A big problem hindering the industry's development is that manufacturers do not own the property rights of what they produce.

The country could produce more than 4,000 types of medicine but about 99 per cent are versions of patent medicines developed by others, according to the Chinese Chamber of Commerce of Medicine & Health Product Importers and Exporters.

Only 70 new medicines were developed by domestic manufacturers last year, accounting for 3 per cent of all new medicines approved by the State that year.

Chinese manufacturers invest little in research and development, explained Qiao Haili, head of the Western Medicine Department with the chamber of commerce.

Chinese pharmaceutical enterprises invest an average of 2 per cent of their annual sales volume in developing new medicines, compared with overseas companies' 15 per cent.

Qiao added that it takes on average US$500 million and 10 years to develop a new medicine. Domestic manufacturers should take long-term view and invest more in research and development, he said.

He also urged domestic manufacturers to strengthen their deep-processing capabilities and not be satisfied remaining large producers of pharmaceutical ingredients. Qiao said that producing new medicines was much more profitable than producing pharmaceutical ingredients.

China is already capable of producing about 1,500 types of pharmaceutical ingredients. It is now the world's second-largest producer of pharmaceutical ingredients after the United States.

According to the chamber of commerce, China produced 430,000 tons of pharmaceutical ingredients last year. Of this, 389,000 tons were exported, accounting for 22 per cent of the global market share.

Large-scale production of pharmaceutical ingredients as well as low production costs are the advantages of the Chinese pharmaceutical industry, said Zhang Changxin, deputy director of the chamber of commerce.

The industry should make full use of its advantages and improve itself, said Zhang.

He added that there were problems such as enterprises' small production scale, products' low added value and cut-throat competition among manufacturers.

Product quality still needs to be improved, though products already fulfil the pharmaceutical requirements of other countries.

(China Daily July 5, 2002)