Pharmaceutical company loses 1b yuan after 140-word Weibo message
A 140-word warning against a popular cold medicine for children on China’s micro-blogging website has cost the manufacturer, Renhe Pharmacy, a billion yuan (HK$1.24 billion) in the value of its shares, the Xinhua state news agency reported this week.
Although authorities later said the allegations made by a mis-informed doctor were false, Renhe said the damage had been irreparable.
A Beijing-based doctor, only identified by his last name as Meng, posted a message on Weibo on Janurary 21 that read: “Youkadan and Haowawa medicine have been proven toxic to children’s livers. Children under one year should absolutely not take it. Children under six should take it with caution.”
He followed his allegations with an appeal: “Why are their advertisements still in the media? Celebrities, please spread the message and have these commercials withdrawn.”
Meng later admitted he had written the post “without adequate fact checking”, said Xinhua.
But his message was quickly re-posted by Wen Zhang, a television star with more than 26 million Weibo followers, the same day.
“Will authorities confirm this and give us instructions,” asked Wen.
Wen also helped to expose the controversy to a wider audience. He received more than 4,000 comments and 22,000 re-posts.
Three days later, one of China’s most well-known comedians, Song Dandan, spoke out on Weibo.
Having appeared in a TV commercial promoting the medicine, Song said in a worried tone she agreed to do the commercial after learning the drug had been approved by authorities.
“I will not appear in any medicine commercial in future,” she said.
Meanwhile, the news was reported by influential Chinese media outlets, including CCTV.
Jiangxi-based Renhe Pharmacy then made several official announcements clearing any doubts and criticisms.
“The medicine is safe for children from age one to 12 and won’t cause harm to livers,” said the announcement. “Children under one should not take it due to the lack of empirical statistics on safety and effectiveness - but not because it harms the liver.”
The provincial Food and Drug Administration in Jiangxi supported Renhe by issuing a statement this week claiming the medicine was safe.
But those efforts failed to save Renhe’s shares from diving. Its stock price fell 2.5 per cent on January 25, 7.14 per cent on January 24, and 2.03 per cent on January 23, Xinhua said.
A spokesman estimated the company's total losses were around one billion yuan, said Xinhua.
"People on Weibo are more passionate about spreading rumours than truth," said a frustrated spokesman. He said many influential Weibo bloggers did a terrible job in following up the controversey.
"You should apologise for spreading the false message, " said one commentator on actor's Wen Zhang's Weibo on Friday, "You owe that to the public and the company."
China's pharmaceutical industry has been stricken with scandals in recent years. The government is combating the production and sale of fake drugs with stricter regulations.