiding a price war.

"We have had so many ocassions where, although Chinese producers have triumphed over foreigners, they have hurt themselves in the competition," Zhang said.

The chairman also revealed that the 17 shareholders in the joint venture will have similar stakes in the company.

It is still unknown whether the joint venture will produce "Chinese Viagra" for its shareholders, or simply sell the drug for them. The latter possibility is more likely because China's Medicine Regulation Law stipulates that drugmakers obtaining production licences must produce it within two years, otherwise, the licence will be revoked.

Despite the alliance, the prospects remain unclear for "Chinese Viagra."

Wang Fei, a lawyer of Beijing Huake Intellectual Property Firm, said that the SFDA may delay the authorization of the production licence for "Chinese Viagra" as the legal dispute over its patent has not been resolved.

Sun Mingjie, chairman of Guangzhou Viaman Pharmaceutical Co Ltd, said that the time between obtaining a new drug certificate and a production licence may be more than one year.

Even if the production licence is authorized in the near future, Pfizer's challenge remains.

Viaman produced another anti-impotence drug registered as "Weige," the popular literal name for Viagra before it entered China in 1998. Last year, Pfizer lost its fight to get the brand name "Weige" from Viaman at the State Bureau of Trade Marks.

Weige's major ingredient is phentolamine mesylate.

Sun has threatened to sue the "Chinese Viagra" joint venture because it had informally used the name "Weige alliance." Although informal, patients' misunderstanding has made the sales of Sun's Weige decline recently.

Internal competition also seems inevitable.

An official with Guangzhou Baiyunshan Pharmaceutical Co Ltd, a shareholder in "Chinese Viagra" joint venture, seemed less enthusiastic than Zhang about the so-called "Weige alliance."

"We have not considered any detailed plan for the joint venture because the production licence has not been authorized," the official said.

Pfizer's rival is apparent. Yet besides the competition from Pfizer, whether Chinese patients can accept the anti-impotence medicine remains a big question, said Hou Dakun, president of Beijing KevinKing Management Consulting Co Ltd.

Anti-impotence medicines -- including Viagra and Weige -- are prescription drugs in China, which means patients have to get a doctor's permission to buy them. But Chinese impotent patients are often too shy to go to a doctor, Hou said.

That has led China to become one of the poorest markets for Pfizer's Viagra. It will be difficult for "Chinese Viagra" to change the situation over a short period of time, Hou said.

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