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Cablegate: Guangdong's Pharmaceutical Professional Association Strives

VZCZCXRO4964
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0556/01 1350015
ZNR UUUUU ZZH
R 150015Z MAY 07
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 6049
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHHMUNA/HQ USPACOM HONOLULU HI
RUEAUSA/DEPT OF HHS WASHDC
RUCPDOC/USDOC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC

UNCLAS SECTION 01 OF 02 GUANGZHOU 000556

SIPDIS

SIPDIS

STATE FOR EEB/CBA AND EEB/TPP/ABT
USDOC FOR 4420/ITA/MAC/MCQUEEN
USPACOM FOR FPA

E.O. 12958: N/A
TAGS: TBIO ECON ETRD SOCI CH
SUBJECT: Guangdong's Pharmaceutical Professional Association Strives
to Self-Regulate the Sector

REF: A) 06 Guangzhou 15728

B) 05 Guangzhou 21224

1. (U) SUMMARY: The Guangdong Pharmaceutical Professional
Association (GPPA) disclosed that in 2006 it issued a
self-regulatory code of standards for the local pharmaceutical
sector in the province. GPPA's code appears to be an attempt to
preempt Provincial Government investigation and sanction of the
region's pharmaceutical companies. GPPA Vice Chairman Zhang Junxiu
fully understands the consequences, financial and otherwise, if
Guangdong's pharmaceutical industry fails to implement the
appropriate safeguards. END SUMMARY.

Principles and Content of the Self-Regulatory Code
------------------- ------------------------------

2. (U) GPPA established the code in order to help its members
conform to the relevant national laws and regulations. The
standards require members to pledge they will not counterfeit
brand-name products, nor apply for or accept authentication from
unqualified suppliers. The GPPA would recommend that the provincial
government single out, for praise, those who abide by the standards.
The GPPA standards also specify penalties for companies that
violate the code.

3. (U) Penalties can include:

-- a warning from the GPPA;
-- a public statement of criticism;
-- cancellation of GPPA membership;
-- reporting the violation to the relevant government
administration or law enforcement agency; or
-- a recommendation that the government revoke the
violator's business license.

Implementation of the Standards
-------------------------------

4. (U) GPPA has seven sub-branches which conduct evaluations on a
random basis of the performance of its members The code of
standards applies only to GPPA members. Nevertheless, GPPA will
look into the performance of non-member companies from the
perspective of an ordinary consumer and report regulatory violations
to the government as well.

Obstacles to Acceptance of Traditional Medicine
----------------------- -----------------------

5. (U) GPPA Vice Chairman Zhang Junxiu told Econoff that member
companies hope to expand exports of Chinese traditional medicines.
He lamented the failure to define Chinese traditional medicine
treatments in terms of modern western medical science and viewed
this as a barrier to trade, which prevents growth in this market
and its acceptance overseas. Zhang also expressed strong interest
in developing a dialogue with the U.S. Food and Drug Administration
(FDA), PhRMA, and American experts knowledgeable in both Chinese
traditional medical theory and western medical science.

Background
----------

6. (U) GPPA is a "social association" registered with the Guangdong
Civil Administration Office and overseen by the Guangdong Economic
and Trade Commission. On September 10, 2006, GPPA issued a
self-regulatory code of standards for the local pharmaceutical
sector in Guangdong. Guangdong's pharmaceutical sector is one of
the most robust in mainland China. As a result of the economic
reform policies of the 1980's, pharmaceutical companies have
introduced advanced production technologies from other countries.
Guangdong is also home to several large pharmaceutical factories
which specialize in Chinese traditional medicine production. In
2003, the Provincial Government decided to make the pharmaceutical
industry one of its nine major industries.

7. (U) As a professional association, GPPA has three main goals: to
ensure that pharmaceutical companies abide by the law, to protect
its members' legitimate rights and interests (especially IPR), and
to promote growth in the sector.

Comment
-------


GUANGZHOU 00000556 002 OF 002


8. (U) GPPA's code of standards appears to be an attempt to preempt
Provincial Government investigation and sanction of the region's
pharmaceutical companies. GPPA is not completely independent of
government control, nor is it as influential as U.S. professional
associations. Implementation of the standards will likely be uneven
in the short-term, but Vice Chairman Zhang fully understands the
financial consequences of for the pharmaceutical industry for
failure to live up to its stated goals.

GOLDBERG

© Scoop Media

 
 
 
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