The sun is scorching every corner of China with summer heat at the moment, yet a Traditional Chinese Medicine (TCM) product called Pien Tze Huang (PTH) has sparked even more heated discussion across Chinese media. Sold at 590 yuan (about $90) for just one 3-gram pill, with customers craving more, PTH is the unabashed hottest star in the Chinese pharmaceutical market for the first half of this year. In this piece we zoom in on the tiny magic pill to find out what power is contained therein and what is behind the frenzy.
Surging: Rocketing Share Price and a Seller’s Market
Enjoying a century-old reputation in Fujian province and some other Southern Chinese provinces (with history dating back as far as the 1500s), the name of the medicine “Pien Tze Huang” in Southern Fujian dialect literally translates as “one pill to remove all the toxins”. Still, PTH did not make it as a household name in China until the 21st century — ever since then, the brand has been growing rapidly. According to annual reports at its official website, the compound annual growth rate of PTH from 2015 to 2019 hit 31%. In August 2020, the company’s market value exceeded that of the Yunnan Baiyao’s, with the latter remaining the leading enterprise in the TCM market for years. During the first half of 2021, PTH ranks sixth among the fastest-expanding Chinese companies in terms of market value (first in the pharmaceutical sector), which has reached over 260 billion yuan as of now, almost 50 times the amount during its 2003 IPO.
The surge in revenue and share price of PTH was spurred by its constantly increasing retail price. It is estimated that there have been nine rises in the domestic retail price of PTH between 2004 and 2020, from the original 325 yuan per pill to 590, representing a growth rate of 81%. The price hikes proved to be effective in raising the company’s profits and the market also reacted immediately with increasing demand — the most recent rise came at the beginning of 2020, in which PTH’s retail price was raised from 530 yuan per pill to 590. One salesclerk at a local pharmacy chain Ren Xin Hong in Xiamen, Fujian, told Pandaily that the product has been out of stock since the end of 2020. “Our company could not grant any purchases from PTH since the end of last year,” she said, adding that “there is no exact date of refill.”
Multiple media sources have demonstrated that the shortage was a national phenomenon with most retail stores nationwide either declining purchasing appointments or scheduling registrations for August (the purchases were mostly restricted to two pills at a time). Online, Pandaily also noticed that the PTH flagship store on Taobao had run out of stock, while self-owned stores on JD, another national e-commerce platform, all priced PTH at over 1500 yuan per pill. It seems that the whole market has been swept into the enthusiasm for the magic pill. But why? Before probing into the factors behind, we need to know exactly what PTH is and how it functions.
Inside the Magic Pill: Demystifying PTH
The instructions on the exterior packaging of PTH reads “Made from four Chinese medicinal materials (i.e. calculus bovis, musk, snake gall and pseudo-ginseng), Pien Tze Huang is oval-shaped and brownish-yellow on the surface. It can relieve the body’s internal heat, remove toxins, cool the blood, resolve blood stasis and reduce swelling and pain. With these functions, PTH is mainly used for acute and chronic viral hepatitis, swelling, bruises and inflammatory diseases.”
Zhang, a researcher from Shanghai University of Traditional Chinese Medicine told Pandaily that PTH, with its core effect of “toxins removal,” has regional roots in ancient China. Throughout history, a widely circulated saying had it that “all diseases in the South are caused by miasma (南方凡病，皆谓之瘴).” Miasma refers to the toxic air generated from the decay of plants and animals in the Southern forests. It can also refer to the infectious diseases spread by mosquitos in subtropical areas. PTH originated out of the need in Fujian province to cure various miasma-related diseases and was later carried further away with Fujian merchants who sailed overseas to Southeast Asia for business.
Today, the uses of PTH in treating liver diseases have been recognized by Chinese government bodies and institutions, earning itself multiple impressive titles such as “first-class protected TCM,” “State-Level Non-Material Cultural Heritage” and “top security formula.”
According to one ardent fan who has consumed PTH for over ten years, the medicine is effective in removing harmful substances from the human body. “I’ll eat it for two days after drinking excessively,” he said, “or just for the detoxifying routine.”
In response to popular “myths” surrounding the effects of PTH, Zhang expressed her views. “Clinical tests do manifest that PTH has an effect in lightening the inflammation of hepatocytes,” she commented. “But you don’t eat it without having the diseases. Also, PTH is not included in Medicare and you can actually find cheaper substitutes of similar curative effects.”
Behind the Hype: The Contributing Conditions
The recent sensation about PTH is most likely to be a wave of hype capitalizing on the interplay of multiple forces, including public policies, the medical market and the branding strategies of PTH’s parent company, namely Zhangzhou Pien Tze Huang Pharmaceutical Co., Ltd.
This February, the national State Council published a series of policies dedicated to accelerating the development of TCM, indicating the determination of regulators to extend the application of Chinese medicinal practices in the wake of the COVID-19 pandemic. Moreover, growing concern regarding chronic diseases and sub-health, the country’s ageing society and the explosive investment flooding into the domestic innovative medical market in recent years have all played their part in boosting demand for PTH. The Zhangzhou PTH Pharmaceutical Co., in turn, enhanced its position during this hype simply by raising prices. Backing the practice are the brand’s long established reputation, its control over the previous raw materials, and of course, the secret formula of PTH — the company’s unparalleled advantage. Together, these factors constitute a formidable moat surrounding the brand, allowing the tiny pill to dominate the TCM market in 2021.
Striving to diversify product lines and expand the sales channel, PTH is making further moves to strengthen its current leading position in the TCM industry. The market expects the possibility of another price hike — perhaps the peak is yet to be seen.