China spying laws prompt warning from pharma groups

ARJUN NEIL ALIM — FRANKFURT OLIVER BARNES — NEW YORK IAN JOHNSTON — LONDON · 22 Apr 2024

Western pharmaceutical groups are warning of worsening disruption to supply chains because of problems certifying manufacturing sites in China, with some factory inspectors refusing to visit the country over fears of arrest for spying and others denied entry to facilities.

China is one of the world’s largest makers of active pharmaceutical ingredients and antibiotics and an important supplier of drugs to the EU and US.

However, a tightening of anti-espionage laws by Beijing has led to concerns that foreign citizens gathering data on Chinese sites could be deemed spies.

Many inspectors from Germany, Europe’s largest inspectorate, are refusing to visit China for fear of arrest, said Fatima Bicane, manager of pharmaceutical technology at the German Medicines Manufacturers’ Association.

Meanwhile, official data seen by the Financial Times shows some US Food and Drug Administration inspectors have been refused entry to Chinese production sites since the pandemic.

This has led to western pharmaceutical regulators struggling to enforce oversight of Chinese manufacturers.

Drugs made in third countries and imported into the EU or US require certification by government inspectors and audits of production sites.

Disruption to inspections raises the risk of Chinese production sites losing their certification for western markets, exacerbating an already strained supply chain for generic pharmaceuticals.

“The big issue . . . is that our member companies, in order to bring active ingredients and finished drug products from China to the EU, need certification from certain authorities,” Bicane said. “But a large number of German inspectors are afraid to travel to China because of the new national security law.”

No western pharmaceutical inspectors have been arrested under China’s tightened laws. But a Japanese executive from Astellas Pharma was arrested last year in China on suspicion of espionage.

China’s Ministry of Foreign Affairs said: “China is a country ruled by law. All Chinese law enforcement and judicial activities are carried out based on facts and the law. As long as one abides by Chinese laws and regulations, there is no need to worry.”