1. Research and Development of Chinese Medicine in Hong Kong
  2. Overview of R&D Portfolio
  3. CEPA Brings New Opportunities to the Development of Chinese Medicine Industry
  4. Hong Kong’s Advantageous Position in Research and Development of Chinese Medicines
 
 
 
 
 
 

Dear Readers,

Welcome to the second issue of our Newsletter.

In this issue, we will share with you our experience gained over the past couple of years and will introduce our R&D Portfolio to you.

We have invited Prof Liu Liang, Dean of School of Chinese Medicine (CM), Hong Kong Baptist University, to share his experience in the development of medicines with us. Prof Liu is one of our research collaborators in the development of medicines for rheumatoid arthritis.

As both the Mainland and HKSAR Governments are committed to fostering closer cooperation in CM development under the Closer Economic Partnership Agreement (“CEPA”), we have invited Ms Pansy Yau of the Hong Kong Trade Development Council to introduce CEPA’s latest developments in the area of CM.

Thank you for your comments on the last issue and I hope that you enjoy reading this new sletter. We welcome your views and comments.

Edmund Lee
Executive Director & Editor

 

 
 
Research and Development of Chinese Medicine in Hong Kong
 
 

Chinese medicine (CM), with its thousands of years of cultural heritage, presents us with unmatched opportunities for research, as well as product and business development in the health food and pharmaceutical industries.

The majority of the Hong Kong population is Chinese and the local CM industry also has a long history of business practices. Given our unique geographical location and close relationship with the Mainland, we have been able to leverage the Mainland’s abundant CM resources and related experience in CM research and application. The number of CM research projects in collaboration between Mainland and Hong Kong is on the rise and increasingly local enterprises and investors have shown their business interest in this area.

Over the past few years, the HKSAR Government has funded numerous CM-related research and infrastructure projects through the Innovation and Technology Fund (ITF) and the Research Grant Council (RGC) funding (including the Areas of Excellence programme), amounting to over HK$150 million. Such funding has enabled universities to fully equip their R&D facilities and build research capabilities in pre-clinical and clinical research, CM processing, as well as the characterisation and quality control of CM.

As regards international collaboration, the National Center for Complementary and Alternative Medicine (NCCAM) in the US intents to set up International Centers for Research on Complementary and Alternative Medicine to undertake research on the efficacy of traditional medicine originating from different cultures. The Chinese University of Hong Kong is one of the Centres’ overseas partners to receive its first phase of funding for collaborative projects.

Hong Kong Jockey Club Institute of Chinese Medicine (HKJCICM)

HKJCICM is set up by the HKSAR Government as the local focal point for action and coordination to steer on Chinese medicine development. It was formed as a subsidiary of the Applied Science and Technology Research Institute (ASTRI). Thanks to the support of ASTRI – a major government-funded technology infrastructure in Hong Kong – we have shared resources on a host of business and administrative support functions. This arrangement allows us to focus on strategic planning, management of projects, information and intellectual properties, and business development. The Hong Kong Jockey Club (HKJC) Charities Trust has pledged HK$500 million (or about US$64 million) to support research and development projects and specific activities.

Serving as a strategic platform, we support value-added development of CM through strengthening its R&D, quality control and commerciali sation of research outputs. Our work therefore contributes towards raising the quality of CM products and enhancing the science and evidence-base, quality control and intellectual property of CM. According to the on-going policy initiatives of the Chief Executive’s Policy Addresses 2003 and 2004, the HKSAR Government is committed to further the development of HKJCICM as a centre of excellence in pioneering science and evidence-based CM. Since its establishment, we have laid a good foundation for CM development in Hong Kong .

With the support from our advisors, our project management and research teams have acquired invaluable and first-hand experience in areas relating to e.g. development of quality control methodologies and pharmacological research on CM. After stringent appraisal of projects, our Portfolio now consists of nine R&D projects with local universities and Mainland research establishments. Six of those projects are related to development of medicine, two for quality control and one for information exchange. Through R&D project management and implementation, we have gained better understanding of the Hong Kong and Mainland regulations on Chinese medicines.

On the other hand, we have set up a Chinese Medicine Laboratory and associated research network. The purpose of which is to strengthen CM pharmacognosy and phytochemistry research of our funded projects and to support the industry. The Laboratory undertakes and co-ordinates the collection and authentication of CM herbs, research into the quality of CM and preparation of good quality extracts and samples for research, including the identification and purification of active principles and structural analysis. Considering that all CM R&D projects involve quality control and extract preparation, the Laboratory, staffed by experienced scientists, will help strengthen the CM research capabilities and the quality of our funded research. We have developed good partnerships with local universities and Mainland institutes. Through our expanding research network and the adoption of rigorous research methodologies and quality assurance practices, we aim to support the industry to develop high quality and competitive CM products and to meet local, Mainland and overseas regulatory requirements.

Furthermore, we have identified endocrinology and neuroscience as key CM research areas for focused development. These foci reflect HKJC’s commitment in elderly care and address some issues relating to the aging population. By adopting the platform concept, we focus our research efforts on areas with unmet medical needs. Our work aligns with the HKSAR government’s policy of integrating CM into the existing medical system and allows us to leverage on the research capabilities and overall technology infrastructure in Hong Kong, and the CM market potential. By impinging on the holistic approach of CM in modulating body functions, we aim to investigate CM for preventing and treating complex conditions like metabolic syndrome and other CNS-related illnesses. Besides, we have developed a web-based trilingual platform to disseminate the latest research, regulatory and industry-relevant information. Our Newsletters also cover key CM developments within and outside Hong Kong and topics of relevance for industry development.

Under the Closer Economic Partnership Arrangement (“CEPA”) agreement signed between the Mainland and HKSAR Governments, we will continue to work with the Governments in promoting and strengthening Mainland-Hong Kong and international collaborations in CM. The two sides have also signed an agreement recently to form a joint committee to further strengthen exchange and co-operation in a variety of science and technology areas, including CM. With the support from the HKSAR Government, we will foster closer linkages with the Ministry of Science and Technology, the State Administration for Traditional Chinese Medicine and the State Food and Drug Administration.

Being a learning organization, we will continue to enhance our corporate competencies and effectiveness in the coordination and use of resources and public funds so as to contribute towards realizing the Chief Executive’s vision to position Hong Kong as a world centre for the development of health food and pharmaceuticals based on Chinese medicine.

 

Hong Kong Jockey Club Institute of Chinese Medicine Limited

May 2004

 

Overview of R&D Portfolio
 

 

CEPA Brings New Opportunities to the Development of Chinese Medicine Industry (Courtesy Translation by HKJCICM)
 

Since the launch of the Closer Economic Partnership Arrangement (“CEPA”) four months ago, response from local Chinese medicine industry has been keen and rapid evidenced by the number of Certificate of Origin (CEPA) issuedas at the end of March.Amongst the 536 Certificates of Hong Kong Origin (CEPA) issued, 149 are of Chinese medicine (CM) and medical products.

Well-known for their high-quality products, Hong Kong enterprises shall be able to tap the vast potential of the Mainland CM market. Indeed, the CM and medical products imported from Hong Kong to the Mainland in 2003 has been increased by 42% to RMB 750 million, demonstrating the definite market share and competitive edge of Chinese medicaments made in Hong Kong.

Sales Amount of Chinese Herbs and Medicaments in 2002

 

RMB (Billion)
Increase

Wholesale

277.8

20.7%

Retail

210.5

7.9%

Source from: 2003 Statistics Report of the PRC

 

Amount of Chinese Medicine Imported in 2003

 

RMB (Billion)

Increase

Overall

54.5

18.3%

Imported from HK

7.5

42.1%

Source from: World Trade Atlas

 

After the implementation of CEPA, all CM and medical products of Hong Kong origin exported to the Mainland will enjoy zero-tariff treatment. A considerable amount will be saved if goods are imported in large quantities, although the Mainland’s existing import tariff rate imposed on CM is low, only 3-4%. Quoting the first local pharmaceutical company awarded the Certificate of Hong Kong Origin (CEPA), the tariff-free access for its loquat paste to China leads to a cost reduction of HK$2-3 million each year, which can otherwise be used on advertisement and manufacturing facilities.

 

Hong Kong Chinese Medical Products and Respective Origin Criteria
for Zero-Tariff under CEPA

Mainland Tariff Codes

Product Description

Origin Criteria

30049051

Medicated liquors or wines

The principal manufacture processes are: (a) dissolving and mixing according to proportion, ratio or scale to form different forms of pharmaceutical products

30049052

Pien Tzu Huang

30049053

Bai Yao

30049054

Essential balm

Change in the Four-digit Tariff Heading

30049059

Other medicaments of Chinese type

The principal manufacture processes are: (a) dissolving and mixing according to proportion, ratio or scale to form different forms of pharmaceutical products; or
(b) cooking, mixing and grinding.

30049090

Other medicaments put up in measured doses

Apart from the zero tariffs on trade under CEPA, China, in view of its WTO commitment, further liberalises and offers more favourable terms to foreign investors of various business including wholesaling and retailing. This will certainly benefit Hong Kong enterprises from expanding their market share of CM products in China. In accordance with the "Administrative Measures for Commercial Enterprises with Foreign Investment" recently announced by the Ministry of Commerce and to take effect on 1 June 2004, foreign enterprises (including Hong Kong companies) or individuals will be allowed to establish wholly-owned commercial enterprises providing commission agents’ services or engaging in wholesale, retail and a few other authorized trade businesses, and to enjoy import-export right over commodity goods.

Under the new measure, foreign enterprises will be granted the same right to set up wholly owned wholesale or retail ventures as Mainland Chinese citizens. There will be no minimum sales and asset requirements for them and that the registered capital required will be lowered to RMB 500,000 for wholesale businesses and RMB 300,000 for the retail. Besides, foreign traders can engage in the sale and distribution business of pharmaceutical products by end of 2004.

In additions, CEPA brings to Hong Kong residents the opportunity to set feet into Mainland’s CM industry. With regard to the provisions under CEPA on the opening up of the Mainland’s CM services, a “Medical (CM) Practitioner’s Qualification Certificate” of the PRC will be issued to Hong Kong permanent residents who have (i) acquired a medical degree from the Chinese University of Hong Kong or the Hong Kong Baptist University and (ii), have completed a one year’s internship in a third-level CM hospital in the Mainland or have been practising in Hong Kong for more than one year, on the condition that they have sat and passed the Mainland’s qualification examination.

The qualification certificate can also be obtained if those Hong Kong permanent residents who are in possession of a CM higher degree from a full-time tertiary institution approved by the Education Administration Department of the Mainland State Council have sat and passed the Mainland’s qualification examination after they have become legally eligible to practise in Hong Kong for over one year through the Chinese medicine qualification examination or, after they have completed one year of internship in the Mainland and passed an assessment and in accordance with the relevant requirements.

Lastly comes to the cooperation in traditional CM and medical products sector under CEPA. It is an important area, probably one with the deepest impact, for the development of Hong Kong’s CM industry. Areas initially agreed between the two sides to strengthen cooperation are as follows :

  • Communicate on the formulation of their respective regulations on and management of traditional CM and medical products with a view to achieving information sharing.
  • Enhance cooperation in research on traditional CM and medical products.
  • Strengthen communication and coordination in registration management of traditional CM products and facilitate mutual trade in these products.
  • Cooperate in such areas as facility management and regulations and requirements for clinical trials, with a view to achieving mutual recognition of clinical data; conduct exchanges and cooperate in quality standardization for traditional CM products
  • Support cooperation between the traditional CM and medical products enterprises of the two places and jointly strive for international market expansion; strengthen trade and investment promotion and cooperation in the traditional CM and medical products sector; and conduct exchanges and consultations on ways to solve problems arising from cooperation in traditional CM and medical products sector.

To promote and implement mutual cooperation, the two sides will support and assist the participation of semi-official and non-official organizations in the traditional CM and medical products sector. They include the cooperation already established between the National Center for Traditional Chinese Medicine and the Hong Kong Jockey Club Institute of Chinese Medicine Ltd.

Pansy Yau
Research Department, Hong Kong Trade Development Council

 

Hong Kong’s Advantageous Position in Research and Development of Chinese Medicines (Courtesy Translation by HKJCICM)
 

Traditionally, Hong Kong has played the role as a major distribution centre and entrepot of Chinese medicine (CM) raw materials. After the return of sovereignty to China in 1997, the HKSAR Government considered that the city had favourable conditions for CM development. It therefore proposed to develop the CM industry, through the application of science and technology, to promote economic growth and enhance Hong Kong’s international competitiveness in this field. The set up of the Hong Kong Jockey Club Institute of Chinese Medicine Ltd (HKJCICM) in 2001 provided further impetus for the research and development of CM. In recent years, much progress has also been made in the areas of education, scientific research and medical services of CM in Hong Kong.

In spite of having a relatively short history of CM research and development (R&D), Hong Kong has unique advantages which will support CM development, for example, our geographical location, international outlook, availability of capitals, technology and information infrastructure, bilingual languages and a Chinese culture. We adopt legal and medical systems similar to those of the West and Hong Kong enjoys a good international reputation. Furthermore, researchers are familiar with global requirements for the R&D of botanical and chemical drugs. With the use of advanced technology and quality control methodologies associated with development of medicines, the R&D outputs and products developed stand better chance to be accepted by the international communities. In addition, with the emerging regulations in intellectual property protection and the signed international trade protection agreements, Hong Kong provides mechanisms for intellectual property protection and trade facilitation across the innovation and product R&D value chain. It also has a pool of talents with good marketing experience and understanding of the pharmaceutical and healthcare markets. Together with our good distribution networks, the industry is well poised to undertake market development within and outside Hong Kong.

With the Mainland as our hinterland and our ability to access and leverage on the Mainland’s abundant CM resources such as the raw materials, CM formuale, research and clinical experience, a good foundation has been laid for both sides to foster closer R&D collaborations. With these advantages, Hong Kong could be placed ahead of other countries in the west in the development of research-based medicines based on CM, meeting international market requirements for medicines of safety, high quality and efficacy.

For CM R&D strategies, Hong Kong will make reference to the experience gained within and outside the Mainland and will strive to fulfill the technical requirements of the State Food and Drugs Administration (SFDA) of China and the Food and Drugs Administration (FDA) of the USA. The SFDA has a long history and much experience in regulating CM in the world. The CM regulations not only combine traditional theory of CM, but also invite the use of modern medical sciences and technology for the development of medicines. The FDA is regarded as the world’s most authoritative science-based regulator of medicines. The Draft Guidance for Botanical Drug Products, published in 2000, aims to embrace the characteristics of botanical medicines and the chemical approach of drug development. With the technical guidelines provided by the two regulators and the aforementioned advantages that Hong Kong possesses, we would strive to create successful R&D cases.

Rheumatoid arthritis represents an area of unmet medical needs and presents high incidence and morbidity rates. In European and American countries, the incidence rates stand at 0.3-1.0 % of population. The quality of lives of the patients is seriously impaired due to its chronic nature, extended course of therapy and repeated incidence. Currently, there is no single western medicine that can effectively cure this disease. CM, with its unique features, can effectively moderate the symptoms of the patients suffering from the diseases, slow the disease progression and improve the quality of life of sufferers. As it carries less toxic effect, it is also deemed more suitable for treating chronic diseases. Therefore, the research and development of anti-rheumatoid arthritis medicines from traditional CM is likely to bring substantial economic and social benefits. In view of this, the HKJCICM has decided to fund a research project in collaboration with the Hong Kong Baptist University (HKBU). This project makes reference to the FDA Guideline on Botanical Drug and aims to meet the technical regulatory requirements of the SFDA. Through the use of modern science, the research team aims to develop safe, effective and high quality medicines based on identifying active principles of traditional CM. This project will pave the way for research leading to meeting international regulatory requirements. During the course of research, HKJCICM works closely with the HKBU research team. The project management approach as adopted by HKJCICM adds value to the research process and helps the team adheres with the R&D plan and objectives.

Prof Liu Liang and Dr Zhou Hua
School of Chinese Medicine, Hong Kong Baptist University

 

 
 
 
 
 
Editor: Edmund Lee
Deputy Editor: Xu Hong-Xi
Associate Editors: Andrew Cheng, Margaret Li, He Zhen-Dan
Copy Editor & Translation: Pandora Chan
Production Editor: Louis Cheuk
Editorial Assistant: Luan Hui

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