Chapter 2017: The Dark Side of the Pharmaceutical Industry

The pharmaceutical industry is a deep, murky pool.

Especially drug research and development, which is an even more complex process.

Zhao Fusheng knew this well.

In his previous life, when he watched *Dying to Survive*, Zhao Fusheng, like everyone else, cursed the company that produced Gleevec.

Unscrupulous, profit-driven, blinded by greed!

Every possible epithet, as depicted in the film, could be applied to those heartless businessmen without exaggeration.

But as time went on, Zhao Fusheng gradually realized he had been too simplistic.

Take Gleevec, for example. The full name of CML is chronic myeloid leukemia.

Simply put, it is caused by a chromosomal translocation that continuously produces an enzyme, which stimulates the infinite replication of white blood cells, leading to cancer.

The so-called targeted drug precisely inhibits the activity of this enzyme while minimizing other damage to the body.

For most families, after contracting this disease, the most common treatment is a drug called hydroxyurea, costing about two hundred yuan a month. It works by killing abnormally proliferating white blood cells, but it treats the symptoms, not the root cause.

After taking it for a while, patients develop resistance, and they start on interferon, one injection per week. The principle is similar to hydroxyurea, but the effect is stronger.

Zhao Fusheng later looked up information and found that even after Gleevec was included in medical insurance a few years later, it still cost ten thousand yuan per box.

Although the manufacturer partnered with a charitable foundation to offer a “buy three, get nine” program—meaning you spend over seventy thousand yuan for three months’ worth of medication and get enough for a year—and after factoring in insurance reimbursement, the annual cost was only a little over twenty thousand yuan.

But the problem was that the conditions for applying for the “buy three, get nine” program were very strict: the family’s annual income had to be less than 150,000 yuan, or they had to have a subsistence allowance, and they had to obtain a diagnosis certificate from a doctor designated by the pharmaceutical company.

It sounded like they were receiving relief grain.

Zhao Fusheng later specifically looked up the information: the drug Gleevec was developed starting in 1988, took thirteen years, and finally launched in 2001, with research and development costs as high as billions of US dollars.

And that was just for one drug.

During the same period, other drug projects developed by Novartis ultimately failed.

Those costs were also factored into the cost of Gleevec.

"Tell me, why is medicine for treating illness so expensive?"

Mom Zhao's words made Zhao Fusheng pause.

After thinking for a moment, Zhao Fusheng said to his mother, "This question is very complicated, but I think we can't explain it clearly."

"You, child."

Mom Zhao shot her son a glare: "If you ask me, instead of letting those foreigners make this money, we should invest in developing new drugs ourselves. Then we can set the price a bit lower—you can make money, and ordinary people can benefit."

In her simple values, she truly couldn't understand why no one would do something that could both make money and benefit the people.

Zhao Fusheng gave a bitter smile and shook his head. He couldn't very well tell his mother that domestic technology wasn't up to par, and that to develop new drugs, they would need to set up a research lab abroad.

And domestically, imported drugs are subject to tariffs ranging from three to six percent, plus nearly one-fifth value-added tax, plus a fifteen percent hospital markup, and a twenty percent distribution fee.

These things do not exist in Europe and America.

Of course, that doesn't mean that Americans can afford drugs that Chinese people cannot.

American healthcare relies on insurance—you pay for a certain level of insurance and enjoy corresponding benefits.

But the higher the expenses you claim, the more your insurance premiums will rise the following year.

To be honest, the developed countries in Europe are more comfortable because their medicines are all covered by medical insurance and reimbursed.

But the problem is, they have small populations!

"Mom, don't worry about it. It's not that easy."

Zhao Fusheng shook his head at his mother.

The pharmaceutical R&D industry is definitely not as easy as it looks. It's not something you can solve by just finding a lab and investing a few billion or even tens of billions of dollars.

For example, if an imported drug wants to enter China, no matter what experiments have been done abroad, it has to go through the entire process again domestically. First, submit an application to the China Food and Drug Administration, which takes one to two years for approval. Then find a hospital to cooperate with and recruit patients for clinical trials, which takes at least half a year, often one to two years or more. The results then need to be reviewed to ensure the process was correct and no data was falsified. All together, it takes several years.

This is different from abroad.

For instance, in South Korea, the government conducts a technical evaluation of a drug, clarifying its efficacy, side effects, and other indicators. Then the drug regulatory and medical insurance departments negotiate the price with the pharmaceutical company.

In China, for a long time, there was no department responsible for price negotiations with pharmaceutical companies.

So how is the price of an imported drug determined?

First, the pharmaceutical company reports an ex-factory price. Once it arrives in China, tariffs, value-added tax, and the profits of various distributors are added, resulting in the final selling price.

In fact, in response to high drug prices in China, some pharmaceutical companies have introduced preferential policies. For example, Gleevec, a couple of years ago, Novartis launched a "buy six months, get lifetime supply" offer, but for Chinese patients, the cost of six months at over a hundred thousand yuan was still very high, and the policy was canceled after just over half a year.

In Zhao Fusheng's view, the key to solving these problems is not a "drug god" or lowering drug prices, but incorporating such drugs into the formal medical insurance system.

This is not a problem in Europe and many Asian countries with universal healthcare systems. They have a systematic evaluation and accounting system that examines a drug's therapeutic effects and side effects, whether it is more beneficial to patients than existing treatments, and calculates the burden it will impose on medical insurance expenditures from a macro perspective.

Then they decide whether a drug can be covered by insurance and at what price. The entire process and standards are open and transparent. But in China, to this day, no unified medical insurance review standard has been publicly disclosed.

Under these circumstances, Zhao Fusheng would never get involved in the pharmaceutical business, even if it killed him.

Because he knew very well that the cake was too big and the water too murky, to the point where it could ruin him.

Zhao Fusheng sympathized with the patients, but that didn't mean he would touch the interests of certain interest groups for their sake.

It was like those domestic pharmaceutical companies and drug sales enterprises, who knew the truth about Gleevec but let Novartis be vilified after the broadcast of "Drug God".

At that time, the doctor-patient conflict was severe, and the public had long complained about high drug prices. The appearance of the movie "Drug God" was like a fuse, quickly igniting that passion.

But after the passion, few people thought about the truth of the matter.

The character played by Xu Zheng was a good person, but to be precise, his actions were indeed wrong.

Because while the other party's patent was still valid, smuggling drugs from India and reselling them, even at a low price, was wrong.

No matter how you spin it, the mentality of "I'm weak, so I'm right; I'm poor, so I'm invincible" is not correct.

Just because you can't afford medical treatment doesn't mean you can disregard the law.

Does that mean every young child can use ignorance of youth to excuse everything, including murder?

The logic is the same.

It's just that some people selectively ignore it.

It's like those hypocritical double-standard saints.

They only see what they want to see, and they don't care about the truth of the facts.

"Mom, go in and keep the baby company. I have other things to do."

Zhao Fusheng thought for a moment and said to his mother.

Zhao's mother was a bit puzzled but nodded and left.

Zhao Fusheng looked at the protesters downstairs in the hospital and showed a strange expression.