Chance for global vaccine makers? China’s latest vaccine scandal sparks fury and fear

The bad news: China’s latest vaccine scandal, with its second-largest rabies vaccine maker at front and center, went berserk on social media over the weekend. Citizens raged about the company’s manufacturing misconduct and expressed an even broader distrust in locally made vaccines.

The good news, for multinational vaccines makers at least? That anger and skepticism may offer an opportunity to expand their meager market share in China.

As the Chinese government scrambles to contain one of the largest public health crises in years, drug and stock regulators have launched investigations and Chinese Premier Li Keqiang issued a harshly-worded decree that ran, along with editorial pieces, in all major state media outlets.

Li, in a statement (Chinese) published on Sunday, said the vaccine safety incidents crossed a "moral red line," adding that the country deserves a clear explanation. He also directed the State Council—China’s government body—to send a team to thoroughly investigate the entire chain of vaccine production and sales, and swore severe punishment on whomever is involved. China’s State Drug Administration promised surprise inspections on all 45 China-based vaccine manufacturers.

Outrage flooded online platforms after Changchun Changsheng Life Sciences was found last week to have fabricated production data on its rabies vaccines. Hackers went after the company Monday, emblazoning its website with a message of condemnation. On China’s popular social media app WeChat, the Chinese word vaccine appeared in more than 321 million searches and articles on Sunday alone, a huge spike from about 4 million last Friday, according to WeChat’s own data. 

China’s State Drug Administration said in a July 15 release that it had pulled the company’s GMP license for the vaccine and ordered it to stop production. No vaccine under question had been released for sale, the drug regulator and the company both said, but all of its unexpired rabies vaccines are being recalled, and reserved samples are under testing for efficacy. 

The public scrutiny also focuses on a previous incident when the company sold 252,600 doses of substandard acellular DPT (diphtheria/pertussis/tetanus) vaccines meant for children under the country’s compulsory vaccination program. In the wake of the latest rabies scandal, the drug regulator in Jilin province—where Changsheng is based—finally meted out punishment in the DPT affair, almost nine months after the initial finding, and fined the company 3.44 million Chinese yuan (about $500,000).

Health authorities assured the public that the questionable vaccines, though perhaps ineffective, are stil safe. But widespread public concern remains. Worried parents checked their children’s immunization records for past inoculations with Changsheng-made vaccines. Parents interviewed by the South China Morning Post said they had lost confidence in vaccines made in China, echoing a similar sentiment circulating online.

One of few countries self-reliant on key vaccines, China has only imported 2% to 2.5% of vaccines each year since 2015, according to the 2017 annual report by the country’s National Institutes for Food and Drug Control (NIFDC), which is responsible for vaccine examination before release. 

Changsheng is one of the country’s largest vaccine makers. According to its 2017 annual report and a revised disclosure to Shenzhen Stock Exchange, the company delivered 3.69 million courses of rabies vaccines and 3.60 million courses of chickenpox vaccines, both the second-largest numbers in the Chinese market. It also sells vaccines against hepatitis A, influenza and Group ACYW meningococcal. 

The latest scandal has put another hole in the country’s vaccine industry already tainted with similar scandals. Shares of Changsheng’s parent company have been falling the daily maximum limit of 10% for several consecutive market days, for a cumulative slide of almost 50% since mid-July. The outcry also has rippled through the entire domestic vaccine market. Major providers Walvax, Kangtai and even Zhifei—which sells Merck’s Gardasil and Gardasil 9 in China—all saw their share prices hit the 10% bottom on Monday.

It could be a new opportunity for foreign vaccine producers to make a bigger mark, though they have their own problems. Last year, NIFDC rejected 16 batches of vaccines, 14 batches from foreign makers. The product that drew the most attention was Sanofi Pasteur’s Pentacel, which protects against five diseases. NIFDC found eight batches of the shot’s tetanus component were not effective enough and suspended import of the pentavalent vaccine, leading to a national shortage. Sanofi attributed the inferiority to its change of aluminum adjuvant provider, according to NIFDC’s report.

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