Beijing Orders Investigation of Health Agency

This article, from today's New York Times, seems to talk only about pharmaceutical drugs - I wonder if TCM products are affected.

See also: pcomstudents.net

SHANGHAI, Feb. 9 — Concerned about a growing number of cases that involve the sale of fraudulent or dangerous medicine, the Chinese government said today that it had ordered a thorough investigation into the agency that is supposed to be the national regulatory watchdog, the state food and drug administration.

The move comes amid a widening investigation into corruption in the country’s fast-growing pharmaceutical industry.

Small Chinese drug makers have long been accused or suspected of producing cheap counterfeit versions of well-known drugs, often using substandard or hazardous substitute ingredients, and selling them to the nation’s hospitals and pharmacies.

Some of those phony drugs have been blamed in recent years for widespread illnesses and scores of deaths.

Now, the government says that corruption in the state food and drug administration, which is based in Beijing, was a major part of the problem.

The government said it had detained Zheng Xiaoyu, the head of the agency from its founding in 1998 until June 2005, when he retired, and that it is investigating whether Mr. Zheng accepted bribes from Chinese pharamaceutical companies in exchange for approving drug production licenses.

The state-run news media said that a high-level government body was recently told that Mr. Zheng had “neglected his duty to supervise the drug market, abused the administration’s drug approval authority, took bribes and turned a blind eye to bad practices by relatives and subordinate officials.”

Two other high-ranking officials of the agency have also been detained. In November, one of them, the director of the division in charge of issuing production licenses, was sentenced to 15 years in prison for corruption.

No western drug companies appear to be involved in the investigation, though some global drug companies have complained about Chinese counterfeiting of their most popular drugs.

Even so, the scandal may have global implications, because experts say that a large percentage of the medicine sold in the developing world is counterfeit, and that China is a main source.

The scandal is almost certain to intensify concerns in the global pharmaceutical industry about China’s regulatory controls and its oversight of a drug industry that has a history of infringing drug patents and trademarks.

The investigation was ordered by senior government leaders, including Premier Wen Jiabao and Vice-Premier Wu Yi, an indication of how serious the problem of fraudulent drugs has become in China.

Reports of illnesses and deaths caused by dangerous foods or fraudulent drugs have been frequent in recent years. Last May, for instance, 11 people died in China after being given injections tainted by a fake chemical.

In July, six people died and 80 people fell ill nationwide after taking an antibiotic that was produced using a “substandard disinfectant.”

An even more sensational case occurred in 2004, when at least 13 babies died and more than 100 other children suffered from severe malnutrition in eastern Anhui Province after being fed fake milk powder.

The authorities here are also trying to crack down on the production of unlicensed generic versions of popular drugs.

Last May, 10 people were arrested here in Shanghai for selling knocked-off Tamiflu, a drug used to prevent and treat influenza.

In a statement posted on the food and drug agency’s web site today, Wu Yi, the vice premier, said the government would severely punish the “wicked activities” that put adulterated food and drugs on the market.

Worried that corruption may have seeped into the top levels of the agency, the government said on Thursday that it would review more than 170,000 production licenses issued over the past decade, particularly those issued between 1999 and 2002.

The inquiry is expected to slow the drug approval process at a time when demand for medicine is soaring in an overburdented health care system.

Zhu Changhao, vice chairman of the China Association of Pharmaceutical Commerce, a Beijing-based trade group, acknowledged today that “corruption certainly exists in the drug administration system.”

But, he added, “I wouldn’t say that the whole drug administration system is corrupt.”

The problems with fake drugs in China have been developing for years. As long ago as 2000, officials were warning about “illegal medicine fairs” and widespread counterfeiting. In 2002, Mr. Zheng, a 20-year veteran of China’s drug industry, told a conference that his agency had uncovered 70,000 instances of fake drugs in the first half of that year alone, and said he was working to crack down on the problem, according to reports in state-run news outlets. The agency was reported to have revoked the business licenses of some 160 manufacturers and retailers in 2006.