The State drug regulatory body announced plans for new drug production quality management standards, which are expected to help further integrate the highly fragmented sector.
The new plan, called the Good Manufacturing Practice (GMP) standards, is slated to go into effect March 1, and drug producers must receive GMP certification within five years, according to an announcement from the State Food and Drug Administration.
Analysts said that the new standards could help improve drug quality and boost merges and acquisitions in the pharmaceutical industry.
"Quality control is the focus of the new practice," Yu Mingde, president of the Chinese Pharmaceutical Enterprises Association, told the Global Times Sunday.
Industry employees will be required to receive periodic training and the drug production process - including purchasing, processing and packaging - will see higher standards put in place, said Yu.
Although analysts agree that the new standards are for the best, they warn that the changes are expected to be met with some resistance from industry.
An official with the State Food and Drug Administration said that the new standards could shut out as many as 500 small- and medium-sized drug producers, which will be hardest hit by rising operational costs brought on by the new GMP standards, according to an earlier report from China Business News.
In some sectors of the industry, the situation for some companies may go from bad to worse.
"Nearly 80 percent of blood products manufacturers won't be able to live up to the new GMP standards," said Li Longjun, a pharmaceutical industry analyst with Sinolink Securities.
But the Pharmaceutical Enterprises Association's Yu believes that the industry will survive, despite the changes brought on by the new standards.
"The new GMP standards originally gave drug producers just three years to prepare (for the changes) and get certified, but considering the potential impact on the industry, the preparatory period was prolonged to five years," said Yu.
The new GMP standards also require manufacturers to set up a drug recall system, which according to Yu is a first in China. And each step of the drug production process will be recorded in order to monitor quality.
In the long run, analysts agree that the new GMP is crucial to upgrading the country's pharmaceutical sector.