Bitter pill: China scandal scandal sparks online fury, roils markets

SHANGHAI (Reuters) – A vaccine scandal in China, which has prompted angry reactions from leaders and citizens in the country, is sending drugs to the local drug market and threatening 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

Changsheng has been discovered to be a child of the world, and has not seen it before. aims to promote locally made vaccines globally.

While there was no apparent reports of people being harmed by the vaccine, the regulator ordered

The case has gone viral in China, where sensitivity and food safety are extremely high after a scandal over the last decade. Sina Weibo on Monday is one of the most hotly discussed topics on microblogging.

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 apologized in a regulatory filing and said the suspension of its vaccine would have a significant impact on its finances. It added some regional disease control agencies had suspended some of its other vaccines.

It also flagged on Monday that the firm may face the risk of having to investigate China's securities regulator.

This is, however, not Changsheng's first brush with quality issues. Last year, it sold 252,600 DPT vaccines to inoculate children against diphtheria, whooping cough and tetanus, a regulator in the northeastern Jilin said on Friday.

China's pharmaceutical industry has been plagued with such scandals, with another company Wuhan Institute of Biological Products also being implicated in the DPT vaccine issue last year and the police busting a gang for selling around $ 90 million worth of illegal vaccines on the black market in 2016.

Changsheng shares, which resumed trading on Monday afternoon after being suspended in the morning, were down 10 percent. They have slumped 47 percent since mid July.

The wider CSI 300 healthcare index was down about 5 percent.

The China Daily warned earlier in the editorial that the latest Changsheng case could become a public health crisis if it is not handled "in a reasonable and transparent manner".

The government wants to let the public know it "would punish any wrongdoers without mercy", the official newspaper wrote.

Xinhua ran an editorial calling for strict punishment for any violations, in the closures of the industry.

The state-run Global Times also weighed in, saying the case had "sparked nationwide outrage, (and) could pose serious challenges for a domestic industry that has seen rapid growth in recent years but experienced a series of scandals".

($ 1 = 6.7659 Chinese Yuan)