China has shown time and again that when its leaders make something a priority, they usually get results. A decision to ban all forms of the drug fentanyl seven years ago under US pressure showed how quickly authorities can mobilize against an illicit trade. They should now bring that same attention to the export of unregulated peptides.
These compounds are short chains of amino acids that work as chemical messengers that activate or inhibit various biological functions in the body. While some peptides such as insulin and the active ingredient in Ozempic are legal and widely prescribed, there is a vast array of injectables that have grown popular among biohackers looking to build bigger muscles, get smarter or look better.
There are two main issues with products like BPC-157 and TB-500, which purportedly aid recovery, and melanotan, a synthetic tanning agent. First, the molecules have not been adequately tested for safety or efficacy in humans. Some were banned three years ago by the US Food and Drug Administration (FDA) over those concerns.
Misuse of peptides can upset the body’s hormonal and metabolic balance, raising the risk of serious side effects like organ damage. Secondly, a grey-market boom means dodgy products are often sold by online merchants.
China, with its vast chemical and pharma industries, appears to be the main source — creating public-health risks that demand Beijing’s attention. The country has about 1,000 online sellers targeting buyers abroad, according to the Financial Times.
While no one should equate unlicensed peptides with fentanyl, the synthetic opioid responsible for the bulk of nearly 40,000 overdose deaths in the US last year, there are obvious parallels.
Both can be churned out cheaply at scale and shipped across borders in small parcels, making them difficult for regulators to track. And like fentanyl, peptides are being marketed widely over the internet to overseas buyers even though they’re off-limits at home.
The clandestine nature of the business has led to a boom in the use of digital assets by first-time users. Since banks and credit card processors generally eschew transactions involving unlicensed substances, buyers use cryptocurrency. Crypto payments to peptide vendors jumped 700% to $32 million in the first quarter of this year, analytics firm Chainalysis wrote in June.
Some of the biggest vendors are Chinese chemical makers that were, until recently, mainly supplying the building blocks of fentanyl and amphetamines to drug cartels, according to blockchain records.
This on-chain peptide economy is expected to exceed $100 million annually, driven by endorsements from celebrities like podcaster Joe Rogan and actor Jennifer Aniston. Industry insiders estimate the unregulated market is worth between $1 billion to $3 billion.
The trade is one-sided. Unauthorized peptides attract little interest in China. ‘Looksmaxxing,’ an online subculture focused on one’s physical attractiveness that can go to extremes, including using peptides to change skintones or body composition, has failed to gain traction.
China’s disenchanted Gen Z has instead responded to a slowing economy and high jobless rates with silent rebellion in the form of ugly work outfits or vows to ‘lie flat.’ Self-improvement is not on the agenda. China also has reputable peptide makers.
Companies such as WuXi AppTec have benefited from soaring demand for the ingredients used in blockbuster GLP-1 diabetes and weight-loss drugs, including the active ingredient in Eli Lilly’s obesity treatment Zepbound.
Beijing may seem to have little incentive to crack down on a shadow business that barely affects its own citizens, but that is shortsighted. As with fentanyl, the grey peptide market creates reputational, regulatory and geopolitical risks.
Singapore has declared it illegal to sell unregulated products, while Australia has warned of serious side effects such as liver damage and severe allergic reactions requiring hospitalization. The US is bucking the trend; external advisors to the FDA have recommended relaxing restrictions on some peptides.
More than most countries, China understands the national trauma that can accompany the unchecked spread of potentially dangerous substances. That history has shaped decades of tough anti-drug policies at home. Allowing it to become the world’s main source of unregulated peptides would sit uneasily with that legacy.
China has something else to protect: an ambition to become a global pharmaceutical leader. World-class manufacturers shouldn’t have their reputations tarnished by a grey market flourishing alongside them. Bringing unauthorized exports under tighter control would only reinforce that goal. ©Bloomberg
The author is a columnist for Bloomberg Opinion’s Asia team, covering corporate strategy and management in the region.