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The Chinese government is to increase investment in the development of new drugs and encourage innovation by domestic pharmaceutical companies.

Insufficient funding for research and development and a lack of innovation has to date hampered the development of China's pharmaceutical industry, according to Zhang Guobao, deputy director of the State Development and Reform Commission.

Goals for the medical and pharmaceutical industries were set as part of the 11th Five-Year Plan (2006-2010), and the commission has issued guidelines on how these goals could be achieved, Zhang added.

The goals are:

• To industrialize production of 20 chemically-processed raw pharmaceuticals which have potential demand growth and high added value.
  
  
• To register five new drugs a year in the US and EU.
  
  
• To develop and commercialize 20 to 30 standard, safe, effective and stable traditional Chinese medicines.
  
  
• To industrialize production of 10 to 15 new drugs and vaccines for the treatment of severe and acute infectious diseases and serious chronic diseases, intellectual property rights to which China will own.
  
  
• To industrialize production of 10 to 20 varieties of digital and minor or non-invasive surgical equipment and materials.

The guideline requires that at least five percent of income from pharmaceutical sales be reinvested in research and development, and three percent on general production.

The key areas for new drugs will be cancers, cardiovascular and cerebrovascular systems, viral infections, nervous and psychological systems, blood sugar reduction and senility-related illnesses.

In addition, the government will establish five large pharmaceutical groups with sales of at least five billion yuan (US$625 million) each and 10 groups with sales of three billion yuan (US$375 million) each by 2010.

It also aims to help five domestic companies grow into international pharmaceutical producers.

Zhang said the guidelines are flexible: "The purpose is to make information available and offer suggestions to pharmaceutical companies, thereby leading a healthy and ordered growth of the pharmaceutical industry."

(Xinhua News Agency September 1, 2006)