August 26 -- Shandong Lukang Pharmaceutical (600789.SH), an antibiotics manufacturer based in Jining city, posted a 31.04-percent drop in net profit from the first half of 2011 to 56.43 million yuan, as its earnings per share fell 31.04 percent year-on-year to 0.097 yuan, reports Chinese Business News. Revenue jumped 11.22 percent year-on-year to 1.23 billion yuan.

Lukang Pharmaceutical slashed prices of its antibiotic drugs during the first half of 2011 due to the National Development and Reform Commission’s (NDRC) having set a ceiling price on antibiotic drugs. The decision to cut prices was also a response to policies from the Ministry of Health.

Gross margins of Lukang Pharmaceutical’s antibiotic active pharmaceutical ingredients (API), API of semi-synthetic antibiotics and preparations respectively fell 3.16 percent, 15.42 percent and 2.62 percent year-on-year during the first half of 2011. The margin drop was blamed on intense competition in the medicine market and higher production costs.

According to an unknown source, Lukang Pharmaceutical’s subsidiary, Shandong Lukang Record Pharmaceutical, was shut down for over a month during the reporting period and has yet to resume production.

New regulations affecting antibiotics manufacturers and distributors will be launched by the Legislative Affairs Office of the State Council.