Feng Shuangquan, A 49-year-old peasant from the northeastern Chinese city of Baoding, entered his local hospital in April, 2006, suffering from liver failure. For the next two months, he was in and out of the hospital for blood transfusions, but doctors couldn't halt the deterioration. Finally, one of his doctors handed a note to Feng's wife, who was sitting by his side. Without even asking her to read it aloud, Feng knew the news was bad. "She didn't say anything," he recalls, "but I recognized everything from her face." The recommendation: Let Feng go home and die.
Another doctor on the team refused to give up. He had heard an American company was testing an experimental device in China that just might keep Feng alive. It was an artificial liver—the rough equivalent of a dialysis machine for kidney failure—developed by Vital Therapies Inc. (VTI) of San Diego. Admitted to the trial, Feng spent several days in a hospital bed while VTI's technology took over his liver's function and gave the diseased organ a chance to recover. Today, "my health is pretty good," Feng reports. "My life was saved."
After struggling for years to get its product approved in the U.S., VTI may be on the verge of a breakthrough thanks to patients like Feng. In America, the company had trouble finding enough people to participate in its clinical trials. But that's not a problem in China, where authorities estimate there could be 130 million hepatitis B patients and carriers—a number larger than the combined populations of Britain and France. Many are poor farmers and workers desperate for medical attention. "You just don't have this [pool] in the U.S.," says Terry E. Winters, a Welsh-born biochemist who is VTI's chairman.
China's immense patient populations suffering from cancer, diabetes, cardiovascular illnesses, and a whole range of infectious diseases have captured the attention of drug and medical device companies across Europe and America. They are expanding research and testing facilities in China, not only because costs are low and it is relatively easy to recruit patients, but also because Beijing insists new drugs be tested locally before going on sale.
Many Western drug companies have had research bases in China since the 1990s. But the past 12 months have seen a flurry of new activity. In May of last year, AstraZeneca PLC (AZN ) committed $100 million in new research spending, much of it earmarked for cancer. In November, Novartis (NVS ) announced plans for a $100 million research and development center in Shanghai. And Eli Lilly & Co. (LLY ) has 35 trials under way involving thousands of patients. The company will enroll twice as many patients this year as in 2006—some in trials that would be hard to fill in the U.S., says Dr. Steven M. Paul, Lilly's executive vice-president for science and technology. "We can do these very safely and quickly in China."
Trials run by western companies bring big benefits to China. Patients gain access to "cutting-edge medical products," says Beat Widler, head of clinical quality at Swiss pharma giant Roche (ROB.VX ), which invested more than $50 million on its Chinese operations last year. At the same time, he adds, Chinese doctors, nurses, and research staff "improve their understanding of trial methodology."
Yet working inside China's sprawling, often under-supervised health-care system may raise complex ethical questions. In the past, Chinese medical authorities have greenlighted risky experiments, including stem cell injections and treatments that involve altering the patient's genes. Moreover, people recruited into trials don't always understand what they have signed up for, but they rush to join because it may be their only chance to see a doctor.
Partly because of pressure from Western doctors and health-care companies, the government has been trying to clarify the ethical ground rules. One of the harshest criticisms leveled against China is that it tolerates trafficking in human organs, some of which are harvested from executed prisoners. Western medical companies haven't been implicated in the organ trade, but their products are widely used to treat transplant patients, including "medical tourists" who come to China to undergo such procedures.
Roche, for example, sells a popular drug used to suppress the immune systems of patients receiving organ transplants. The drug, CellCept, is a lifesaver, but figuring out who gets access to it can be complicated. "In the area of transplants, we have involved external groups of ethicists to help come up with provisions that are clear and transparent," says Roche's Widler. Other companies choose to keep their distance. The transplant issue "absolutely hinders some companies that desire to interact in a strong way with China," says Dr. J. Michael Mills, a transplant specialist from the University of Chicago who is advising Chinese regulators on new guidelines in this area. In May, Beijing imposed a ban on trading in human organs. Dr. Duan Zhongping, vice-president of Beijing Youan Hospital, says he has witnessed a big drop in the number of transplants in the past year.
But these steps don't address all the concerns of foreign pharmaceutical executives developing products in China. They often point out that clinical trials get tied up in red tape. "It's a rather opaque process," says Mark Engel, chairman of Excel PharmaStudies Inc., which runs trials in China for major drug companies. Dr. Cezary Statuch, executive medical director for global medical affairs at Bristol-Myers Squibb Co. (BMY ) in China, says the country's overstretched medical system leaves Chinese doctors with little time to do trials well. "It's done on top of their ward job," he says. "They see 100 patients a day and do this on their lunch break."
Despite such hurdles, running clinical trials for novel drugs and devices has become a growth industry. A new study by A.T. Kearney Inc. reports that China has surpassed India and Russia as the top overseas choice for clinical trials among major drug companies. China's advantages are "compelling," says Kearney Vice-President Carol Cruickshank.
Much of the appeal comes down to money. Running a trial in China may cost as little as 15% of what a company would pay in the West, says Reenita Das, Asia-Pacific vice-president for health care at consulting firm Frost & Sullivan Inc. In the case of VTI, maker of the artificial liver that helped Feng, the trial costs about $15,000 per patient, vs. $50,000 in the U.S. The decision to run the tests in Beijing was "a no-brainer," says VTI Chairman Winters. "China beckons."
By Bruce Einhorn, with Michael Arndt in Chicago