According to FDA regulations, all diet supplements sold in the US market must list their ingredients on the package and report them to relevant authorities.

Officials from the Yunnan Baiyao Group, the exclusive producer of Yunnan Baiyao, denied to Xinhua News Agency Thursday that there is a double standard in Yunnan Baiyao's secret-protection policy, and that ingredients are only reported to drug authorities.

"Whoever disclosed the ingredients should be held legally liable," Huang Wushuang, an expert on intellectual property rights at East China University of Political Sciences, said.

Preferential prices

However, Chen Changxiong, the deputy director of the Policy Research Center at the China Pharmaceutical Association, told the Global Times that ingredients of a drug do not equal to its formula, and the secret of Yunnan Baiyao consists not only of its ingredients, but also the portion of the components, the production techniques, and the production procedure.

"You cannot produce a medicine by only knowing its components," said Chen.

Apart from being a State secret, Yunnan Baiyao was also rated as first-class protected item under a 1992 regulation issued by the Ministry of Health.

As benefits, Yunnan Baiyao could enjoy some preferential policies including self-determination on market prices of their products and long-term property rights protection.

These rights have made the production of protected herbal medicines lucrative.

According to NBD, more than 1,200 Chinese herbal medicine producers have applied to the Chinese Ministry of Science and Technology and State Secrets Bureau in 2005 to secure protection for their medicines.

The Yunnan Baiyao Group has a series of products under the name of Yunnan Baiyao, including Yunnan Baiyao Tincture, Yunnan Baiyao Plaster, Yunnan Baiyao Aerosol and even Yunnan Baiyao Toothpaste.

According to a report Friday by CB.com.cn, an online business news portal, Yunnan Baiyao products enjoy a favored pricing policy.

On February 5, 2009, the Yunnan Baiyao Group raised their overall product prices. Prices for some of their products went up 143 percent. Even the Yunnan Baiyao Toothpaste is now more expensive at ($4.6) 30 yuan per tube.