SHENZHEN, Guangdong - Prices for traditional Chinese medicine (TCM) materials are facing an abnormal increase, leading to pharmaceutical companies to be mislead, an expert said.

Three hundred and ninety-nine out of 537 TCM materials investigated had higher prices than those compared with the same time last year, according to figures provided by China Association of Traditional Chinese Medicine.

"The average increase is about 10 percent for the first quarter of the year, some of the worst -- especially those wild (TCM) materials -- reached a 400 percent increase," said Fang Shuting, head of the China Association of Traditional Chinese Medicine.

"For example, honeysuckle flower, the most commonly used herb for the cold in China, boosted its price from around 20 to 30 yuan (per half kilogram) to 400 yuan," he said.

Fang said China's annual demand for honeysuckle flower was about 10,000 tons while the current pharmaceutical factories could only produce seven to eight thousand tons.

"The gap is therefore created, and worst of all, many of the first-hand herbal collectors hoards for speculation instead of filling the gap and takes the opportunity to raise the price further," he said.

For the first time in their lives, farmers living in Xihu village, Heyuan, located 170 kilometers from Shenzhen, planted honeysuckle rather than paddy rice this March.

"We went to Shangdong province for the yong plant in early March," said a farmer surnamed Liu (who refused to give full name). "I would earn about 8,000 to 10,000 yuan per Mu (0.0667 hectare) for the honeysuckle, however, for the paddy rice, it's only 1,000 yuan tops."

Liu also mentioned unlike paddy rice, honeysuckle just needs dry land.

"I was so excited to see them blossom in May -- in just two months after planting (the part that could be used for TCM material is the flower)," he said.

Some of other TCM materials which doubled or tripled their prices include notoginseng and radix pesudostellariae.

"I've witnessed several rounds of price increases since the year before last year, it's not the first time," said Yang Yongxiao, TCM doctor that based in Shanghai. "Wider needs and the social acceptance of traditional Chinese medicine in recent years contributed to price skyrocket."

Yang said from his own experience of running a TCM school for over three years, the average increase for drug (TCM) price this year was about 20 percent with the worst raised four to five times. "Usually it's normal to go through some high and low, but such an insane jump is abnormal," Fang said.

In contrast to the TCM material balloon is the incredibly low drug price restriction because of new health care reform. Many pharmaceutical manufacturers are forced to stop certain drugs' production lines or survive the current situation while losing money everyday.

"We're supplying local hospitals at a loss for some of drugs, and many of pharmaceutical factories like us are suffering a deficit," said Yang Lu, saleswoman from Anhui-based Fengyuan Pharmaceutical Co Ltd. "Everybody is holding on and expecting a change."

She added if her company dropped the production line, they would lose out anyway.

"It's illogic to set the drug price this way and reasons for that are simple," Fang said. "On one hand, our country doesn't have any control on the medicine material and on the other hand strict rules stick to the patent medicine."