Coronavirus Treatments/China: Strong Demand For Traditional Remedies Drives Record Profits

Covid-19 treatments

Covid-19 treatments

Drug efficacy is not always the driving force behind healthcare stock rallies. Over the past year, the value of some Chinese makers of traditional remedies has soared.

One of China’s most popular Covid-19 treatments is a herbal product made by drug company Shijiazhuang Yiling Pharmaceutical. Endorsed by Beijing and Hong Kong’s leader Carrie Lam, the remedy generated sales of almost $700mn in 2020. A police crackdown on counterfeit versions was evidence of the huge demand for the capsules.

Yiling Pharmaceutical’s net profit more than doubled in 2020. It has continued to post quarterly profit growth of more than a third last year.

Not all countries share the enthusiasm for the treatment, called Lianhua Qingwen. The US Food and Drug Administration has been among those regulators that have warned against its use as a Covid treatment. Yet the drug has obtained a listing licence in almost 20 countries, including Canada and Russia.

The small number of large-scale clinical trials of traditional medicines has been a longstanding barrier to their international take-up. But Beijing, which has started promoting traditional Chinese medicine as a global export, is helping to grow the $60bn industry. That provides local traditional medicine groups with their best opportunity yet to achieve global reach.

In Hong Kong, the government has included Lianhua Qingwen pills as part of the essential Covid supplies it provides for nursing homes. It plans to start shipping herbal remedies to every household.

In the treatment’s home market, the lack of competition helps. China has yet to approve most globally accepted Covid vaccines and treatments. Pfizer’s antiviral pill Paxlovid was the first foreign Covid medicine to be conditionally approved in China, and that only came in February.

New cases in China are at the highest level in two years. The slow rate of approval of western medicines means traditional medicine sales should continue to grow regardless of efficacy.


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