170,000 drug licenses face China SFDA review

China's State Food and Drug Administration has ordered the review of 170,000 drug production licenses, following the launch of a corruption investigation, ordered by the country's Premier Wen Jiabao, of the agency's former Director, Zheng Xiaoyu (Marketletter February 5). Mr Zheng, who retired in June 2005, was the supervisor of two Deputy Directors who have subsequently been arrested on corruption charges.

Hao Heping, the SFDA's medical equipment licensing chief, was sentenced to 15 years for taking $100,000 in bribes and illegal possession of firearms. His drug licensing colleague, Cao Wenjuang, awaits trial on similar charges (Marketletters passim).

One of the main sources of corruption involving drugmakers appears to be connected to the price regime for new and old drugs. Local manufacturers have been known to make minor changes to a drug's packaging in order to claim that it is new. By bribing officials at the SFDA, drugmakers are believed to have avoided scrutiny of their actions. The bogus licensing of repackaged drugs aside, a number of scandals involving fake or substandard drugs has plagued China. Mr Zheng himself was the head of an investigation team sent to examine an incident involving the sale of fake milk powder that led to the deaths of several infants from malnutrition in April 2004. In 2006, separate incidents of a substandard vaccine and a contaminated antibiotic led to 11 reported deaths.