Traditional Chinese Medicine: Business Blockbuster or False Fad?
Tong Ren Tang is a household name in China. The pharmacy specializing in traditional Chinese medicine (TCM) has been around since 1669. Legend has it that Tong Ren Tang was set up as the royal pharmacy for the palace of the Qing Dynasty. The dynasty came and went, but Tong Ren Tang withstood the test of time. In fact, today it has spread its wings beyond China to places like the United Arab Emirates, Vietnam, the Philippines, Malaysia and Australia. By 2015, it aims to open over 100 overseas stores in countries as diverse as the US and Japan.
From the claims of healing herbs to pain-reducing acupuncture, TCM is steeped in historical terminology and philosophical musings. Taking a so-called holistic approach to health and wellness, TCM has long been practised in China. Today, as many companies like Tong Ren Tang are discovering, it is also big business, both in China and many Western countries. According to a 2012 report by market research organization IBISWorld, government support and increasing demand in China has driven TCM to expected revenues of $25.7 billion in 2012, up 14.8% from 2011. The industry has grown by 20% each year on average since 2007, and profitability has continued to rise as well.
So what accounts for this sudden spurt in TCM’s popularity, and is it sustainable in the long run?
There is no doubt that TCM within China is a hugely profitable business with growing industrial output. According to China’s National Bureau of Statistics, in 2011 the value of the industrial output of TCM reached RMB 418 billion, recording a year-on-year growth of 37.9%.
The surprising fact, however, is that TCM is growing at a faster clip in other countries. The National Bureau of Statistics also points out that TCM exports rose in 2011, with exports to the US alone jumping by 66.3% year-on-year.
It is not just Western countries that are seeing growth. Africa is now China’s largest market for the export of medical products, both TCM and otherwise, thanks to low cost. In fact, in 2011 TCM was formally introduced into South Africa’s healthcare system.
Many of the large Chinese TCM companies have expanded outside of China. Apart from Tong Ren Tang, others like China Health Resource, Inc. have seen record results this year thanks to increased sales of premium TCM herbs such as its Tian Ma brand in Western countries, as well as a growth of low-cost TCM options in Africa and Asia.
Much of the success of TCM in Western countries is because it is associated with wellness. It offers an alternative to supposed Western modes of thinking about treating the symptoms of disease as opposed to seeing the human body holistically. This is pushing TCM from the fringes to the mainstream in terms of demand and acceptance.
Australians, for example, are spending over AUS$4 billion per year in the complementary and alternative medicine industry, some of which is on TCM. In July this year, the Chinese Medicine National Registration Board began to officially register Chinese Medicine practitioners nationwide in Australia.
In fact, TCM marketing has become a business in itself, with a number of companies now dedicated to providing marketing solutions for individual TCM practitioners and TCM companies.
“There is potential in all areas of Chinese medicine, from the herbs and acupuncture to health preservation and wellness. The ideas of Chinese medicine can be used as a format for understanding the human body to design wellness plans and treatments,” says Alex Tan, a qualified TCM practitioner and educator from Australia who founded the Straight Bamboo TCM Clinic in Beijing.
Tan thinks that aside from his firm belief that TCM really can improve health and wellness, TCM has appeal because of its cost-effectiveness. “TCM (is a) low-technology, low-cost approach. Most of the developing world cannot afford Western medicine purely because of the cost. These countries can use the methodology of Chinese medicine to diagnose and then use local herbs or acupuncture pins which are cheap to treat patients,” says Tan.
This is not always the case in developed countries, however. “Due to the National Health Service in the UK, TCM does not enjoy any economic advantage and is seen as quite expensive. A typical consultation with a Chinese doctor in the UK can cost up to £50 before any charges for medicine are added,” says Mike Bastin, Visiting Academic at Tsinghua University and researcher at Nottingham University’s School of Contemporary Chinese Studies.
The potential economic benefits of TCM are also attracting large pharmaceutical companies, as they begin to research ways of using TCM. Britain’s biggest drug maker, GlaxoSmithKline, has set up a number of research labs in China that are looking at ways of developing TCM. The company has created a Discovery Performance Unit that will integrate traditional Chinese medicine with modern drug discovery.
Economics over Evidence
Despite the economic success of TCM in recent years,TCM also has its share of problems. Although qualifications and regulations are growing and advocates strongly recommend that those offering such services be fully qualified and appropriately registered, the industry is still fragmented in terms of regulation and quality.
For example, the USFDA has struggled to regulate herbal medicines, as it has often seen herbs as ‘not drugs’, thereby leaving them almost completely unregulated. Herbs are classified as dietary supplements, leaving the FDA with no power under federal law to regulate these products in the same way as drugs.
This is not to say that the FDA could not approve certain TCM products. In fact, the Dantonic pill by TCM manufacturer Tasly, used to treat angina and heart disease and approved by drug watchdogs in Canada, Russia, the Republic of Korea, Vietnam, Singapore and some African countries, is currently in Phase III trials to become the first USFDA-approved TCM product in the US.
Of course, such legitimacy is not always sought, given the lack of regulation of herbal products. However, the European Union (EU) has been stricter. In May 2011, all unauthorized TCM products were pulled from shelves in the EU. This followed a directive in 2004 that gave a seven-year grace period to manufacturers of herbal medicines to register their brands. No Chinese TCM producers were able to obtain a license due to high costs and difficulties meeting the EU’s stringent criteria.
This has changed recently however, with SU BioMedicine BV successfully registering the Diao Xin Xue Kang capsules, the first Chinese medicine in the Netherlands this year.
Whilst it is clear that herbal TCM has some promise because many herbs do, in fact, have active ingredients, the products approved are so far the exceptions in terms of regulation and stringent testing. Although most practitioners seemingly welcome further research, this belies the fact that extensive research in many areas has already been carried out. Also, in areas where further research is needed to potentially prove efficacy and mechanisms of action for treatments such as herbs or acupuncture, treatment still continues. This is generally a reversal of the usual methodology of science-based medicine, where efficacy and significant understanding is needed before treatment is prescribed.
Take acupuncture, for example. The well regarded website Science-Based Medicine gives an excellent overview of the efficacy of acupuncture. In summary, there appears to be no plausible mechanism for acupuncture, and most of the evidence supporting acupuncture, of which there is, in fact, very little if any, is generally not scientifically rigorous. A large majority of acupuncture studies showing any sort of positive effect have come out of China and have not been properly peer-reviewed or shown to be scientifically rigorous.
And although major manufacturers do at least have quality controls in place, outside of this there is a worrying lack of quality control and regulation. For example, an Australian-led group of scientists found traces of endangered species, as well as potential toxins and allergens in traditional Chinese medicines that were confiscated from overseas travellers. They performed ‘second generation DNA sequencing’ on 15 samples, and found traces of animals including Asiatic black bear and the saiga antelope.
“There’s absolutely no honesty in the labelling of these products. What they declare is completely at odds with what’s in there,” says Mike Bunce, a geneticist at Murdoch University near Perth, Australia, who led the study, in a comment to the journal Nature.
These concerns do not appear to be harming the TCM business as of yet though. Marketing that plays to today’s consumers regarding health and wellness, as well as the logical fallacy that just because something is ancient and has a long history means it must work, will continue to attract people to TCM. Combined with consumers’ frustration with what they see as the problems of Western medicine, the rise of TCM is likely to continue.
However, without addressing many of these concerns and really putting money into rigorous research, the economics of TCM will surely be overtaken by the weight of evidence in the long-term.
(Image courtesy Flickr user avlxyz’s photostream)