Stricter Supervision of Pharmaceutical Market in China

With persistent issues of corruption and counterfeiting, China has implemented various policies to address its troubled pharmaceutical industry. From the antibiotic Xinfu scare, which led to at least 10 deaths to a bribery investigation of the former head of the State Food and Drug Administration (SFDA) Zheng Xiaoyu, the China pharmaceutical industry has been plagued with problems.

The SFDA has stepped up its GMP inspections since 2005; it revoked the business licenses of 160 drug manufacturers and retailers in 2006. Over 4,000 drug wholesalers and 40,000 drug retailers were inspected in 2006. The SFDA checked these companies to ensure purchase and sales records were orderly, licenses were updated and transferred with proper authority, and assessed other requirements. This year, the government plans to review the production licenses of 170,000 drugs, focusing especially on those approved during Zheng’s period as head of SFDA.

For those drug companies involved in bribery, China’s Ministry of Health plans to blacklist these companies and post the lists on local health authority websites. No medical institution will be allowed to purchase drugs or medical devices from these blacklisted companies. Doctors may also have their licenses revoked for giving or taking bribes. The government hopes that these new rules will promote increased internal surveillance of the drug market.

Other efforts to clean up the industry include stricter regulations on illegal advertising and banning drug regulators from owning stock in pharmaceutical companies. The government plans to blacklist drug manufacturers and retailers who illegally advertise. This list would be published on the government’s website. An SFDA survey conducted from January to November 2006 found over 48,000 illegal advertisements for drug products. Drug regulators who own stock in pharmaceutical companies and do not sell their stock will be fired from their jobs.