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By Michael Wei and Tan Ee Lyn

BEIJING/HONG KONG (Reuters) – When Pang Jianli walked into a Beijing pharmacy to buy medicine for his flu-stricken son, he was greeted by an overwhelming display of boxes and bottles emblazoned with promises of miraculous cures.

“Unlike shopping in supermarkets, where I buy the brands I know and I know the brands I buy, buying drugs is different; the brands you know may not be what they claim to be,” said the 38-year-old father.

China’s poorly regulated medical market has spawned a new ‘Wild West’ for untested drugs offered by fly-by-night firms. The medical ‘free-for-all’ is reminiscent of the era of ‘snake-oil salesmen’ over a century ago in the United States.

From impotency treatments, to drugs that prevent hair loss, to medicines that cure chronic diseases, Chinese consumers are bombarded by adverts for a vast array of treatments making false or inflated promises.

Analysts say the murky business practices and misleading claims may actually help the prospects of foreign drug companies scrambling for a piece of the $110 billion medications market in China.

“Nowadays, Chinese people don’t trust Chinese medications. They trust Western brands more as they have a better reputation,” said Huang Jianshi, Assistant President of the Chinese Academy of Medical Sciences and Peking Union Medical College.

Foreign drug companies such as GlaxoSmithKline Plc and Pfizer Inc usually work directly with hospitals and doctors and rarely advertise, explained Du Jinsong, a pharmaceutical analyst with Credit Suisse in Hong Kong.

“Fake drug adverts have limited impact on foreign brands as foreign companies sell and market their products in a different way,” he said.

Treatments being aggressively touted don’t just promise to cure baldness or erase wrinkles, some also claim to cure chronic conditions such as hepatitis B, a disease that sometimes results in the need for a liver transplant, said Ewan So, president of the Society of Hospital Pharmacists of Hong Kong.

“If there was such a magic drug, we would have used it by now,” he said. “A liver transplant costs between HK$500,000 to HK$600,000. Why go to all that trouble?”

China’s State Food and Drug Administration (SFDA) counted 329,613 cases of the distribution of unlicensed drugs and medical products in 2007 and collected 746.17 million yuan (or $109 million) in fines.

But the fines have done little to deter the sale of untested drugs in a country where regulation is lacking and enforcement is lax. Analysts said it was hard to measure to what degree public mistrust of adverts have affected drug sales, which grew 26 percent to 752 billion yuan ($110 billion) last year in China.

“Like any other social issues in China, we now have adequate policy out there. The most crucial thing is how to effectively enforce the law,” said Xu Jun, a pharmaceutical analyst at Orient Securities in Shanghai.

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