In 2001, the State Drug Administration dealt with 51,700 cases involving the manufacturing and marketing of counterfeit medicines worth 485 million yuan (US$58.4 million), Zheng Xiaoyu, director of the administration, said at a two-day working conference held in Shanghai over the weekend.

Yet only 269 of those cases resulted in criminal prosecution, according to Zheng.

"The ingredients in fake medicines aren't the same as those in legitimate drugs. The fakes are very dangerous and pose a threat to public health," said Zheng. "A long-term campaign against the illegal pharmaceutical trade will help the pharmaceutical sector move along a sound track, guarantee people's health and provide a good investment environment for drug makers."

The authority also investigated 2,337 cases of pirated or inferior medical equipment, and destroyed 151,500 doses of out-of-date medicines valued at 229 million yuan.

"We also found 256 firms that had reworked animal medicines for human use," said Zheng. "The intensified crackdown was a heavy blow to the knockoff market. But we noticed that more fake medicines are flowing into rural areas, so those are our next battlefield."

China's move to improve the quality of domestically made drugs has meant closing down some manufacturers.

The State Drug Administration began a new round of recertification for pharmaceutical companies last year.

"The number of pharmaceutical wholesale firms decreased by 27 percent to 6,819," said Zheng. "We granted manufacturing licenses to 6,731 drug-makers, rejected 779 firms' applications and ordered 225 pharmaceutical firms to revamp. Meanwhile, 2,660 medical equipment producers were eliminated from the market."

"Due to legislative amendments, pharmaceutical companies unable to meet the new quality standards by 2004 will be wiped out," said Li Hongsheng, head of the administration's market compliance department.

Stemming from the fact that about 10 to 30 percent of patients in domestic hospitals report adverse drug reactions and about 15 percent of accidents involving medical equipment are due to design defects, Zheng said a nationwide adverse-drug-reaction monitoring network has been formed.

All drug makers, medical equipment manufacturers and pharmaceutical distributors must now join hospitals in reporting any suspected adverse drug reactions to the local drug administration. The state administration said it received 7,718 reports last year.

Any company concealing adverse drug reactions or failing to disclose side effects on medicine labels will be fined up to 30,000 yuan by the drug administration.

"Last year, we rolled out the new Drug Management Law, providing specific and tough penalties for violations," said Zheng. "We will continue to make the legislation more trans-parent and consistent."

(Eastday.com February 04, 2002)