Company in China’s Vaccine Scandal Violated Rules Since 2014, Xinhua Reports
Company in China’s Vaccine Scandal Violated Rules Since 2014, Xinhua Reports
(Bloomberg) -- The Chinese pharmaceutical company at the center of a vaccine scandal violated rules for more than four years, and a recall of affected overseas shipments has begun.
A State Council investigation found Changsheng Bio-technology Co. infringed standards starting from as far back as April 2014 on a rabies vaccine, according to a Xinhua report posted on the government’s website. Investigators said the company used expired materials for some batches, while some production dates marked on products were false. A portion of the vaccines involved were sold abroad, and China has taken steps to recall them.
The findings may further fuel consumer outrage that was sparked by revelations last month that Changsheng and another drugmaker sold low-quality vaccines for infants. Protesters have picketed government offices and worried parents have run to Hong Kong for foreign-made vaccines.
A Changsheng representative couldn’t immediately be reached for comment.
Overseas sales made up 2.3 percent of Changsheng’s revenue in 2017, with its vaccines sent to countries including India, Cambodia, Egypt and Belarus, according to financial records.
While the portion of Changsheng products sold overseas is small, the incident could have an impact if regulatory authorities in other countries start to increase scrutiny of Chinese-made vaccines, said Milo Liu, head of research at AJ Securities Ltd.
“But the impact would be mild compared to the current turmoil within China,” he added.
Changsheng said in mid-July that it halted rabies-vaccine production following a government order, after regulators found the company fabricated production and inspection data. It was also fined for having produced low-quality vaccines for children. Regulators separately found state-owned Wuhan Institute of Biological Products Co., another vaccine maker, produced more than 400,000 low-quality infant vaccines, according to Xinhua.
The scandal has sent Changsheng shares on a downward spiral, losing more than 70 percent since July 13. The stock lost 5 percent on Wednesday. The fallout has spread beyond vaccine makers, with all health-care companies trading on the Shanghai Shenzhen CSI 300 index lower since the scandal began.
A Credit Suisse report published Wednesday said the impact on China’s health-care stocks in reaction to the scandal is exaggerated, noting the industry’s fundamentals are unchanged with solid earnings growth and faster drug approvals.
--With assistance from Daniela Wei.
To contact Bloomberg News staff for this story: Rachel Chang in Shanghai at wchang98@bloomberg.net
To contact the editors responsible for this story: K. Oanh Ha at oha3@bloomberg.net, Jeff Sutherland, Subramaniam Sharma
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