Yunnan Baiyao's recent "leak scandal" has caused a huge uproar. Is it malicious defamation by a competitor or an actual leak of secrets?
A single tube of toothpaste is sold for nearly 30 yuan, simply because its composition contains a "state secret formula," thus allowing independent pricing rights. Moreover, many other products from Yunnan Baiyao also carry the label of "state secret formula."
However, a report yesterday pointed out that Yunnan Baiyao's confidential formula is essentially non-existent and has been disclosed in the United States.
This news also greatly shocked Chen Gaolei, a patient from Shaanxi who is currently suing Yunnan Baiyao. Previously, due to the company claiming that the formula was a "state secret formula," it was difficult to provide evidence, causing his lawsuit against Yunnan Baiyao to be in a stalemate. She told reporters from the Securities Daily yesterday that she had already forwarded this news to her lawyer, hoping to gather evidence from it.
The reporter called Wu Wei, the secretary of the board of directors of Yunnan Baiyao yesterday, but his phone call was immediately hung up after being connected, and subsequent calls went unanswered. The reporter then contacted the pharmaceuticals division of Yunnan Baiyao, where a responsible person stated that the company internally was already aware of the aforementioned matter, but he himself did not know if the disclosed ingredients were genuine, as this pertains to a secret. Additionally, he lacked knowledge about overseas registration and suggested the reporter consult the company's lawyer.
The company is already aware of this matter
In 1902, renowned Yunnan doctor Qu Huanchang created Yunnan Baiyao. In 1955, the Qu family donated the "Yunnan Baiyao" secret formula to the Yunnan provincial government. The following year, the State Secrecy Committee listed the prescription and process under state secrecy. Later, the National Pharmaceutical Administration included Yunnan Baiyao's formula and process in the state's top-secret category. In 1988, the Ministry of Health issued a notice regarding issues related to "Yunnan Baiyao," clearly stating: "Ensure the secrecy of 'Yunnan Baiyao,' strictly prohibit disclosure under any pretext, and prevent the misuse of 'Yunnan Baiyao' secret formula processes."
The reporter saw on the official website of Yunnan Baiyao yesterday that the components of Yunnan Baiyao Tincture were marked as a state secret, but this state secret was disclosed on foreign websites.
According to media reports yesterday, this is a document from 2002, which is the FDA (Food and Drug Administration) of the United States rejecting a request from HERBMAX, a distributor of dietary and herbal supplements. From the content, HERBMAX submitted a notification letter to the FDA according to U.S. regulations, wanting to list Yunnan Baiyao Tincture (YunnanBaiyaoDing) as a "dietary supplement." This document lists all the ingredients of "Yunnan Baiyao Tincture" and includes both English and Chinese names. From the ingredient list, the specific components of Yunnan Baiyao Tincture are: Notoginseng, Borneol, San Yu Cao, Bai Niu Dan, Penetrating Dragon, Huai Yam, Ku Liang Jiang, Old Stork Grass, Alcohol.
In addition, the report also pointed out that on the American Amazon shopping website, the ingredients of Yunnan Baiyao capsules and spray are also disclosed.
Huge benefit chains behind the secret formula
Controversies over Yunnan Baiyao's "secret formula" have frequently appeared in the press. Not long ago, a patient claimed that Yunnan Baiyao toothpaste made false claims, causing quite a stir. However, there was already a patient from Shaanxi, Chen Gaolei, who sued Yunnan Baiyao.
Since Yunnan Baiyao is a state-protected drug with a confidential formula, the difficulty of collecting evidence for Chen Gaolei was significant. Her request to modify the instructions was closely related to disclosing the formula. Yunnan Baiyao's legal representatives repeatedly emphasized their position: no apology, no modification of the instructions, only offering humanitarian compensation.
According to available data, the protection forms of traditional Chinese medicine research results in our country mainly include: state confidentiality protection, trademark protection, traditional Chinese medicine variety protection, patent protection, trade secret protection, geographical indication product protection, and new drug protection. Confidentiality levels are divided into: top-secret level (permanent confidentiality), secret level (general confidentiality period is no less than 20 years), and confidential level (general confidentiality period is no less than 5 years).
Top-secret level protection refers to China's unique projects, where once leaked, it would cause serious harm and major losses to the country. It is divided into two types: top-secret level Chinese medicine preparations, among which Yunnan Baiyao is one.
However, industry experts point out that companies producing state-confidential drugs have advantages such as independent pricing rights and patent protection. Therefore, state-confidential drugs, especially those that can enjoy permanent confidentiality like top-secret level drugs, are highly coveted by many pharmaceutical companies. But what happens when disputes arise? How can patients' rights be protected?
Yesterday, a lawyer told the Securities Daily reporter: "Intellectual property is protected, but it also has regional characteristics. According to U.S. regulations, disclosure in the U.S. is permissible, but not domestically. In cases like the above litigation, the court can be asked to retrieve the information, but a complex approval procedure must be followed."
Is it malicious competition or a leak of secrets?
However, some analysts expressed differing opinions on this matter, believing it to be malicious defamation by competitors. The analyst said that these disclosed parts are only a portion of Yunnan Baiyao's ingredients and do not fully encompass them. He knew of one ingredient but it was not mentioned in the aforementioned report.
In his view, the partial disclosure of ingredients does not equate to a leak of secrets. In fact, Pien Tze Huang, which belongs to the same confidentiality level as Yunnan Baiyao, has more openly disclosed ingredients. Its instructions clearly list four out of eight key ingredients: Musk 3%, Buffalo Gallstone 5%, Notoginseng 85%, Snake Bile 7%. But disclosing the components does not affect its protection under confidentiality laws.
The analyst even believed that this incident is a continuation of the "function scandal" involving Yunnan toothpaste in July this year. Currently, in the toothpaste market, Yunnan toothpaste, as one of the few remaining national brands, holds a place in the high-end segment of the toothpaste industry.
Analysts from SGS, the world's largest inspection and certification organization, said that introducing traditional Chinese medicine as health supplements in the U.S. indeed requires the disclosure of key ingredients and content, as well as the manufacturing process, but only involves some SOPs (Standard Operating Procedures), not very detailed manufacturing methods.
A registration analyst from Wannian Pharmaceuticals, the largest domestic original drug R&D institution, told reporters: "If Yunnan Baiyao wants to enter the U.S. market, it must pass the FDA's approval in the U.S. Domestic confidentiality measures are not compatible with other countries globally. However, the development of traditional Chinese medicine is extremely complex. Even if you know the components and dosage, without knowing the medicinal guide and manufacturing process, it is very difficult to replicate."
An experienced professional in the pharmaceutical industry even joked: "It's like Coca-Cola in the U.S., they haven't applied for patents, but for over a hundred years, no one has been able to crack it."