Flagged by FDA in 2018, Controversial China Drug Manufacturer Gets Pfizer Paxlovid Contract

Pfizer taps Chinese drug manufacturer previously under FDA ban to produce Covid-19 drug Paxlovid


Zhejiang Huahai Pharmaceutical Co. received a Warning Letter from the FDA in November 2018 after a carcinogen was found in an active pharmaceutical ingredient (API) called Valsartan used in blood pressure medication.


The FDA also criticized the lab for failing to act on a customer complaint in 2016 about the suspected carcinogen in its valsartan API. Following the 2018 global recall of blood pressure medications produced by Huahai, the FDA banned drugs from one of its labs in Chuannan.


The FDA lifted its ban last year. This month, Pfizer gave Zhejiang Huahai a contract to manufacture its Covid-19 oral antiviral Paxlovid, for the next five years. The product will only be sold in China, meaning U.S. labs were not considered a competitor for the contract.


Paxlovid became the first foreign branded antiviral treatment for Covid to receive emergency use authorization from China’s version of the Center for Disease Control back in February. Pfizer has long been a huge investor in China, building a $350 million biotech park that was completed in 2018.


Although the Paxlovid deal is not for export, the Pfizer arrangement highlights global pharma’s vested interest in the mainland Chinese drug market, making it harder for Washington to legislate reshoring medicines. Despite a smudge on its record four short years ago, Pfizer chose Zhejiang instead of nearby labs in South Korea, or even Japan.


China is set to become a huge player in the contract manufacturing market (CMO), a market which is leading to the closing of some manufacturing facilities in the U.S. and Europe to offshore production and research to mostly Asian labs. While the U.S. can pick up a lot of this market as well, it is clear that China is poised to be a dominant player in the CMO market in the near future. Given global pharma’s interest in the mainland China market, it seems plausible that these same companies would turn to China for outsourced lab work, especially to serve the Asian market.


China’s pharmaceutical industry has experienced rapid growth since its ascension to the World Trade Organization in 2001.


As of 2021, China accounts for roughly 12% of the global pharmaceutical market, following the United States, and is responsible for 40% of total pharmaceutical revenue worldwide.


According to Xinhua newswire, the Chinese pharmaceuticals market generated 708.75 billion RMB in 2021, while Chinese domestic pharmaceutical companies reported a combined $502 billion (3.37 trillion RMB) in revenue last year.


China’s government wants the domestic biotech industry to take a leadership role in the global pharmaceutical marketplace, according to its most recent Five-Year Plan. In the meantime, China remains a high-volume contract manufacturer for American (and European) drug developers, as well as a strategic partner in research and development of new drugs. China is also working to develop new drugs and, thanks to government support and policies to boost manufacturing, is working to become a top rival to Western makers of new treatments across drug segments.


Generic medicines account for roughly 90 percent of all prescriptions dispensed in the U.S. and are critical to our nation’s health care system and hundreds of millions of Americans. Unfortunately, the U.S. is dangerously dependent on foreign manufacturers—particularly in China and India—for essential, lifesaving generic medicines. Since 2002, imports from India have increased 35x, while the floodgates have opened to allow imports from China to rise to an astounding 165x their 2002 levels.


Unless Congress gets serious about reshoring domestic manufacturing of generic drugs—and supporting American manufacturers that currently have to compete with government-subsidized foreign producers—our nation’s dependence on China and India will continue to pose a serious risk.


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We are a group of doctors, patients, health care industry experts, and advocates fighting to ensure all generic medicines are safe, affordable, and always available. Unsafe generic drugs from foreign manufacturers in China and India have been sold in the U.S that have been contaminated with carcinogens and fake ingredients, fall apart when tested, and don’t work as they should. We are fighting back to ensure all generic medicines are safe, affordable, and always available. We want every American to be able to trust the generics they take—every pill, every vial, every time.