In addition to enjoying a rich culture and history, TCM is also a billion-dollar market that offers some surprising opportunities for Western medical and consumer brands.

What is TCM and how big is the market?

TCM is an alternative medicine practice that combines a range of remedies and physical treatments, with a history dating back more than 2,000 years.

Among the many kinds of TCM treatments on offer, herbal medicine is both popular and accessible. Pharmacies and online shops sell a wide range of prepared herbal remedies – some prescription only, some over-the-counter – that come in forms such as drops, tablets or granules, many of which are mixed with water to form a drink or soup.

In terms of physical therapies, acupuncture, a technique involving inserting thin needles into specific body points to balance energy flows, is widely practised, as is cupping therapy, characterised by creating suction on the skin to improve blood circulation and promote healing, which has also gained international popularity (especially since telltale cupping marks have been seen on the backs of professional athletes like Michael Phelps and Hollywood stars like Gwyneth Paltrow).

TCM doctors may also prescribe specific diets, such as avoiding meat or spicy food.

TCM coexists with Western medicine in China, complementing and contrasting with it. In hospitals across China, TCM is offered alongside Western medical services, and patients often combine both types of treatments to avail comprehensive healthcare, since TCM is said to be grounded in the principles of balance and identifying the root causes of conditions rather than treating the symptoms.

Due to this broad range of treatment options and cultural backdrop, the TCM market in China is huge. According to some reports, in 2019, the total volume of TCM commodity imports and exports in China was worth US$ 6.174 billion (£5.028 billion). TCM products are thought to account for around 40% of drug sales in China.

Moreover, in recent years, it has experienced unprecedented growth, fuelled by an ageing population, health fears around the Covid-19 pandemic, and rising support for Chinese culture and made-in-China products (often referred to as the ‘guochao’ movement).

The most valuable company in the TCM market is Yunnan Baiyao, which has a market cap of over RMB 91.42 billion (£10.2 billion). Other major companies include Beijing Tongrentang and Guangzhou Baiyunshan.

TCM Market challenges

Despite its size, the TCM market is not without its challenges. Regulatory hurdles, quality control issues and international scepticism are significant impediments. Standardising TCM practices and products for quality and safety assurance is a primary concern for the Chinese government. Furthermore, scientific validation of TCM principles and methods, compatibility with Western medicine protocols, and global acceptance and integration are ongoing challenges.

How Western brands can navigate the TCM market

A market that is so inherently entwined with Chinese culture and history may seem like one that is difficult to access for Western brands. But for those that understand its cultural, historical, and social intricacies, the opportunities are there.

In recent years, collaborative approaches that respect and integrate TCM’s essence while introducing trendy products or formats have proven very popular with Chinese consumers.

In sum, any Western brand considering the TCM market needs to consider the following principles:

1. Integration: Combining Western technologies and TCM principles to offer hybrid solutions that actually meet patient needs.
2. Education: Educating the market on the benefits of Western medicine, while being receptive to the values and benefits of TCM.
3. Partnership: Collaborating with established TCM brands to co-create products and services that are culturally sensitive and globally competitive.
4. Innovation: Infusing Western medicine with innovations that are compatible with TCM’s holistic, personalised, and preventive focus.

The TCM market in China is a dynamic and evolving entity. Western brands venturing into China’s medical market have the opportunity to create uniquely cross-cultural, multi-dimensional medical solutions by approaching TCM with respect and openness. As the health concerns of China’s ageing population grow, there will be opportunities for Western brands to penetrate this market.

The post Exploring the Traditional Chinese Medicine Market in China appeared first on Focus - China Britain Business Council.

China’s healthcare system is complex. As we can see from our recent article produced by the Commonwealth fund, the quality of care people receive depends on a patient’s type of job, region of residence, and income bracket. It is a far cry from the universal healthcare many European patients have come to take for granted, and nearer to the employment-based insurance programmes common in America.

Trying to keep nearly a billion and half people healthy is not easy. Especially with an ageing population and a limited amount of funding. China’s healthcare spending is 6.57% of GDP (in 2018) compared with the UK’s at 9.6%. In 2018 China spent £470 per person, compared with £2,989 in the UK in 2017.

The majority of residents are covered by one of the public insurance programmes, which are either paid for by employers and employee contributions or in the case of rural residents or the elderly and unemployed, paid by local governments with voluntary contributions.

However, relatively low caps on treatments and co-payments on medicines mean that patients are still paying for a sizeable chunk of care themselves in out of pocket expenses. Although this has fallen from about 60% in 2003 to around 30% today it can still be crippling for many.

“Public insurance now covers about 92% of the population, but urban and rural resident schemes are still not very generous and so many people still have significant out of pocket payments,” says Jane Duckett of Glasgow University who has been researching China’s reaction to the healthcare crisis.

For the terminally ill or those involved in serious accidents, that may mean that only the independently wealthy are able to afford life-saving treatment. Many Chinese residents with cancer choose to avoid treatment as the costs would not only mean spending all their savings but leaving their children in major debt.

Many patients with chronic illnesses chose to avoid the costs of care so as not to financially burden their families

The growing middle class is increasingly investing in private healthcare, in a bid to cover the costs that exceed the government-imposed reimbursement caps offered as part of their public health insurance, and to pay the difference in co-payments. The number of private hospitals is also on the rise as middle-class patients bypass the state system entirely.

The government is also pushing Traditional Chinese Medicine (TCM) as a low-cost alternative to expensive, imported and patented western drugs. However, there are many dangers in promoting medicine that has little regulation when it comes to quality and dosage, and even less research into whether the benefits outweigh the risks. Although research is being undertaken, TCM is certainly not a viable alternative to tried and tested western medicine for all but the most minor of ailments.

The recent Covid pandemic has shown that China’s healthcare system is robust enough to deal with a major outbreak. However, just as in other parts of the world, people were told to stay away from hospitals unless they had an emergency, which may have led to the number of cases and deaths being under-reported and those with non-Covid related illnesses not getting the care they needed.  

China’s love of infrastructure and hardware has led to investment being ploughed into large urban hospitals rather than rural healthcare facilities and the training of medical workers.

China claims to have 2.6 doctors for every 1,000 people, but according to the WHO, half of those doctors don’t have a bachelors degree, and in rural areas, the number of qualified doctors is as low as 10-15%. There is also a shortage of nurses, with just one nurse per doctor in China compared to three in the UK.

Primary care clinics, such as GPs – that are supposed to handle minor ailments and release the burden on hospitals ­– are almost non-existent in China. Those that exist are underfunded and not as well trusted as hospitals. A mere 5% of doctors in China act as GPs, meaning those with any kind of sickness turn up at the doors of a hospital.

This year’s pandemic will lead to major changes in China’s healthcare system. The central government will likely invest more in healthcare and continue its pro-TCM campaign. Private insurance companies that previously had a relatively low uptake will see a growth in demand. And there will be a rise in telemedicine. Whether the telemedicine boom that has been visible in the first half of this year will continue apace is yet to be seen. Telemedicine in China has many top-down restrictions on what can be diagnosed and by whom, and which medicines can be prescribed. From the bottom-up there are also challenges, as culturally, Chinese patients expect to have their pulse and temperature taken by a doctor (often versed in TCM) before they will trust them.

China needs to invest more money in healthcare, yes, but it needs to invest in soft rather than hard skills. This means more grassroots investment into primary care. Training of nurses and doctors to keep all except emergency and seriously ill patients clear of the hospitals. Traditional Chinese medicine could well be used as a complementary addition to western medicine, but without major research and regulation, it cannot be a truly effective alternative. Tele-medicine and online diagnosis will go a long way towards easing the burden on overstretched doctors in busy hospitals, but legislation needs to ensure doctors are qualified in order to foster trust among their patients, and regulation needs to be eased to permit them to prescribe medicines safely and more effectively.

For more information about China’s healthcare system contact jamie.shaw@cbbc.org or Wendy.Wang@cbbc.org.cn

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The Traditional Chinese Medicine (TCM) industry is worth over £30 billion and is only set to grow as interest increases worldwide and the Chinese government heavily pushes its export. However the industry is not without its fair share of issues and challenges. Those at Kew are doing their best to take advantage of the benefits while ensuring the environment and its users are not put at risk.

KEW HAS A UNIQUE COLLECTION OF OVER 7,000 SAMPLES OF PLANT THAT ARE USED IN TCM. HOW DID KEW COME TO INVEST IN THIS COLLECTION?

Kew has had a long tradition of working with medicinal plants. In the 1990s there was increased interest in the use of TCM plants in the UK but also an increase in the reporting of adverse responses. There was a famous case in a Belgium weight loss clinic where the misidentification of a herb used in TCM lead to people having renal failure and cancers of the kidney. That resulted in legal action being taken, including in the UK, to ban plants containing aristolochic acids.

We were heavily involved in developing a chemical method to detect aristolochic acids in plant-based TCM formulas. Kew was called in to analyse samples when materials were seized and was asked by hospital toxicology units to assist in identifying plants. This was a challenge as some TCM prescriptions can consist of about 10-15 different plant parts.

Kew was called in to analyse samples when materials were seized and asked to assist in identifying plants.

Kew could see the need to assist with identification, and so set up a collaboration with The Institute of Medicinal Plant Development (IMPLAD) in Beijing. This involved extensive fieldwork in China. The collaboration has enabled us to build a first-class collection. We are kept very busy with authentication requests from scientific researchers and pharmaceutical companies. There is growing interest in researching TCM.

WHAT IS THERE TO BE GAINED FROM STUDYING TRADITIONAL CHINESE MEDICINE?

We’ve got an awful lot to learn from plants. They’re very good at protecting themselves from diseases. And many of the properties that they use to defend themselves have potential as medicines.

Yew trees have been used to treat cancer in China for thousands of years. In the 1960s American scientists started to identify the active compounds and synthesised them into modern-day drugs. Now drugs based on taxane compounds found in Yew trees are used to treat a wide range of cancers. There are species of salvia used in TCM that have been shown to have anti-inflammatory properties; and peony plants, used to treat rheumatoid arthritis, have a range of anti-oxidant activity. It’s not all folklore, there’s an increasing body of scientific evidence that shows that plants in TCM do have an effect.

WHAT ARE THE RISKS ASSOCIATED WITH TCM?

They are natural and therefore are going to vary, depending on how the plants are grown. You need to be careful to get the right part of the plant, and to know that it’s been harvested at the right time and prepared correctly.

If a patient doesn’t tell their general practitioner that they’re taking TCM or they don’t tell their TCM practitioner that they’re taking drugs, then you can get serious drug/ herb interactions. In the UK, few doctors have training in herbal remedies, unlike some parts of Europe, such as France. But the public is interested in these kinds of therapies, as they might want something more gentle or perhaps conventional Western medicine hasn’t worked for them or has had strong side effects.

We’ve got an awful lot to learn from plants. They’re very good at protecting themselves from diseases.

If you’re taking TCM, it’s important to go to a reputable practitioner and ask where the material is coming from and whether it has been verified. The Medicines and Healthcare products Regulatory Agency (MHRA) is making sure more standards are available for people to check the quality of their plants. Personally, I’d be worried about what the public might get on the internet unless they get it from a verified supplier.

We need to make sure that if a patient is thinking of taking traditional Chinese medicines that they are of very good quality and that’s the kind of work that Kew gets involved in.

HOW IS KEW HELPING TO MAKE THE USE OF TCM SAFER?

We are working with the UK Department of Health to verify standards and also other health departments in Australia, Canada and America. We are also involved in The Good Practice in the Traditional Chinese Medicine Research Association, which is developing best practice methodology for clinical trials. Some of the criticism levelled at TCM is that the research hasn’t been done with the level of accuracy that you would need for a medicinal drug. There’s a lot of justification for that. That’s why we’re working so hard on improving what is going on in this area.

Internationally, there’s growing scientific interest in understanding how TCM works, especially in areas where there is no conventional cure. There are some TCM formulas, for example, that are attracting attention because they’ve been successful in treating people in China with Covid-19. But we need to have really rigorous trials.

Research is limited for natural products that can’t be patented

HOW IS KEW INVOLVED IN RESEARCHING TCM AND COVID-19?

One project is associated with looking at prescriptions that were given to patients with Covid-19 in China. We are working with three hospitals in China. They have clinical data. On our side, we are looking at what is known about those plants and the activity of those plants. It’s in the early stages, so I cannot say too much – we’re worried about talking about some of these projects too early in case we have something that does more harm than good – but we are likely to have a paper out towards the end of the year.

WHAT CHALLENGES ARE INVOLVED IN TRANSLATING TCM KNOWLEDGE INTO MORE CONVENTIONAL FORMS OF MEDICINE?

Once information about the properties of a TCM plant is out there in the public domain, it makes it difficult for a pharmaceutical company to invest in synthesising it as a drug. It’s expensive to invest in working out the dose of a medicinal plant and how it can be administered. Who’s going to invest when you can’t patent it and have a period of exclusivity since it’s already out in the public domain?  So it’s very difficult to get a medicinal plant to cross that line and become a conventional medicine. It remains complementary.

Who’s going to invest when you can’t patent it and have a period of exclusivity since it’s already out in the public domain?

WHAT OTHER CHALLENGES DOES AN INCREASED INTEREST AROUND THE WORLD IN TCM BRING?

Working and travelling within China allows Kew to get a better idea of which plants are wild harvested and which are commercially grown. This information is very important as the use of TCM plants increases globally, because there’s pressure on the supply. You can get over-harvesting and sometimes substitutes and adulterants are being sold that are not as effective as the main species. For example, now hardly any wild harvested material exists of ginseng – one of the most popular TCM plants in the world. It’s being commercially grown.

Now hardly any wild harvested material exists of ginseng. It’s being commercially grown.

And that can be a problem because sometimes cultivated material is not the same quality as what is growing in the wild. Growing in different conditions can affect the levels of active materials in the plant. There’s a movement taking place looking into how you can sustainably harvest wild material. If you take too much of something out of its natural environment, it can affect the equilibrium of what is naturally coexisting with the plant – other plants, the soil, the insects and birds. We need to better understand the ecology of where these plants are growing.

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Since 2016, China has been heavily promoting Traditional Chinese Medicine (TCM) as an alternative to expensive Western drugs. The State Council has a national strategy that promised “universal access” to TCM by 2020 and a “booming industry” by 2030.

The TCM industry is becoming a “new source of growth” for China’s economy, said a white paper released in 2017. Shortly after this announcement, a law came into effect that requires local governments to open TCM departments in all general hospitals, and to give “equal emphasis” to TCM and Western medicine.

As well as providing universal TCM care domestically, the strategy aims to attract more TCM tourism to China and grow the £40 billion industry. Currently, tens of thousands of tourists flock to China for treatment, and China plans to create 15 TCM model zones for medical tourism by the end of the year.

China plans to create 15 TCM model zones for medical tourism by the end of the year.

TCM centres are also springing up internationally, with 30 expected to open outside of China by the end of the year, aided in promotion by various Confucius Institutes. And it works too. TCM sales in Belt and Road countries rose 54% in the first year after the campaign was announced in 2016.

TCM has been a part of Chinese culture for centuries. Often prescribed as a mix of herbs and powders, many recipes are taken from the 16th-century book ‘Compendium of Materia Medica’ by herbalist Li Shizhen.

In 1911, China’s new leaders spurned TCM as superstition and mysticism, but it gained mainstream support when Mao Zedong said that it could also help under-served populations. “Even though I believe we should promote Chinese medicine, I personally do not believe in it,” he once told his personal physician.

Whilst the promotion of healthy eating and regular exercises that TCM theory supports is universally agreed to be a sensible lifestyle choice, the concept of qi – an energy system running along meridians of the body – has caused many to label it as mysticism.

The unregulated nature of TCM products means that some ingredients cause damage to ecosystems and to wildlife that is hunted for its bones, scales and horns; and also, to the patients themselves. Birthwort, a common ingredient in TCM for example, contains aristolochic acid, that has been proven to cause bladder cancer.

Ingredients derived from endangered animals such as bears, rhinos and tigers are also commonly found in TCM, and lead to the often-illegal international trade in such prohibited items.

Furthermore, a lack of regulation leads to “absolutely no honesty in the labelling of these products,” said Mike Bunce, a geneticist at Murdoch University who carried out tests on a number of TCM products seized by Australian Customs. “What they declare is completely at odds with what’s in there.”

A lack of regulation leads to “absolutely no honesty in the labelling of these products,” said Mike Bunce, a geneticist at Murdoch University

Yet exports of TCM products to western countries are on the rise, because the risks are often downplayed by strong lobbying groups. Not only has China rolled back domestic regulations on TCM, but the World Health Organisation will also officially recognise TCM for the first time this year, including TCM references in its new International Classification of Diseases (ICD) compendium.

Illnesses such as Spleen Qi Deficiency or Liver Qi Stagnation will be recognised by the WHO as official illnesses. This might have something to do with TCM proponent Margaret Chan, who was head of the WHO between 2006 and 2017. The current virus has brought TCM back into the spotlight. One leading theory is that the virus spread via the pangolin, whose scales are roasted and ground into a powder as a TCM treatment for dry skin.

A number of misleading WeChat posts circulated various quack treatments, and the People’s Daily newspaper wrote that Shuanghuanlian, a TCM herb tincture, was proven to be effective against the virus. A rush on the product ensued but it was later announced that the product was not actually proven to be effective.

It is too early to tell the exact causes of the virus, but the consumption of wild animals is likely to have been instrumental in its jump from animal to human. If the disease is to be stopped, then TCM alone won’t be enough. Sensible healthcare and education are, however, completely essential.

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