China prepares for big entry into vaccine market

GILLIAN WONG

Asso­ci­ated Press

BEIJING — The world should get ready for a new Made in China prod­uct — vaccines.

China’s vac­cine mak­ers are gear­ing up over the next few years to push exports in a move that should lower costs of life­sav­ing immu­niza­tions for the world’s poor and pro­vide major new com­pe­ti­tion for the big West­ern phar­ma­ceu­ti­cal companies.

How­ever, it may take some time before some parts of the world are ready to embrace Chi­nese prod­ucts when safety is as sen­si­tive an issue as it is with vac­cines — espe­cially given the food, drug and other scan­dals the coun­try has seen.

Still, China’s entry into this mar­ket will be a “game changer,” said Nina Schwalbe, head of pol­icy at the GAVI Alliance, which buys vac­cines for 50 mil­lion chil­dren a year worldwide.

“We are really enthu­si­as­tic about the poten­tial entry of Chi­nese vac­cine man­u­fac­tur­ers,” she said.

China’s vaccine-making prowess cap­tured world atten­tion in 2009 when one of its com­pa­nies devel­oped the first effec­tive vac­cine against swine flu — in just 87 days — as the new virus swept the globe. In the past, new vac­cine devel­op­ments had usu­ally been won by the U.S. and Europe.

Then, this past March the World Health Orga­ni­za­tion announced that China’s drug safety author­ity meets inter­na­tional stan­dards for vac­cine reg­u­la­tion. It opened the doors for Chi­nese vac­cines to be sub­mit­ted for WHO approval so they can be bought by U.N. agen­cies and the GAVI Alliance.

“China is a vaccine-producing power” with more than 30 com­pa­nies that have an annual pro­duc­tion capac­ity of nearly 1 bil­lion doses — the largest in the world, the country’s State Food and Drug Admin­is­tra­tion told The Asso­ci­ated Press.

But more needs to be done to build con­fi­dence in Chi­nese vac­cines over­seas, said Helen Yang of Sino­vac, the NASDAQ-listed Chi­nese biotech firm that rapidly devel­oped the H1N1 swine flu vac­cine. “We think the main obsta­cle is that we have the name of ‘made in China’ still. That is an issue.”

China’s food and drug safety record in recent years hardly inspires con­fi­dence: in 2007, Chi­nese cough syrup killed 93 peo­ple in Cen­tral Amer­ica; one year later, con­t­a­m­i­nated blood thin­ner led to dozens of deaths in the United States while tainted milk pow­der poi­soned hun­dreds of thou­sands of Chi­nese babies and killed six.

The gov­ern­ment has since imposed more reg­u­la­tions, stricter inspec­tions and heav­ier pun­ish­ments for vio­la­tors. Per­haps because of that, reg­u­la­tors rou­tinely crack down on coun­ter­feit and sub­stan­dard drugmaking.

While wel­com­ing WHO’s approval of China’s drug safety author­ity, one expert said it takes more than a reg­u­la­tory agency to keep drug­mak­ers from cut­ting cor­ners or pro­duc­ing fakes.

“In the U.S., we have sup­port­ing insti­tu­tions such as the mar­ket econ­omy, democ­racy, media mon­i­tor­ing, civil soci­ety, as well as a well-developed busi­ness ethics code, but these are all still pretty much absent in China,” said Yanzhong Huang, a China health expert at the Coun­cil on For­eign Rela­tions. “For China, the chal­lenge is much greater in build­ing a strong, robust reg­u­la­tive capacity.”

Last year, a Chi­nese news­pa­per report linked improp­erly stored vac­cines to four children’s deaths in north­ern Shanxi province, rais­ing nation­wide con­cern. The Health Min­istry said the vac­cines did not cause the deaths, but some remained skeptical.

Mean­while, Chi­nese researchers reported in the New Eng­land Jour­nal of Med­i­cine ear­lier this year that a pan­demic flu vac­cine given to 90 mil­lion peo­ple in 2009 was safe.

WHO’s med­ical offi­cer for immu­niza­tion, Dr. Yvan Hutin, said WHO’s approval of the Chi­nese drug reg­u­la­tory agency is not “a blank check.” Each vac­cine will be eval­u­ated rig­or­ously, with WHO and Chi­nese inspec­tors given access to vac­cine plants on top of other safety checks, he said.

Vac­cines have his­tor­i­cally been a touchy sub­ject in the West­ern world, rife with safety con­cerns and con­spir­acy the­o­ries. Wor­ries about vac­cine safety resur­faced in the late 1990s trig­gered by debate over a claimed asso­ci­a­tion between the vac­cine for measles, mumps and rubella and autism. The claim was later discredited.

For China, the next few years will be cru­cial, as biotech com­pa­nies upgrade their facil­i­ties and improve pro­ce­dures to meet the safety and qual­ity stan­dards — a process that is expected to be costly and chal­leng­ing. Then they will sub­mit vac­cines to the U.N. health agency for approval, which could take a cou­ple of years.

First up is likely to be a home­grown vac­cine for Japan­ese encephali­tis, a mosquito-borne dis­ease that can cause seizures, paral­y­sis and death. The vac­cine has been used for two decades in China with fewer side effects than other ver­sions. Its man­u­fac­turer expects WHO approval for it in about a year. Also in the works are vac­cines for polio and dis­eases that are the top two killers of chil­dren — pneu­mo­nia and rotavirus, which causes diarrhea.

Vac­cines also are a sig­nif­i­cant part of a $300 mil­lion part­ner­ship with the Bill & Melinda Gates Foun­da­tion for the devel­op­ment of new health and farm­ing prod­ucts for poor countries.

China’s entry into this field is impor­tant because one child dies every 20 sec­onds from vaccine-preventable dis­eases each year. UNICEF, the children’s agency and the world’s biggest buyer of vac­cines, has been in talks with Chi­nese com­pa­nies, said its sup­ply direc­tor Shanelle Hall. The fund pro­vides vac­cines to nearly 60 per­cent of the world’s chil­dren, and last year spent about $757 million.

World­wide, vac­cine sales last year grew 14 per­cent to $25.3 bil­lion, accord­ing to health­care mar­ket research firm Kalo­rama Infor­ma­tion, as drug­mak­ers which face inten­si­fy­ing com­pe­ti­tion from generic drugs now see vac­cines as key areas of growth, par­tic­u­larly in Latin Amer­ica, China and India.

China’s vac­cine mak­ers, some of whom already export in small amounts, are con­fi­dent they will soon become big play­ers in the field.

“I per­son­ally pre­dict that in the next five to 10 years, China will become a very impor­tant vac­cine man­u­fac­ture base in the world,” said Wu Yonglin, vice pres­i­dent of the state-owned China National Biotec Group, the country’s largest bio­log­i­cal prod­ucts maker that has been pro­duc­ing China’s encephali­tis vac­cine since 1989.

CNBG will invest more than 10 bil­lion yuan ($1.5 bil­lion) between now and 2015 to improve its facil­i­ties and sys­tems to meet WHO require­ments, Wu said. The com­pany also intends to sub­mit vac­cines to fight rotavirus, which kills half a mil­lion kids annu­ally, and polio for WHO approval.

Smaller, pri­vate com­pa­nies are also posi­tion­ing them­selves for the global market.

Sino­vac is now test­ing a new vac­cine for enterovirus 71, which causes severe hand, foot and mouth dis­ease among chil­dren in China and other Asian coun­tries. It is also prepar­ing for clin­i­cal tri­als on a pneu­mo­coc­cal vac­cine Yang says could rival Pfizer’s Pre­vnar, which was the top-selling vac­cine world­wide last year with sales of about $3.7 billion.

Pneu­mo­coc­cal dis­ease causes menin­gi­tis, pneu­mo­nia and ear infection.

“In the short term, every­one sees the export­ing oppor­tu­ni­ties, because out­side of China the entire vac­cine mar­ket still seems to be monop­o­lized by a few Big Pharma (com­pa­nies),” Yang said.

The entry of Chi­nese com­pa­nies is expected to fur­ther pres­sure West­ern phar­ma­ceu­ti­cal com­pa­nies to lower prices. Ear­lier this year, UNICEF’s move to pub­li­cize what drug­mak­ers charge it for vac­cines showed that West­ern drug­mak­ers often charged the agency dou­ble what com­pa­nies in India and Indone­sia do.

The aid group Doc­tors With­out Bor­ders crit­i­cized the vac­cine body GAVI for spend­ing hun­dreds of mil­lions of dol­lars on anti-pneumonia vac­cines from West­ern com­pa­nies, say­ing it could put its buy­ing power to even bet­ter use by fos­ter­ing com­pe­ti­tion from emerg­ing man­u­fac­tur­ers like those in China.

GAVI’s Schwalbe said the vac­cine body has to buy what is avail­able and nego­ti­ates hard for steep dis­counts. “We need to buy vac­cines now to save children’s lives now. We can’t wait.”

Posted by AP News on Nov 29 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.