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China's vaccine scandals must trigger deeper health care reforms

Beijing should open up and treat whistleblowers as heroes, not troublemakers

| China

Chinese social media in recent weeks have been flooded with angry posts from parents wondering whether their children received substandard vaccines amid reports that some companies had used expired ingredients and doctored testing records.

Although the substandard rabies and diphtheria, pertussis and tetanus (DPT) vaccines have not been linked to any deaths, public fear and furor has reached a level not seen since airborne particulates peaked in China a few years ago prompting widespread anger about urban pollution.

Parents have boldly protested outside the offices of the National Health Commission while police have announced the arrests of the chairwoman and 17 other executives of Changsheng Bio-technology, the Shenzhen-listed drugmaker at the center of the scandal.

The uproar stems from the convergence of a host of issues confronting China today: corruption, moral decline, loopholes in internal corporate controls, weak regulatory capacity, and a lack of accountability.

According to domestic media reports, a businesswoman named Gao Junfang wrested control of Changsheng from a state-owned company more than a decade ago. As chairwoman, she then set about boosting profit margins, with the result that managers turned a blind eye to the improper mixing of drug ingredients, the use of expired materials, the forgery of production and testing records and other misconduct, according to early findings by government investigators. Gao has not been heard from since her arrest.

Changsheng's vaccines in turn won a prominent place in the government-sponsored national immunization program, which was effectively closed to foreign drugmakers. The country's central drug procurement system, under which provincial disease control directors have a final say over which companies' products are bought, also became a key Changsheng customer.

According to a review of court judgments by Chinese news publication The Paper, Changsheng has in recent years been named in 12 bribery cases in the provinces of Anhui, Henan, Fujian and Guangdong. In one of the Henan cases, a Changsheng salesman admitted to paying a provincial health official more than $24,000 to use the company's vaccines. The fraud was uncovered after tipoffs from company employees, with Changsheng ultimately fined 3.44 million yuan ($500,000).

The Changsheng scandal is hardly the first of its kind. Just since 2004, China has experienced at least 10 vaccine safety scandals. While previous ones appeared localized to specific companies or geographic areas, this case has had a more profound public impact as it has suggested there are systematic safety risks across China's entire vaccine industry.

While Changsheng has been the center of attention, regulators have also found fault with 400,000 vaccine doses from the state-owned Wuhan Institute of Biological Products.

Given the nationwide marketing networks of Changsheng and the Wuhan Institute, it is very likely that their substandard vaccines were administered in areas beyond the three markets so far identified, namely the city of Chongqing and the provinces of Hebei and Shandong.

Meanwhile, hard-won trust in domestically manufactured vaccines is dissipating along with confidence in the government's touted "world-class whole life cycle regulation system." While well-to-do parents are talking about taking their children overseas for vaccinations, others are questioning the necessity of vaccination at all. It is safe to say that the current scandal amounts to the worst public health crisis in years since the 2008 scare over melamine contamination of infant formula.

Chinese leaders have been forced to respond, with President Xi Jinping and Premier Li Keqiang each calling for thorough investigations and severe punishment of all involved.

The government of Jilin Province, where Changsheng is headquartered, is also probing potential corruption in the original transfer of assets under which Gao Junfang took control of Changsheng.

To limit the wider impact on social and political stability, the government seems more focused on damage control than on cleaning up the scandal-ridden vaccine industry. Officials have reportedly restricted news coverage and censors have swiftly scrubbed away widely shared essays and posts criticizing the government or spreading bad news. Even news reports from state-owned publications, such as an investigation into Wuhan Institute's substandard vaccines by the newspaper Economic Observer, have been taken down.

What Beijing should do instead is to engage with all key stakeholders to strengthen vaccine safety. Officials should actively seek the input and involvement of the public, the industry and the press in exposing, investigating and penalizing irregularities and violations.

This would require treating whistleblowers as heroes, not as troublemakers. It would also mean introducing more transparency in the regulation of vaccine safety. Public discussion on vaccine safety should be channeled in a way that facilitates information flow and increased accountability in the policy process rather than rely on top-down, state-centric regulation.

It is worth noting that none of China's vaccine scandals have involved foreign manufacturers. Opening the vaccine market to foreign competition would force domestic manufacturers to produce safer and more effective vaccines. The government should facilitate the entry of foreign vaccines by accelerating the approval process, which can now drag on for as long as 10 years. Key measures would include accepting clinical trial results conducted overseas and easing the renewal of import licenses.

These reform ideas are not new. Nevertheless, translating them into policy practice remains a daunting task given the current political atmosphere in China. In the absence of broader, systematic solutions, appalling scandals like this may continue to recur.

Yanzhong Huang is a professor in Seton Hall University's School of Diplomacy and International Relations and an adjunct senior fellow for global health at the Council on Foreign Relations.

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