An economic crisis is a bad time to get sick, especially in poor countries. As conventional drugs become scarcer and more expensive, desperate patients are turning to cheaper herbal remedies to treat even serious illnesses like diabetes, cancer and, these days, covid-19. Many doctors, of the officially recognized variety, doubt the effectiveness of these treatments. But the business of its sale is in very good health.
In 2021, the sales of Yiling Pharmaceutical, a large manufacturer of traditional Chinese medicines including lianhua gingwen – a herbal medicine that is very popular in China – used against covid, among many other conditions, exceeded 10,000 million yuan ( US$1.6 billion), almost double the figure in 2019 pre-pandemic. Amid the recent COVID outbreaks in China in March and April, Yiling’s market capitalization surpassed $11 billion. It has since fallen but is still three times higher than before the pandemic. Beijing Tongrentang, another big manufacturer, has doubled in value since the start of 2020, also reaching $11 billion. Both companies have outperformed Pfizer and AstraZeneca, two Western producers of indisputably effective anti-Covid 19 vaccines.
President Xi Jinping is a powerful advocate for these signatures. His government has praised the “positive impact on the progress of human civilization” of traditional Chinese medicine. Between 2012 and 2019, the share of alternative treatments in the sale of medicines in China increased from 31% to 40%. The figure is probably higher today given its widespread use against covid. Facing Hong Kong outbreaks this year, one million packets of lianhua gingwen were shipped to the territory from the mainland.
Since 2020, China has also promoted the purported benefits of lianhua gingwen in places that have difficulty obtaining Covid vaccines and treatments. Belarus has signed an agreement with China to build a factory to produce traditional Chinese medicines in Minsk.
Regulatory bodies in the United States and Singapore have warned against the use of Ianhua gingwen for the treatment of Covid. That did not discourage investors. In terms of profits, traditional drugmakers have a big advantage: Relying on ancient wisdom saves them billions in research and development costs. Pfizer and AstraZeneca spend roughly a fifth of their revenue on R&D, according to Bloomberg. For Yiling and Beijing Tongrentang the figures are, respectively, 7.8% and 1.2 percent.