Qi Zheng Tibetan Medicine’s Lei Jufang Breaks the Impasse on Itching from Herbal Medicines

　　Two Sessions Proposals and Suggestions for Protecting Tibetan Medicine

　　Qi Zheng Tibetan Medicine’s Lei Jufang Breaks the Impasse on Itching from Herbal Medicines

　　Unadorned and dressed modestly, with a serene demeanor—this is the first impression left by Lei Jufang, a female billionaire in China’s pharmaceutical industry, a member of the National Committee of the Chinese People's Political Consultative Conference, and Chairwoman of Qizheng Tibetan Medicine (002287.SZ).

　　On March 2, just ahead of the upcoming Two Sessions of the National People's Congress, Lei Jufang accepted an exclusive interview with a reporter from Times Weekly at Qizheng Tibetan Medicine’s headquarters and within the premises of the China Tibetology Research Center in Beijing. This female pharmaceutical entrepreneur has submitted proposals—including one calling for the establishment of a protected zone for Tibetan medicinal plant resources—to the Fourth Session of the 12th National Committee of the Chinese People's Political Consultative Conference.

　　A reporter from Times Weekly noted that Qizheng Tibetan Medicine primarily engages in the research and development, production, and sales of new Tibetan medicines. The content of Lei Jufang’s recent proposal is closely related to Qizheng Tibetan Medicine’s core business.

　　As a female entrepreneur who has been working in the Tibetan medicine sector for over 30 years, Lei Jufang single-handedly founded Qizheng Tibetan Medicine Company and led it into the capital market. Publicly available information shows that Lei Jufang is currently the actual controller of Qizheng Tibetan Medicine. As of the third-quarter report for 2015, she held 66.15% of the listed company’s equity, giving her absolute control.

　　How should Tibetan medicinal resources be protected? How should a standardized system for Tibetan medicine be established? What is the future vision for Qizheng Tibetan Medicine? During the three-hour-long interview, Lei Jufang patiently and eloquently addressed the media’s concerns.

　　The pharmaceutical business has not yet been spun off.

　　After years of industrial development, Tibet’s Tibetan medicine system has been largely established. Currently, there are 21 modern Tibetan medicine manufacturing enterprises, and in 2015, the annual output value of Tibetan medicine enterprises reached 1.45 billion yuan.

　　On January 22 of this year, Qizheng Tibetan Medicine released its preliminary report on 2015 performance. During the reporting period, the company achieved revenues of 996 million yuan, an increase of 4.83% over the same period last year; operating profit reached 272 million yuan, up 16.72% from the same period last year; and net profit attributable to shareholders of the listed company amounted to 265 million yuan, representing a growth of 11.50% over the same period last year. At the end of the reporting period, the company’s total assets stood at 2.074 billion yuan, an increase of 15.75% compared to the same period last year.

　　It seems that Qizheng Tibetan Medicine can be considered the leading enterprise in China’s Tibetan medicine sector. Feng Ping, Vice President and Secretary of the Board of Qizheng Tibetan Medicine, told a reporter from Times Weekly that over the next 10 to 20 years, the company will focus more on promoting blockbuster products and scaling up its operations. Currently, Qizheng Tibetan Medicine has a pipeline of 74 product varieties in the market, and in the coming years, it will gradually launch several new products.

　　A reporter from Times Weekly noted that Qizheng Tibetan Medicine is a company whose core business involves the research, development, production, and sale of Tibetan medicines. Its key products include topical pain-relief medications and oral medications, among others.

　　On January 11 of this year, Qizheng Tibetan Medicine announced publicly that, in order to reduce the impact of loss-making businesses on the company’s overall operating performance and to concentrate resources on its core pharmaceutical business, thereby further enhancing the company’s profitability, Qizheng Tibetan Medicine plans to divest its herbal medicine business in its entirety. The scope of this divestiture includes the company’s subsidiaries, Longxi Qizheng Herbal Medicine Co., Ltd. and Tibet Naqu Zhengjian Cordyceps Sinensis Biotechnology Co., Ltd.

　　On March 2, Lei Jufang, Chairwoman of Qizheng Tibetan Medicine, told a reporter from Times Weekly: “Let me correct that—the medicinal herb business has not yet been spun off.” Feng Ping also stated, “Currently, we’re still in the process of assessing the assets.” According to what we’ve learned, the company is conducting audits and evaluations as part of the ongoing process of spinning off its medicinal herb business.

　　Previously, some investors questioned: “A pharmaceutical manufacturer is planning to divest its entire upstream herbal medicine business—such a move leaves many people puzzled.”

　　In response, Qizheng Tibetan Medicine told a reporter from Times Weekly that currently, the company’s herbal medicine business does not serve as a supplier of raw materials for its core pharmaceutical products. Instead, it primarily engages in the trade of local Gansu-produced herbs such as Codonopsis pilosula, Angelica sinensis, and Astragalus membranaceus. However, the company’s operating performance has remained persistently sluggish over the past two years.

　　A reporter from Times Weekly reviewed Qizheng Tibetan Medicine’s financial report and found that in the first half of 2015, the company achieved revenues of 451 million yuan, representing a year-on-year increase of 14.99%. Among these, the traditional Chinese medicine materials business generated revenues of 38.9438 million yuan, a slight year-on-year decrease of 2.89%.

　　Looking at the sub-sectors, the Chinese medicinal materials business accounts for only 8.64% of Qizheng Tibetan Medicine’s main revenue. In comparison, other core businesses—such as the revenue from plaster and ointment products within the pharmaceutical segment—account for 79.84% and 9.90% of total revenue, respectively.

　　Qizheng Tibetan Medicine stated that the company’s business model for medicinal herbs is still under exploration, but its efforts to protect Tibetan herbal resources have never ceased.

　　Proposing the Protection and Standardization of Tibetan Medicine

　　A reporter from Times Weekly learned that Lei Jufang has submitted two proposals related to Tibetan medicine to the 2016 National Two Sessions—namely, “Proposal on Establishing a Protection Zone for Tibetan Medicine Resources” and “Proposal on Vigorously Strengthening the Development of Quality Standards for Tibetan Medicine.”

　　According to a survey conducted by Lei Jufang’s team, the Tibet region currently boasts 2,436 Tibetan medicinal resources, including 2,172 plant species, 214 animal species, and 50 mineral species. However, due to limitations in technological means and market conditions, these resource advantages have not been fully exploited.

　　Lei Jufang suggested establishing a Tibetan medicinal resource conservation area centered on Tibet, and including it as a key project in the nation’s 13th Five-Year Plan for ecological protection and restoration.

　　Meanwhile, Lei Jufang also suggested strengthening the development of quality standards for Tibetan medicine. According to the proposal, although more than 200 Tibetan medicinal preparations have already been incorporated into national standards in China’s Tibetan medicine industry, significant issues remain with Tibetan medicine standards. The quality standards for Tibetan medicinal materials and finished formulations have seriously hampered the modernization of Tibetan medicine and are impeding its development as a pillar industry.

　　The main outstanding issue is the inconsistency in the sources of raw medicinal materials. The phenomenon of multiple names for the same substance, identical substances with different names, and regional variations in medicinal practices has become particularly pronounced. Additionally, there are still unresolved issues such as translation errors in the names of medicinal materials, their indications and main therapeutic uses, and dosage instructions. Furthermore, in formulated prescriptions, problems like duplicate or missing ingredients and non-standardized naming of medicinal materials remain fundamentally unaddressed.

　　In response, Lei Jufang suggested accelerating the development of “two standards and one specification.” The two standards refer to the standards for raw medicinal materials and Tibetan finished medicines, while the one specification refers to the standard for the processing and preparation of medicinal materials.

　　Lei Jufang stated that it is necessary to conduct resource identification, standardize nomenclature, carry out experimental research, draft standards, and finalize standards for the raw medicinal materials involved in certain criteria. We should as soon as possible develop quality standards for medicinal materials that reflect the unique characteristics of Tibetan medicine. At the same time, she recommended that the National Pharmacopoeia Committee promote major innovative measures for revising these standards and promptly publish the completed quality standard results.

　　De-luxurization of health supplements

　　In recent years, domestic pharmaceutical companies have been increasingly shifting toward the greater health industry. Last year, Qizheng Tibetan Medicine also revealed that the company plans to launch new products in the greater health sector, including health supplements and branded medicinal herbs.

　　Now that half a year has passed, how is Qizheng Tibetan Medicine faring in its big-health sector strategy? In Lei Jufang’s view, Chinese medicinal herb-based health supplements represent an important segment of the big-health industry. “I believe Tibet is uniquely positioned to launch products that are pure, safe, premium-quality, and eco-friendly.”

　　Highly prized Chinese medicinal herbs and health supplements have been mired in controversy in recent years. For instance, Cordyceps sinensis, often referred to as the "divine herb," has long been regarded by consumers as a quintessential example of premium Chinese herbal medicines and health supplements—and even as a luxury item. As a result, its market prices remain stubbornly high. Yet, there is also considerable debate surrounding the safety and efficacy of Cordyceps sinensis.

　　Lei Jufang told a reporter from Times Weekly that species such as cordyceps, dendrobium, and even ganoderma lucidum have all been among those that Qizheng Tibetan Medicine has been involved in protecting over the years. Ganoderma lucidum from Tibet is exceptionally high-quality, but we shouldn't let its price soar to exorbitant levels.

　　Lei Jufang stated that, in order to protect Tibetan medicinal resources, “we must start working hard now. We hope that through these conservation measures, we’ll be able to offer the public natural, eco-friendly, and healthy Chinese medicinal materials in the market in the future.”

　　Qizheng Tibetan Medicine places great emphasis on the methods and approaches for protecting Tibetan medicine, “taking resource surveys as a prerequisite for the protection and development of Tibetan medicine.”

　　According to the introduction, Qizheng Tibetan Medicine is currently conducting resource surveys primarily on three categories of Tibetan medicinal materials: the first category consists of Tibetan medicinal materials that are the primary raw materials used in the company’s products; the second category focuses on Tibetan medicinal materials with promising development potential; and the third category targets endangered plant resources.

　　According to data released by Qizheng Tibetan Medicine, as of 2013, Qizheng Tibetan Medicine had completed a survey of the status of dozens of key medicinal material resources used by the company and had developed a resource utilization plan.

　　In addition, in response to practical challenges such as unclear origins of Tibetan medicines and complex distribution of medicinal resources, Qizheng Tibetan Medicine has conducted extensive research in recent years on the origins and resources of Tibetan medicinal materials.

　　Qizheng Tibetan Medicine introduces that the company has established a Tibetan medicinal herb specimen collection, which currently holds nearly a thousand specimens. “We have begun building a germplasm resource bank and are strengthening research and conservation efforts for endangered species in order to reduce the risk of species extinction.”

　　Reporting media: Times Weekly

　　Report link: http://www.time-weekly.com/html/20160308/32731_1.html