Traditional Chinese Medicine has gone modern, with Eu Yan Sang leading the revolution of this ancient practice. Suzy Bibko examines why this is a bitter pill for some to swallow.
Suzy Bibko is Editor of Families in Business.
Traditional Chinese Medicine. The words conjure up images worthy of a scene in a Harry Potter movie: dark and dusty shops, filled with strange herbs, bizarre creatures and gnarly roots – with an equally gnarled old man behind the counter. But those images couldn't be further from reality. True, it may have its roots in the past, but Traditional Chinese Medicine has gone modern.
Eu Yan Sang, the leader in the Traditional Chinese Medicine (TCM) industry, has been at the forefront of this modernisation movement. Founded over 125 years ago, Eu Yan Sang has seen the industry evolve and has often been the one pushing for those changes. Started as a service by Eu Kwong Pai to help opium-addicted tin mine coolies in Malaysia, Eu Yan Sang (Yan Sang means Caring for Mankind) is now the largest TCM manufacturer and retailer in Hong Kong, Singapore and Malaysia.
Today, Eu Yan Sang is run by four fourth-generation cousins after buying back the company from a third party in 1993 and 1996. The past 10 years have been a whirlwind of research, development and expansion both in the east and the west. Richard Eu, Eu Yan Sang CEO, says that back in the 1980s, TCM was regarded as a sunset industy – but he knew better: "I thought there was a rising trend in the west of an interest in natural medicines and therapies. In the US, TCM is part of the Complementary and Alternative Medicines (CAM) industry. I thought there was a role that we could play. Chinese medicine is one of the best documented of the CAM therapies and is probably one of the oldest medical systems. But we needed to raise the standards to match conventional medicine to gain the confidence of both the consumers and the western medical fraternity to be able to accept us."
Indeed, western doctors are a large and powerful body, who can close rank on issues affecting their practices, whether it be caps on tort verdicts or advocating prescription drugs only to their patients. Not an easy pill to swallow if you're trying to promote an alternative form of medicine. Eu, however, says that more and more doctors are accepting of TCM: "They see the problem and those who are more open minded are okay with it. Some say, 'Give me the evidence, show me the clinical trials' (as with prescription drugs). And you end up trying to measure apples with an orange scale because the two systems are very different."
So, to raise the standards of TCM and also mesh a bit more with western ways, Eu Yan Sang has been heavily involved in research and development of its own medicines, testing them under their own stringent standards (in the US, TCM falls under a law for dietary supplements for which you don't need registration and approval by the Federal Drug Administration). "For the last ten years, we've been making sure that firstly, the herbs are properly identified, because you can have adverse reactions if the wrong herbs are used or the herbs are wrongly named," explains Eu. To this end, Eu Yan Sang has established its own in-house fingerprinting centre and chemical laboratory. "Then we process the herbs in such a way to ensure that they are safe. So, most of our manufacturing capabilities have been upgraded over the years."
These upgrades to their internal systems means that Eu Yan Sang has the best factories in the industry, allowing them to be integrated from the point of processing raw materials to the finished product. Eu points out, however, that more is involved than just herb identification and manufacturing: "We have to make sure these things work; we must check their efficacy, which is done through clinical studies and trials. We work with universities, as we don't have a big research department [on site]." This is especially true for new products that Eu Yan Sang develops, like those currently in the works for menopause symptoms and for the lung scarring experienced by SARS sufferers. These scientific validations help address consumer concerns about quality assurance and standardisation of TCM. The company's two factories in Hong Kong and Malaysia are also fully GMP (Goods Manufacturing Practice) certified. The former has attained the TGA's (Therapeutic Good Administration) Australia GMP standards, reinforcing their commitment to stringent quality control and uniform procedures (in Australia, all vitamins, herbal products, and some essential oils are classified as therapeutic goods, along with ethical pharmaceutical products. These products must all be made to a similar standard of manufacture, in compliance with the Australian Code of GMP for Medicinal Products. They must also be registered on the Australian Register of Therapeutic Goods prior to sale on the Australian market. The manufacturing site and systems must be approved by the TGA prior to registration, which often requires a visit from a TGA auditor).
Eu Yan Sang currently offers more than 250 products under the Eu Yan Sang brand, as well as over 1,000 different types of Chinese herbs and other medicinal products. These items are sold through an extensive distribution network comprising over 100 retail outlets in Hong Kong, Malaysia and Singapore. Eu Yan Sang products are available in over 17,000 drugstores, pharmacies, medical halls, hospitals, supermarkets, chain stores, health clubs, spas and convenience stores.
In addition, the company operates a chain of 16 TCM clinics in Singapore and Malaysia, and four Integrative Medicine Centres (IMC) in Australia. The IMCs are something new for Eu Yan Sang. "It's still a work in progress," admits Eu. "We see our role in being able to complement other medical systems. This is what we call integrative medicine or healthcare, where we try to use different medical systems to treat disease. Sometimes it's at different points during the course of the patient's illness. But first, we try and prevent disease. That's what Chinese medicine is good at. But if you do suffer from something, then we're also good at the rehabilitative stage. And these are two areas where conventional medicine is not so effective. Rather, conventional medicine targets a particular symptom and tries to fix it. It's reactive. [The preventative and rehabilitative areas] are where we can play a very important role. So, we try and work together [with conventional medicine] on this."
This integration between eastern and western medicine is providing consumers with a more holistic approach to healthcare. As the east and west differ not just in the types of medicine dispensed but also in how it is dispensed, Eu Yan Sang has had to come up with a new retail concept as well. In the east, TCM is sold through Chinese medical halls, which are bit like apothecaries. It's a hard model to export to the west, as consumers are usually overwhelmed by the products available and do not know what to ask for. So, in the vein of its continual modernisation efforts, Eu Yan Sang has come up with a retail concept based on a wellness point of veiw, rather than a medicinal one.
"We are looking at five main conditions: stress, detox, weight, skincare and vitality," explains Eu. "These five conditions are treated at a big centre that has four elements: a restaurant; a retail offering where we have both health supplements and personal care products; a consultancy where practitioners can give advice to customers as to what are the proper foods to eat and supplements to take; and an activities area where customers can do yoga and so on." This holistic wellness centre opened in Janaury 2007 in Singapore and is called Red, White and Pure (red for passion, white for being calm and pure for integrity). If it succeeds, Eu Yan Sang hopes to export this retail model to other locales.
This sounds like a new, refreshing concept in alternative medicine – something different from the usual vitamin/ supplement shops that only push products. But it's just the tip of the TCM iceberg, according to Eu. "You have the ageing population, the baby boomers who don't want to get old, and they need us. We also have other issues, such as
environmental problems, stress and the like, and they are causing a lot of medical conditions to emerge. Conventional medicine by itself is not necessarily the answer. There's a huge market for us. The CAM market in the US is something like $30 billion already. It's huge."
The market is indeed huge, and growing worldwide. The Chinese Association of Traditional Chinese Medicine asserts that China has exported TCM to 164 countries and regions around the world in 2005, with export earnings reaching an all-time high of $830 million (a 14.55% increase over 2004). Most of these earnings, however, came from the export of low value-added extracted herbal substances and raw materials. Thus, China recognises that it "should intensify efforts to develop and export more high value-added patent medicine", according to the Chinese government, theoretically not only to boost earnings, but also to meet demand by the ever-growing group of consumers. Indeed, the figures surrounding TCM and its devotees are staggering, if recent figures from China's People's Daily can be believed:
This last item, above, is interesting, because it essentially is looking to legally codify what Eu Yan Sang has been doing for the past 10 years. If the company keeps moving in the same direction, the future of TCM will no longer be an "ancient Chinese secret" to the west, but medicine in its most modern incarnation, integrating both traditional and conventional approaches. As Confucius said, "Study the past if you would define the future." It's highly unlikely he was speaking about the future of the ancient practice of TCM when he uttered those words – but then again, maybe he was. I've heard that ginkgo biloba has amazing effects on the brain.