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Capsule safety scandal to put prices up

By Liu Jie  (China Daily)

13:25, May 14, 2012

Bottles of capsule-packed deep sea fish oil, lecithin and garlic oil at a store in Beijing. Many healthcare drugs and foods sold in the Chinese market are foreign brands. According to the International Food Packaging Association, the price of industrial gelatin is 10,000 yuan a ton in the world market, compared with 30,000 yuan for edible gelatin and 50,000 yuan for pharmaceutical gelatin. [Photo/China Daily]

Ru'ao town, in Xinchang county, Zhejiang province, suddenly became famous in April - not for its beautiful scenery or outstanding economic growth but for a pharmaceutical safety scandal.

The town, with a population of fewer than 30,000 and an area of 100 square kilometers, produces 80 billion pills of capsules every year, accounting for more than 30 percent of China's total production.

The scandal was exposed by the media on April 15. A total of 13 commonly used drugs made by nine big Chinese pharmaceutical companies were packed into capsules made from industrial gelatin, which contains a much higher degree of chromium and is priced much lower than edible gelatin. Eight of Ru'ao's total 34 capsule producers were involved. Their output makes up one-fifth of the town's production as a whole. They used gelatin made from waste leather scraps to process drug capsules. Chromium can be toxic and carcinogenic if ingested in large quantities.

The town has attracted food and drug administration and supervision officials, inspection and quarantine experts, industry association staff and the media. "The situation in Ru'ao might be regarded as a snapshot of China's capsule industry," said Zhang Shide, vice-chairman of the China National Pharmaceutical Packaging Association. "Low standards in the industry and ever-increasing demand led to decentralization and a boom in small-sized companies. The boom resulted in over-production, serious competition and price wars that, combined with a lack of self-discipline, created disordered and malicious competition within the industry."

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