China scandal ripples vaccine through domestic market, global push threatens

SHANGHAI (Reuters) – A vaccine scandal in China, which has hit the ground in the country and prompted reactions from leaders in Beijing, is sending ripples to the domestic drug market while threatening to dent Chinese ambitions to play a larger global role.

Shares in Chinese vaccine makers and biotech firms fell across the board on Monday after Premier Li Keqiang slammed Changsheng Biotechnology

The case erupted a week ago when Changsheng was found to be broken.

While there was no apparent reports of people being vaccinated or having contracted rabies after receiving it, the regulator has already ordered.

The case has gone viral in China, where sensitivity and food safety are extremely high after a series of scandals over the last decade. Changsheng's shares, which have lost 40 percent since mid July, were suspended on Monday.

The scandal has sparked anger on social media and dealt with a blow to China's drug regulator, which has struggled to clean up the world's second-biggest drug industry and promote domestically made vaccines.

It is also a setback for the country given a larger role in the production and export of vaccines and other medicines.

In a statement posted on the government's website late on Sunday, Premier Li called for an immediate investigation and urged severe punishment for the companies and people implicated. He added the public needed clear information.

"We will resolutely crack down on the law and endanger the lives of peoples, resolutely punish lawbreakers according to the law, and resolutely and severely criticize dereliction of duty in supervision," he said.

The China Food and Drug Administration said in a statement that it has found that Changsheng fabricated production records and product inspection records, and arbitrarily changed processes and equipment, in "serious violations" of the law.

PUBLIC HEALTH CRISIS

Changsheng said that the suspension of rabies vaccine production would have a significant impact on its finances and that some regional disease control agencies had suspended some of its other vaccines.

An editorial on Monday in the China Daily warned the case could become a public health crisis if it is not handled "in a reasonable and transparent manner".

"The government needs to act as soon as possible to make it public, and it will be resolved," said it.

Xinhua ran an editorial calling for strict punishment for any violations.

The China Securities News also weighs in, saying list companies have a duty to the public and to conduct business with integrity.

"Cases like Changsheng Biotechnology, where laws and regulations are ignored and internal controls exist only in a painful price," it said.

State media said Changsheng made a public apology and review all their rabies vaccine available on the market.

($ 1 = 6.7659 Chinese Yuan)