From now on, Chinese manufacturers that export to the US any of the active pharmaceutical ingredients (APIs) listed on a newly drawn up list are required to register with the Chinese drug regulators. Gentamicin sulphate (an antibiotic), atorvastatin (the API in Lipitor) and sildenafil (the API in Viagra), are among the big-name ingredients included on the list. The agreement will assist both China's State Food and Drug Administration (SFDA) and the US Food and Drug Administration (FDA) in more easily keeping track of and inspect these manufacturers as to their regulatory compliance. Good news for the FDA, which has been copping much criticism of late for its failure to inspect even a fraction of the foreign drug manufacturing facilities that export to the US. This is a worrying scenario, considering that 75-80 per cent of all active pharmaceutical ingredients (APIs) used by US drug manufacturers are now imported, mainly from India and China, along with 40 per cent of finished dosage forms from various global locations. According to a recently-released Government Accountability Office (GAO) audit report, China, which has the largest number of drug manufacturers eligible for FDA inspection (714) is earmarked for only 13 regulatory visits by the FDA this year, meaning only less than 2 per cent of the country's drug exporters will have their facilities examined. Alarmingly, it is China of all places that should be subject to particular regulatory scrutiny due to its abominable track record on unsafe and counterfeit drug products, along with a smattering of corruption amongst some of the country's high-ranking regulatory officials. This week's agreement is the fruit of a six month series of talks on drug safety between the SFDA and the FDA to begin to tackle these safety issues and is one of a number of trade accords signed between the pair this week. However, while the news is positive, it only is only the start of a long road that will need to be travelled before the situation can be vastly improved. For example, the list of chemicals covered under the new accord accounts for only a fraction of the APIs being imported by China to the US. Meanwhile, China's SFDA is pressing forward with its own agenda to clean up its drug industry. This week the watchdog has finally implemented a new system that requires drug manufacturers to recall unsafe drugs voluntarily as soon as they become aware of a problem, in order to minimise their exposure to the supply chain. In doing so, they can avoid or receive lesser regulatory repercussions, but if they fail to do so, they risk facing severe penalties such as large fines (up to three times the drug's market value) or in the most severe cases, removal of their manufacturing licence. Under the new recall system, pharmaceuticals that are classed as being harmful or potentially fatal which must be recalled within 24 hours of the discovery of a safety issue; drugs that may cause temporary or reversible health problems must be recalled within two days; and medicines that need to be recalled for non-safety related issues will be required to be removed from circulation within three days. The new rules apply to both domestic and foreign manufacturers importing drug products to China. In another sign that is serious about reform in the industry, the Chinese regulator has now revoked the manufacturing licence of a factory belonging to Hualian Pharmaceutical in Shanghai after initially forcing it to stop all production at the facility in September. Hualian, which is owned by one of China's largest pharmaceutical companies, Shanghai Pharmaceutical Group, was given the most severe punishment available to the SFDA after it was found guilty of making contaminated medicines that severely harmed patients, and then covered up the fact. According to the SFDA, two leukaemia drugs, methotrexate and cytarabine hydrochloride, caused paralysis in over 100 patients who received them via spinal injection earlier this year. Regulatory investigations of Hualian's Shanghai facility uncovered a contamination issue as the same production line was being used to make these two drugs as was being used to make another chemotherapy drug vincristine sulphate, which should not be injected into the spine. Following the investigation, a number of the site's staff have been arrested and all sales traced back to the two drugs have been seized by the SFDA.