China will introduce stricter measures in its approval of new medicines to cure its "disorderly" drug industry, according to the country's top food and drug administrator.

Director of the State Food and Drug Administration (SFDA) Shao Mingli was speaking at a national conference on drug administration that closed in Beijing on Thursday.

"In order to curb rampant and irregular registration of new drugs, the country's drug watchdogs will not only check the qualification of producers but also inspect research labs and analyze clinical experiment records," the China Securities Journal quoted an unidentified source with the SFDA as saying.

The source said a thorough examination will also cover the drugs already on sale.

Many Chinese pharmaceutical companies are known to have registered new drugs by copying existing products as new drugs can be sold at much higher prices than old ones.

The government is revising a law to narrow the definition of new drugs and control the registration of imitation products, the SFDA source told the newspaper.

In each of the past few years, the SFDA handled more than 10,000 applications for registering new drugs, compared with merely 148 accepted by the United States in 2004.

Meanwhile, only 212 of the new drugs approved by the SFDA in the 2003-2005 period have their own intellectual property rights.

"Ninety-six percent of China's chemical drugs are imitations as our drug companies can't afford the high cost of developing new drugs," said Zou Xinjin, an analyst with the China Securities Research Co., Ltd..

Chinese pharmaceutical enterprises invest less than three percent of their revenues in research and development, compared with eight to ten percent in developed countries.

"Most of the 5,000 drug companies in China have very few famous brands, while redundant production has led to oversupply and reduced competitiveness," said Liu Yanming, an analyst with the China Galaxy Securities Co., Ltd.

Statistics show the combined output of the country's top ten drug companies only equaled 12 percent of Pfizer Pharmaceuticals Limited, the world's largest drug producer.

Analysts say a stricter registration system for new drugs is expected to boost those medicinal companies with advantages in research and development and fuel mergers and acquisitions in the industry.

(Xinhua News Agency January 21, 2007)