‘Made in China’ – a Badge of Dishonour? | PharmaBoardroom

‘Made in China’ – a Badge of Dishonour?

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One of China’s biggest vaccine manufacturers was found to have falsified rabies vaccine records causing nationwide parenting chaos. Executives from China’s second largest pharmaceutical company, ChangSheng biotechnology (Changsheng literally translates to ‘Long Life’) in Northeast China, admitted to having falsified records for over 250,000 substandard vaccines for DPT (diphtheria, pertussis, and tetanus), fifteen of whom have now been arrested.

“Following the most recent debacle, parents across China have resorted to sourcing their children’s vaccines in Hong Kong and safer bordering countries as the ‘Made in China’ label continues to cause uncertainty and, in some cases, harm.”

The company was fined, ordered to halt all rabies vaccine production and made to recall affected doses. Premier Li Keqiang was obliged to intervene, pledging to crack down on threats to public safety and subsequently ordering a thorough investigation. According to Li, all companies that produce vaccines will now be subject to unannounced inspections to crack down on illegal practices because these vaccines crossed a ‘moral line.’

This scandal serves as another chapter in China’s colorful pharmaceutical and life sciences consumer goods production history. In 2008, six children died, and 300,000 fell ill after drinking milk powder tainted with melamine, a case that officials had initially covered up. In 2016, police in Shandong province found $90mUSD (77mEUR) in vaccines had been improperly stored and sold throughout the country. And, as recent as July this year, a heart drug made by Zhejiang Huaihai Pharmaceutical was recalled after regulators in the EU and the US discovered that the active substance, Valsartan, had become contaminated with an impurity linked to cancer.

Following the most recent debacle, parents across China have resorted to sourcing their children’s vaccines in Hong Kong and safer bordering countries as the ‘Made in China’ label continues to cause uncertainty and, in some cases, harm.

But what are the wider implications for the world’s second-largest prescription drug market, particularly for pharmaceutical companies with manufacturing ties to China?  So much for the “Made in China 2025” industrial plan, where China sought to reinvent its pharmaceutical industry. President Xi Jinping identified his country’s dependence on foreign drug imports as a critical issue; and in the face of an aging population and a swelling middle class that now turn to healthy living and wellbeing, Xi intends to clean up the Chinese pharmaceutical industry’s act, in turn creating greater output while countering its overreliance on multinational firms.

Moreover, 2017 was a good year for pharmaceutical reform in China. The Chinese government introduced a round of policies influencing both healthcare and pharmaceuticals ranging from better drug control, adjuvant drug monitoring, and an increase in safety and testing requirements, particularly within R&D. Plus, biopharma became the second largest investment market in China in 2017, behind only information technology. President and Managing Director of Young & Partners (Chemical and Life Sciences Investment Banking), Peter Young, comments that there has been “a forced clean-up of manufacturing practices that significantly improved the reputation of Chinese-sourced active pharmaceutical ingredients (APIs) and fine chemicals.”

Still, the ‘Made in China’ brand continues to affect confidence, and every scandal, counterfeit case and slip up in standards plummets public trust and adds credence to people’s prejudices of China being a cheap, low-quality country. Foreign investors are understandably concerned, as each falsified test and botched vaccination serves to tarnish a nation’s population, further distancing China from its coveted reputation as a land of clean and safe pharmaceutical practice.

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