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Pharmaceutical companies have been ordered to make sure the quality and efficacy of their drugs are on par with brand-name drugs, a move that aims to improve the nation's pharma industry.

According to a circular issued by the State Council General Office, generic drugs already available on the market should be assessed on whether they are consistent with brand-name drugs, and if they could be used clinically.

The assessment should be in-house, and the drug watchdog will publicize those medicines that passed the assessment, the circular said.

The government will also include drugs in the nation insurance program if they pass the assessment and public hospitals will prioritize these drugs in procurement, among other favorable policies.

Bi Jingquan, head of the China Food and Drug Administration, said the assessment will be a challenge for firms, but it is necessary if China wants to become a pharmaceutical power.

Generic drugs, intended as interchangeable products, are often as effective as, but much cheaper than, brand-name drugs, according to the World Health Organization definition.