The State Council released guidelines on reforming new drug approval procedures, addressing ways to boost innovation of drugs and medical equipment.

Currently, there are more than 4,000 pharmaceutical companies in China producing generic drugs. Competition between them used to be unregulated and the products quality was sometimes unsatisfactory.

The guidelines propose the concept of a pharmaceutical patent linkage system, involving a combination of drug registrations and patents, where the CFDA is responsible for registration of medicines, while the State Intellectual Property Office (SIPO) handles patent applications.

The guidelines suggest pilot programs for compensation for patented drug developers during the administrative approval procedure for new drugs, to deal with the problem that the longer the approval process takes, the longer the delay will be for the launch of new drugs onto the market, and the closer to the expiry of the patent - reducing the revenues due to the drug companies and patent owners.

The guidelines also call for a certain period of protection from wider commercial use for the drug developers' experimental data and research.

In addition, the government will periodically release a list of drug patents that are no longer valid, to guide drug companies in the production of generics.

Those new measures were first defined in developed markets - including the US, Japan and Europe, in the 1980s and 1990s - to facilitate innovation in drug management.

Implementation of them in those markets was successful and stimulated the production of generic drugs.