Echo Hu/ Shanghai Daily news

The majority of medicine made by local hospitals meets quality standards, but city officials will continue to closely supervise medical institutions, a joint press conference by several government bodies said yesterday.

The announcement came after Punan Hospital in Pudong New Area was penalized by the city's drug watchdog for prescribing a medicine not registered with the Shanghai Food and Drug Administration.

Inspections through last year by the city's FDA found 97.8 percent of medicine made by local hospitals met standards due to the medicine re-registration campaign launched by authorities in recent years.

Stricter standards have been imposed during the approval process of drugs made by hospitals. Questionable drugs were not approved by the city's FDA.

A total of 153 illegal medicine cases in the city’s hospitals have been handled by drug supervision and management authorities since 2005. Four hospitals were ordered to rectify their wrongdoings last year.

At the conference, officials promised to step up efforts to standardize the processing of medicine made by hospitals to ensure quality and enhance management on laboratories that produce medicine.

The Punan Hospital's case delivers a warning to all medical institutions, Shanghai Health Bureau officials said.

The city's FDA began to investigate the case after a tip-off, and found that the hospital had asked a local traditional Chinese medicine company, Yanghetang, to boil down medicinal herbs named Gankang for them between October 2006 and October 2007. This had not been reported to the administration and had not undergone the necessary approval process.

The hospital was fined about 400,000 yuan (US$54,054) and ordered to rectify the situation late last year.

Medicine made by hospitals is usually developed to meet clinical demand.