China’s vaccine scandal a shot in the arm for foreign firms

A major vaccine scandal, which has created uproar in China this week, might force President Xi Jinping’s government to further open up the pharmaceutical sector to global players.

Amid the carnage of fabricated production data and faulty quality control, confidence in the domestic drugs industry has hit rock bottom after Changsheng Biotechnology sold more than 250,000 sub-standard rabies vaccines.

On Wednesday, it emerged that authorities in the northeast city of Changchun, where the company has its headquarters, had arrested 15 people, including the company’s chairwoman, on “suspicion of criminal offenses.”

As outrage spread across social media, Xi was forced to issue a statement during his trip to the Middle East and Africa before heading to the BRICS summit in Johannesburg. “[This was] vile in nature and shocking,” he told the state media and demanded a thorough investigation.

But his remarks have failed to stop calls on China’s heavily censored social media platforms to increase safety procedures and stamp out corruption.

To add to the furor, regulators have since confirmed that Changsheng had shipped a separate sub-standard vaccine for diphtheria, whooping cough and tetanus for children, selling 250,000 vials to Shandong province last year.

“The latest in a litany of food and drug safety scares, the Changsheng case has sparked both intense criticism of the Chinese government’s ability to regulate the space at home, and concerns about China’s recent push to market pharmaceuticals abroad,” Viola Rothschild, a research associate in Asia Studies at the Council on Foreign Relations, a think tank based in Washington, said in a blog post.

“To make matters even worse, the Changsheng incident also comes hot on the heels of another unsettling revelation. Just a few weeks ago, China’s Zhejiang Huahai Pharmaceutical recalled a heart and blood pressure drug sold in the United States and Europe after finding that it [may be] tainted with an impurity linked to cancer,” she added.

This, in turn, could force China to increase access to foreign pharmaceutical companies to bolster public trust after share prices of major mainland drugs companies took a massive hit.

So far, Hong Kong clinics have reported a surge in demand for children’s vaccine, the Medical Xpress, an online medical and health news site, has reported.

“It could be a new opportunity for foreign vaccine producers to make a bigger mark,” FiercePharma, an internet portal dedicated to the pharmaceutical industry, stated in a report.

Last year, China was the world’s second-largest healthcare market, worth US$122.6 billion, IQVIA, a major medical and information company, revealed. The country is also the biggest emerging market for pharmaceuticals with growth predicted to expand from $145 billion to $175 billion by 2022.

Yet one worried Chinese woman quoted by AFP summed up the sector in a harrowing sentence. “I don’t trust the vaccines here anymore,” Zhou, who only gave her family name, said as she waited with her young daughter at a pediatric clinic in Beijing.

Judging by the online outcry, she is not the only one who has lost faith in the industry.