Economy

As Viagra Patent Expires, Chinese Company Creates New ED Generic

In Shenzhen
In Shenzhen
Luo Fengyao

BEIJING — After a development period of more than 10 years, and with final approval from the China Food and Drug Administration, Guangzhou Baiyunshan Pharmaceutical Co. has just launched a generic erectile dysfunction drug based on Viagra, to be sold at half the price.

At the press conference for the launch of "Jinge" (literally meaning "gold dagger"), Baiyunshan deputy director Wang Wenchu couldn't conceal his excitement when attractive young men and women appeared on the stage waving the pills at the audience. He had been waiting for this moment for 11 years.

The patent for Viagra, developed by the American company Pfizer, expired in China on May 12. Not only has it brought in over $10 billion globally for Pfizer over the past 11 years, it has also become the most iconic erectile dysfuntion drug in China.

With the country's repressive sex culture, it took a lot of effort for Viagra to gain entry to China a dozen years ago. In 1999, at Viagra's approval review meeting, numerous sexologists worried aloud that the drug would cause a rise in sexual assaults.

But doctors at Peking University found the drug effective in more than 80% of clinical trial cases and finally convinced people that it would not only promote harmonious marital relations but also bring social stability. Eventually, sale of the drug was approved in 2000.

But because of conservative attitudes, sales were slow to gain a foothold. "To promote the medicine and to help with Chinese men's health, we had to give weekly lectures for two consecutive years on television," recalls Dr. Guo Yinglu, who worked at the First People's Hospital of Peking University.

A widely cited anecdote is that Pfizer dispatched well-trained — and beautiful — women to approach potential clients in pharmacies. "I know you are normal, sir," they would say, before going on to promote the drug. The tactic not only worked well but gave confidence to shy Chinese men.

Acessible all over

But it wasn't until 2004, when China's State Food and Drug Administration allowed such drugs to be sold over the counter, that Viagra become a huge success in China. Bayer and Eli Lilly soon followed by respectively introducing Levitra and Cialis, two other drugs used to treat erectile dysfunction.

Chinese medical care services portal Menet says Viagra sales in China were around 890 million yuan ($145 million) in 2013 compared to 310 million ($50 million) for Cialis and 80 million ($13 million) for Levitra.

As the China Statistical Yearbook 2013 shows, China has 127 million men with erectile dysfunction, but only a tenth of these patients seek medical care for it. "It's a huge market with a tremendous potential," Zhang Buyong says. "With every 10% of patient growth, it will mean hundreds of million yuan of market growth."

Guangzhou Baiyunshan Pharmaceutical's research department is currently working on developing a series of over-40 drugs and health food products, all aimed at curing erectile dysfunction. Last month, the Chinese company introduced a herbal product marketed as "Tiema," or "Iron Horse," which is sold as a complementary health food. Insiders predict that the company, ranked 219th among China's top 500 enterprises, will launch several similar products in the near future to quickly seize a place in the market.

The company achieved an annual turnover of 54.5 billion ($8.9 billion) last year, which is estimated to grow to 65 billion ($10.6 billion) this year. By creating an erectile dysfunction product line, its ambition is to achieve a 100 billion yuan ($16.3 billion) turnover within the next three years. It has a strong network of hospitals and pharmacies as sales channels.

Among the company's advantages is the price of Jinge. As Wang Wenchu says, "our price for the same dose will be half of that of Viagra."

As many as 24 Chinese pharmaceutical manufacturers are applying to market generics of Viagra. Meanwhile, the patents of Levitra and Cialis will expire in 2018 and 2020, respectively. With a potential $100 billion market share, the three foreign pharmaceutical companies that have so far monopolized the market will have to gear up for a dogfight with Chinese companies.

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Geopolitics

Iran-Saudi Arabia Rivalry May Be Set To Ease, Or Get Much Worse

The Saudis may be awaiting the outcome of Iran's nuclear talks with the West, to see whether Tehran will moderate its regional policies, or lash out like never before.

Military parade in Tehran, Iran, on Oct. 3

-Analysis-

LONDON — The Iranian Foreign Ministry spokesman Saeed Khatibzadeh said earlier this month that Iranian and Saudi negotiators had so far had four rounds of "continuous" talks, though both sides had agreed to keep them private. The talks are to ease fraught relations between Iran's radical Shia regime and the Saudi kingdom, a key Western ally in the Middle East.

Iran's Foreign Minister Hossein Amirabdollahian has said that the talks were going in the right direction, while an Iranian trade official was recently hopeful these might even allow trade opportunities for Iranian businessmen in Saudi Arabia. As the broadcaster France 24 observed separately, it will take more than positive signals to heal a five-year-rift and decades of mutual suspicions.


Agence France-Presse news agency, meanwhile, has cited an unnamed French diplomat as saying that Saudi Arabia wants to end its costly discord with Tehran. The sides may already have agreed to reopen consular offices. For Saudi Arabia, the costs include its war on Iran-backed Houthis rebels fighting an UN-recognized government in next-door Yemen.

The role of the nuclear pact

Bilateral relations were severed in January 2016, after regime militiamen stormed the Saudi embassy in Tehran. Amirabdollahian was then the deputy foreign minister for Arab affairs. In 2019, he told the website Iranian Diplomacy that Saudi Arabia had taken measures vis-a-vis Iran's nuclear pact with the world powers.

It's unlikely Ali Khamenei will tolerate the Saudi kingdom's rising power in the region.

He said "the Saudis' insane conduct toward [the pact] led them to conclude that they must prevent [its implementation] in a peaceful environment ... I think the Saudis are quite deluded, and their delusion consists in thinking that Trump is an opportunity for them to place themselves on the path of conflict with the Islamic Republic while relying on Trump." He meant the administration led by the U.S. President Donald J.Trump, which was hostile to Iran's regime. This, he said, "is not how we view Saudi Arabia. I think Yemen should have been a big lesson for the Saudis."

The minister was effectively admitting the Houthis were the Islamic Republic's tool for getting back at Saudi Arabia.

Yet in the past two years, both sides have taken steps to improve relations, without firm results as yet. Nor is the situation likely to change this time.

Photo of Iranian Supreme Leader Ali Khamenei in 2020

Iranian Supreme Leader Ali Khamenei in 2020

commons.wikimedia.org

Riyadh's warming relations with Israel

Iran's former ambassador in Lebanon, Ahmad Dastmalchian, told the ILNA news agency in Tehran that Saudi Arabia is doing Israel's bidding in the region, and has "entrusted its national security, and life and death to Tel Aviv." Riyadh, he said, had been financing a good many "security and political projects in the region," or acting as a "logistical supplier."

The United States, said Dastmalchian, has "in turn tried to provide intelligence and security backing, while Israel has simply followed its own interests in all this."

Furthermore, it seems unlikely Iran's Supreme Leader Ali Khamenei will tolerate, even in this weak period of his leadership, the kingdom's rising power in the region and beyond, and especially its financial clout. He is usually disparaging when he speaks of Riyadh's princely rulers. In 2017, he compared them to "dairy cows," saying, "the idiots think that by giving money and aid, they can attract the goodwill of Islam's enemies."

Iranian regime officials are hopeful of moving toward better diplomatic ties and a reopening of embassies. Yet the balance of power between the sides began to change in Riyadh's favor years ago. For the kingdom's power has shifted from relying mostly on arms, to economic and political clout. The countries might have had peaceful relations before in considerably quieter, and more equitable, conditions than today's acute clash of interests.

If nuclear talks break down, Iran's regime may become more aggressive.

Beyond this, the Abraham Accord or reconciliation of Arab states and Israel has been possible thanks to the green light that the Saudis gave their regional partners, and it is a considerable political and ideological defeat for the Islamic Republic.

Assuming all Houthis follow Tehran's instructions — and they may not — improved ties may curb attacks on Saudi interests and aid its economy. Tehran will also benefit from no longer having to support them. Unlike Iran's regime, the Saudis are not pressed for cash or resources and could even offer the Houthis a better deal. Presently, they may consider it more convenient to keep the softer approach toward Tehran.

For if nuclear talks with the West break down, Iran's regime may become more aggressive, and as experience has shown, tensions often prompt a renewal of missile or drone attacks on the Saudis, on tankers and on foreign shipping. Riyadh must have a way of keeping the Tehran regime quiet, in a distinctly unquiet time.

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