Linking resource supplies and price drivers: Lessons from Traditional Chinese Medicine (TCM) price volatility and change, 2002-2017.

ETHNOPHARMACOLOGICAL RELEVANCE: Worldwide, one of the drivers of substitution and adulteration is the cost of the natural resources (plants, animals, fungi) that are ingredients of traditional medicines. Relatively few studies have been done that link prices of traditional medicine ingredients to what drives changes in price, yet this is an important topic. Theoretically, prices have been widely considered as an economic indicator of resource scarcity. Rare, slow growing medicinal plants sell for high prices and common, less popular species for low prices. Price levels also influence the viability of farming vs. wild harvest (and incentives to overharvest high value species when tenure is weak). Prices can also influence the harvesting or buying behaviour of harvesters, traders or manufacturers. When prices are high, then there is a greater incentive to use cheaper substitute species or adulterants. As previous studies on herbal medicine ingredients have shown, adulteration applies in a wide variety of cases, including to some Traditional Chinese Medicine (TCM) species. AIM OF THE STUDY: The aim of this study was to gain a better understanding of which factors influenced changes in the market prices of document prices for four popular, but very different traditional Chinese medicine (TCM) species (2002 - 2017). MATERIALS AND METHODS: Fluctuations in market prices were followed over a 15-year period (2002-2017) for four very different TCM ingredients: two plant species (one wild harvested for fruits (Schisandra sphenanthera Rehder & E.H. Wilson) the other in a transition from wild harvest to cultivation (Paris polyphylla Smith), an animal species (the Tokay gecko (Gekko gecko L.)) and the entomophagous "caterpillar fungus" (Ophiocordyceps sinensis (Berk). G.H. Sung, J.M. Sung, Hywel-Jones & Spatafora). RESULTS: High prices of medicinal plants are widely considered to reflect resource scarcity. Real-time market prices for three of the four very different TCM species we studied all showed major price fluctuations. The exception was P. polyphylla, whose wild populations are widely known to be increasingly scarce, where there was a steady increase in price, with few fluctuations in the upward price trend. The three other species showed significant price fluctuations. These were driven by multiple factors. Ecological and biogeographic factors that influence abundance or scarcity of supply certainly played a role. But other factors were also influential. These included both national and global economic factors (the influence of the Global Financial Crisis (GFC)), national policy changes that in turn influenced businessmen giving expensive gifts (that included O. sinensis)), climate change (influencing fruiting success of S. sphenanthera), price speculation by traders and lack of information (e.g: reduction in G. gecko prices due to traders incorrectly believing that domestication would increase supplies). CONCLUSIONS: Price fluctuations in the four TCM species we examined are influenced by many factors and not just resource scarcity. And the situation is more complex than the trajectory based on Homma's (1992) model, where he predicted that higher prices would result in a shift to cultivation, thus replacing wild harvest. In case of both O. sinensis and P. polyphylla, Homma (1992, 1996) was right in terms of scarcity and high prices stimulating a major investment in cultivation (P. polyphylla) and artificial production (O. sinensis). But in both cases, intensive production through cultivation or artificial propagation do not yet occur on a large enough scale to reduce harvest of wild stocks. Substitution and adulteration occur with all four species. Improving information to medicinal plant traders on the supply status of TCM stocks, whether from wild harvest or from cultivation could benefit product quality, cultivation initiatives and conservation efforts.

[Discussion on releasing price of Chinese patent medicine to market economy to achieve sustainable development].

OBJECTIVE: To analyze costs of the traditional Chinese medicine industry focusing on production costs. METHOD: Data of 50 planted Chinese herbal medicines and 50 wild Chinese herbal medicines were summarized and analyzed to see the changes of price of Chinese herbal medicines. RESULT: The derivative problems of limited price were analyzed by crude drug, quality of Chinese medicine and sustainable utilization of resource. CONCLUSION: The price of Chinese medicine shall be adapted to sustainable development of market economy.

[Novel method for dynamic monitoring and early-warning on wild resources of traditional Chinese medicines based on price ratio between drug and foodstuff].

OBJECTIVE: To probe into the new idea along with establishment of a novel method for dynamic monitoring and early-warning on the wild resources of traditional Chinese medicines (TCMs). METHOD: The alterations of wild traditional Chinese medicinal resources were assessed through the price ratio between drug and foodstuff (PRDF) indicating the balance between supply and demand of the specific TCMs, referred to the price ration between pork to foodstuff which is used in national monitoring to the balance between pork supply and demand. RESULT: Since the price of rice was tightly controlled by government, it was selected as a relatively stable reference to build the PRDF in order to take away the non-marketing influence to TCMs price such as CPI and inflation rate. The modified relative alteration trend of TCMs price had been researched through comparing different formulae to build PRDF, including absolute average month price of TCMs, month average price ratio of TCMs to foodstuff (rice) , month-on-month change of TCMs to rice, year-on-year change of TCMs to rice, and difference in value of period-on-period change (DVPPC). In the research, Cordyceps, Glycyrrhiza and totally five herbs were selected as model drugs and the price data were collected from 2002 to 2008. The results showed that DVPPC calculated of relative long time window was more sensitive and stable to reflect the relative alteration trend of TCMs price. For instance, the DVPPC of Ligustici showed continuously increase trend in recent years. This suggested appearance of unbalance between supply and demand of Ligustici, and forced policy intervention to maintain reasonable and continuable utilization of Ligustici resource. CONCLUSION: The proposed method and the formula of DVPPC revealed some useful guidance for dynamic monitoring the wild resources of TCMs.