The soccer career of Argentine superstar Lionel Andrés Messi almost ended before it began. As a child, he was diagnosed with a growth hormone deficiency, and his family couldn’t afford the treatment. Eventually, a club agreed to pay his medical bills. Now 5-foot-7, Messi is widely considered the best player in the world.

That anecdote is widely told in the growth hormone industry. After Xia Dongdong was told the story by a doctor, he decided to treat his 8-year-old son Qianqian with synthetic human growth hormone (HGH). At the age of 5, Qianqian was only 37 inches tall and was often mistaken for a 3-year-old.

Growth hormone deficiency (GHD), also known as dwarfism, is a condition caused by damage to the pituitary gland, a part of the brain that produces growth hormone. The substance influences how tall a person grows and helps build bones and muscles. Children with GHD are abnormally short and can also develop serious health problems.

Injections of synthetic HGH are commonly used to treat GHD in children and adults. The medicine is produced by recombinant DNA technology in which human genes are inserted into E. coli bacteria so that they produce large amounts of protein that is identical to the growth hormone produced by the human body.

Today in China, HGH treatment for children is in high demand, even when there is no medical abnormality. This has enabled the expansion of domestic HGH producers while prompting global pharmaceutical giants to rush to the lucrative market.

Amid the booming HGH industry, overprescription of HGH to children encouraged by drugmakers has gained increasing attention from the market and regulators. Some studies have also linked growth hormone treatment to serious adverse health effects years later.

Reflecting better nutrition and living conditions, the height of Chinese children has increased significantly, and the incidence of GHD has dramatically declined during the past four decades. A study published in The Lancet medical journal in 2020 shows the Chinese population getting taller with the average height of Chinese males recording the biggest rise in the world between 1985 and 2019. The gain for women ranked third in the world.

But for many parents, this is not good news. To prevent their children from being shorter than their peers or simply seeking a specific height, some parents try to take extraordinary measures. Their first stop is to see an endocrinologist for HGH therapy to help their children grow taller.

The endocrinology department is one of the busiest departments at Shenzhen Children’s Hospital. Outside each of the seven doctors’ offices are long queues of parents and children holding X-ray images showing bone age. The online appointment system at the department showed that all the endocrinologists were fully booked for the entire next week. Similar scenes take place almost every day in hospitals across the country.

Many parents seek HGH therapy for their children even though they are not short for their age but simply because the parents want them to grow to a specific height, doctors said.

According to the “Guide to the Diagnosis and Treatment of Children With Endocrine Disorders” written by pediatric endocrinology experts of Chinese Medical Association, a child whose height is more than two standard deviations below the average for a given age and sex, or less than that of the third percentile for such a group, is considered to have short stature. In other words, out of 100 children of the same gender born under the same conditions, the shortest three children would be defined as having dwarfism.

Hormones for short but healthy children

Even for children who fall into that category, not all are suitable for HGH treatment. Dwarfism can either be due to growth hormone deficiency or just be short stature with no known endocrine of metabolic cause, known as idiopathic short stature (ISS). HGH therapy is an effective treatment for patients suffering from GHD. But for children with ISS, the therapy remains controversial even though it was approved by the U.S. Food and Drug Administration and endorsed by the Chinese Medical Association.

Among the 1,500 children with short stature treated by the Children’s Hospital of Fudan University in Shanghai in 2012, 44% were diagnosed as GHD and 34% as ISS. Similar data were found in other Chinese hospitals.

Even though ISS patients account for a smaller proportion, they are seen by HGH makers as offering with great potential for sales expansion as ISS is relatively easy to diagnose. ISS is normally diagnosed by a pediatric endocrinologist after a series of blood and radiology tests rule out various medical conditions that are known to affect height.

The controversy is whether the approval of growth hormone therapy for ISS is an expansion of its use on short, otherwise healthy children. In an article published in 2017, David B. Allen, a professor at the University of Wisconsin School of Medicine and Public Health, criticized the embrace of “HGH for height”—increasing the height of children who are short for reasons other than growth hormone deficiency—as cosmetic endocrinology arising from “deep-seated assumptions” that being short is a disability.

Opponents of the expansion of medical growth hormone therapy beyond the treatment of disease or serious disability say that using it to reduce disadvantage or even provide an advantage to healthy people is similar to cosmetic surgery.

“Nutrition and exercise are the most important things for growth, and normal kids don’t need this medicine at all,” said an expert participating in the revision of the guideline on HGH clinical application by the Chinese Medical Association.

An era of HGH therapeutic expansion was spearheaded by industry and facilitated by pediatric endocrinologists, Allen wrote.

According to guidelines issued by the American Academy of Pediatric Endocrinology, children with severe growth hormone deficiency can benefit from HGH treatment to the extent that the benefits clearly outweigh any potential harm from treatment. But for children with ISS, the benefits of growth hormone therapy are lower and more uncertain. Thus, even small or low-probability potential harm becomes an important consideration, the guidelines say.

In the U.S., the Food and Drug Administration approved the first HGH product developed by Genentech in 1985. China’s growth hormone market started about a decade later. China approved the first domestically developed HGH product, Jintropin made by GeneScience Pharmaceuticals, in 1998. But the growth hormone market in China is surging ahead while the U.S. market is slowing.

China’s GHD treatment market tripled to $600 million from 2014 to 2018, according to Frost & Sullivan. The market is expected to explode in $3.2 billion by 2030, representing annual growth of 16% from 2018 to 2030, far exceeding the 6% estimated growth globally, the market research firm said.

China’s hormone market is dominated by GeneScience and Anhui Anke Biotechnology (Group) Co. Ltd. (300009.SZ). GeneScience has the biggest share of the liquid growth hormone segment, selling an easy-to-use injection pen that costs 55,000 yuan ($8,600) to 150,000 yuan a year. Anke has the advantage in freeze-dried powder injections, a cheaper option at about 20,000 yuan a year.

GeneScience, with 76% of the market in 2020, contributed about 76% of revenue and 97% of profit to its parent Changchun High & New Technology Industry Group Inc. (000661.SZ) in the first half of 2021. The parent reported a profit of 1.9 billion yuan in the period.

Anke reported 969 million yuan of revenue in the first half of 2021, up 36% from a year ago.

The entire industry can add 300,000 new patients a year, representing a 75% rate of expansion, Pacific Securities estimated in a report earlier this year. At an average of 97,000 yuan of expenses per patient over 16 months, the market is expected to reach 29.1 billion yuan per year, the report said.

Another report issued in August by Sinolink Securities projected even faster growth. Based on assumptions that patients use growth hormone for a longer period and China’s shift to the three-child policy, Sinolink estimated the market could reach 67.6 billion yuan.

Unlike China’s market, which mainly targets children, adult usage accounts for a bigger proportion of sales in the overseas market. About 75% of growth hormone patients are more than 20 years old, according to research published on the Journal of the American Medical Association. The data suggests that China has huge potential for expanding HGH sales to the adult market.

The European and U.S. markets are gradually becoming saturated and slowing. For large multinational pharmaceutical companies, the underdeveloped and rapidly growing Chinese market is the next target.

Last year, Danish pharmaceutical giant Novo Nordisk signed up a subsidiary of state-owned CR Pharmaceutical to sell its growth hormone therapy Norditropin in mainland China. Norditropin is the only imported liquid injection in China.

A few international players, including Shanghai United Sai’er Biology Engineering Co. Ltd., a unit of the Philippines’ largest pharmaceutical company Unilab, and South Korean conglomerate LG Corp., split the remaining small market share.

Domestic drug companies have a significant advantage in the children’s growth hormone market over international rivals, not only because of cheaper prices but also because of their unique sales model.

Global pharmaceutical companies mostly focus on marketing to public hospitals, a model that is out of line with demand in China, a person close to GeneScience told Caixin.

Compared with other medicines, growth hormone has more consumption attributes and has “anxiety needs” other than pathological needs, said Lin Sibo, chairman of Wanling Assets, a private equity investment firm specializing in the health-care sector.

In 2014, Ye Yiyan, a retired professor of pediatrics at Xiangya Hospital of Central South University, exposed overprescription of growth hormone to children at Changsha Beno Hospital, where he was a co-founder. Representatives of pharmaceutical companies tried to manipulate doctors to prescribe growth hormone indiscriminately, including a “lifetime commission” to doctors who first prescribe growth hormone to a child for the child’s lifetime treatment.

GeneScience and its parent company collectively control a 52% stake in Changsha Beno Hospital. After Ye exposed the insider abuse, the hospital fired him, Ye said.

Since then, GeneScience has developed a sales model targeting smaller private hospitals. In 2015, GeneScience signed a cooperation agreement with Jinan Xiehe Hospital. The company leased part of the hospital’s offices and pharmacy to promote its HGH products. The company paid the hospital 360,000 yuan a year to use part of the doctor offices and pharmacy to promote its HGH products, according to a verdict in a civil lawsuit.

GeneScience’s parent said in May that less than 30% of HGH medicine is sold through public hospitals, while more than 70% are sold through “collaborative” private hospitals. The company said it expects the private hospital sales to expand further in the future.

Anke said more than 90% of patients pay for growth hormone therapy out of their own pockets rather than through medical insurance.

Public hospitals have stricter rules on drug prescriptions and usually restrict doctors from prescribing drugs in bulk for long-term use. Growth hormone therapy usually takes a long term and requires daily injections. So private hospitals working with drug companies can better meet patients’ needs, the person close to GeneScience said.

A parent of a dwarfism patient in Chengdu said sales representatives at the doctor’s office would demonstrate to parents how to use the injection pen and would keep in contact with the patient’s family through social media to follow the growth of children.

The phrase “patient management” appeared in Changchun High & New Tech ‘s 2021 first half report, saying GeneScience “improves patient satisfaction and strengthens patient management through continuous service and whole-process management, continuously develops new patients, increases market development, expands product coverage and effectively improves the company’s business performance.” Patient management should be the responsibility of hospitals and doctors, not pharmaceutical companies, some industry participants said.

This sales model is costly. In the first half of 2021, Anke’s sales expenses accounted for nearly 40% of revenue, while the number was about 30% at Changchun High & New Tech.

Currently growth hormone medicines are not included in China’s drug bulk-buying program, an initiative launched in 2018 to lower medicine prices. Under the centralized drug procurement program, global and domestic drug companies dispatch representatives to Shanghai twice a year to bid for contracts to supply a wide array of commonly used medicines that treat everything from infections and hypertension to diabetics and dementia. Companies that have won a supply contract are responsible for delivering a promised quantity at an agreed price.

On Sept. 30, Guangdong province issued a proposed list of drugs included the provincial bulk-purchasing program. Liquid and freeze-dried powder growth hormone medicines are both on the list. If the proposed list is approved and launched nationwide, not only will Chinese drug companies’ profits will be squeezed, but also the current sales model will face challenges, the industry participant said.

In the promotion of growth hormone sales, doctors’ diagnoses are the key. One commonly used but controversial diagnosis method in determining dwarfism is bone-age study. It is defined by the age expressed in years that corresponds to the level of maturation of bones. It's usually done by taking an X-ray of a child’s hand and wrist.

At present, the primary problems in the evaluation of the bone age of children and adolescents are strong subjectivity and large random errors, Kong Qianqian from the School of Medicine at Shandong University wrote in an article. To achieve accurate diagnoses, doctors need to have years of experience, but an endocrinologist at a big hospital in Beijing told Caixin many young doctors don’t know how to read bone-age X-ray images.

Meanwhile, growth hormone producers are targeting smaller hospitals in third-tier cities, where diagnosis capacity is even weaker. A study of nearly 3,000 pediatric growth doctors in China by the Chinese Medical Association showed that just 4% have more than 25 years of pediatric endocrinology experience, but 82% of doctors have prescribed growth hormone treatment to children, and less than 20% have received pediatric endocrinology training.

Lack of professional pediatric endocrinologists has in turn provided opportunities for pharmaceutical companies to penetrate the medical service field, such as directly participating in patient management or providing training on growth hormone products.

Instead, pediatric doctors should educate the public on reasonable height thresholds and children’s growth curves, experts said. Average height cannot be used an acceptable benchmark because 50% of children will always judged as below an ideal height, Li Hui, researcher at Capital Institute of Pediatrics wrote in an article.

Understanding the long-term trends and characteristics of human growth and development and ensuring every child’s healthy growth in a good living and nutritional environment is the responsibility of every pediatric doctor and parent, but not blind pursuit of some "ideal" height, Li wrote.

At the request of the interviewees, the names of parents and children are all aliases.

Zhang Jinning contributed to this report.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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