China Yongxin Pharmaceuticals Inc. (CYXN.OB) today announced it has initiated use of its Electronic Diagnosis System throughout chain drugstores in Changchun, Jilin, as part of an effort to curb the abuse of prescription in the Jilin province.

The system provides a network for doctors to provide diagnosis services through an integrated video and audio system, allowing customers to immediately purchase treatment prescribed by the doctors in Yongxin’s chain drugstores. The company said the system reduces errors, improves efficiency, and will help thwart fake prescriptions.

According to China Yongxin, the system is the first of its kind to be introduced in the Jilin province. According to the company, if all goes well and the product is well received, it will initiate long-term plans to supply the system to all future and existing stores.

In the press release, Yongxin Liu, chairman and CEO of China Yongxin, said the company anticipates the Electronic Diagnosis System to become a key part of the company’s future and its position in the marketplace.

“We are very pleased to announce the launch this system, which has proven through trials to be a safe, reliable, convenient and efficient way to provide both medical diagnosis and prescription services to our retail patient customers. The system further improves the level of service and convenience we provide, and we expect it to be a significant driver to the future growth of our retail business,” Liu stated.

The technology received positive review from Yan Jiangyin, spokesperson and vice chief of Politics & Law Department of China’s State Food and Drug Administration, as well as coverage from Chinese Central TV, Chinese Medicine Newspaper, and other media outlets in the province.

China Yongxin expects the device to boost its revenues associated with prescription drugs, and will allow the company to extend its reach to more chain drug stores in northern China.

“During first 9 months of 2008, revenues generated from prescription drugs represented approximately 25% of total drugstore sales and contribute gross margins of approximately 23.5%. We expect revenues from prescription drugs in these stores equipped with this system to increase by approximately 20% during the next year as the market adopts this new service offering. Our focus on further improving the quality of our service combined with expanding the number of chain drugstores we operate will enable us to gain incremental market share in Northern China and position the company for continued future growth,” Liu stated.