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Asia Regulatory Roundup: China Charges Vaccine Manufacturer $1.3B for Quality Failings

Posted 23 October 2018 | By Nick Paul Taylor 

Asia Regulatory Roundup: China Charges Vaccine Manufacturer $1.3B for Quality Failings

Welcome to our Asia Regulatory Roundup, our weekly overview of the top regulatory news in Asia.
 
China Charges Vaccine Manufacturer $1.3B for Quality Failings
 
China has charged Changchun Changsheng Biotechnology RMB 9.1 billion ($1.3 billion) for the quality failings behind the recent vaccine scandal. The penalty is 16 times the net profit Changsheng made in 2017 and far larger than the punishments typically imposed on vaccine manufacturers.
 
Changsheng entered the crosshairs of Chinese regulators earlier this year when inspectors found it had produced rabies and DPT vaccines using out-of-date active pharmaceutical ingredients and failed to run tests at the appropriate point in the process. To compound matters, the inspectors accused the firm of forging production data and issuing false confirmations of tests. The findings, which follow on from earlier vaccine scandals, led to public protests.
 
Chinese authorities have spent the past few months trying to show the situation is under control and alleviate concerns about vaccine safety in general. Now, the government has sent a message to the industry by hitting Changsheng with a record fine.
 
The Food and Drug Administration in the Chinese province of Jilin confiscated RMB 1.89 billion from Changsheng to recoup money the company made from the sale of the substandard vaccines. With the government also imposing a fine of RMB 7.21 billion on Changsheng, the financial penalty comes in at RMB 9.1 billion. The Chinese securities regulator is fining Changsheng a further RMB 600,000.
 
The penalty is large in the context of Changsheng’s business. With the scandal crushing its share price, Changsheng had a market capitalization of RMB 3.2 billion when trading of the stock stopped at the end of August. Changsheng made net profits of RMB 566 million in 2017.
 
The penalty is also large in the context of the history of fines in China. When Changsheng was first found to have produced substandard vaccines one year ago, its financial penalty totaled RMB 3.4 million. The huge difference between the two fines stems from the values of the vaccines sold. In October, authorities confiscated RMB 858,840 and fined three times that amount. Authorities used the same multiplier to calculate the latest fine, but the value of the seized income was much higher.
 
In some cases, the law permits the use of a bigger multiplier. For example, the changes to vaccine distribution imposed following an earlier scandal allow authorities to impose fines of up to five times the value of the affected products.
 
Chinese authorities released details of the Changsheng fine alongside information about other ways they are punishing the people behind the scandal. Regulators have banned 14 executives from working in the pharmaceutical sector and are considering criminal charges. The securities regulator is also hitting some of the executives with lifetime bans.
 
CNDA Notice, CNDA Decision, Compensation Plan, The Financial Times
 
Australian High Court Sides With Pfizer in Lipitor Competition Case
 
The Australian High Court has dismissed the national competition regulator’s case against Pfizer. The Australian Competition and Consumer Commission (ACCC) wanted the court to overturn an earlier ruling that found Pfizer had not tried to substantially lessen competition in the statin market.
 
The case dates back to when Pfizer’s statin blockbuster Lipitor lost patent protection in 2012. Early that year, Pfizer offered discounts and the release of rebates related to prior sales of Lipitor. Pharmacies could receive the financial perks if they bought a certain volume of Pfizer’s generic version of Lipitor and restricted their resupply of copies of the drug sold by other companies.
 
In 2014, ACCC accused Pfizer of misusing its market power and performing “exclusive dealing conduct with the purpose of substantially lessening competition in the market for atorvastatin.” The following year, a court ruled against ACCC, finding Pfizer lacked “substantial” market power when it made the offer to pharmacies. The court also found ACCC failed to show that Pfizer offered the discounts and rebates to substantially lessen competition or stop its rivals from competing.
 
The ACCC wanted to appeal the case. However, the High Court dismissed the watchdog’s special leave to appeal the earlier ruling. The decision by the High Court brings ACCC’s legal pursuit of Pfizer to an end.
 
ACCC Notice
 
TGA Extends Suspension of Paragon Device as Heater-Cooler Review Nears End
 
Australia’s Therapeutic Goods Administration (TGA) has extended its suspension of Paragon Healthcare’s blood temperature management device until April. The decision makes Paragon’s Hemotherm CE the only heater-cooler device still subject to TGA safety review.
 
TGA began looking into the safety of heater-cooler devices, which control the temperature of blood sent to cardiopulmonary bypass machines during surgery, after learning of cases of Mycobacterium chimaera infection. When TGA issued an alert about the risk in 2016, it knew of one case of infection in Australia and more overseas. Since then, TGA has continued to gather case reports while assessing the safety of heater-cooler devices available in Australia.
 
In its latest notice, TGA revealed that nine Australians have become infected after undergoing heart surgery involving LivaNova’s Stöckert Heater-Cooler 3T heater-cooler unit. TGA thinks the water tanks of the affected units became contaminated with bacteria, which then became airborne and infected patients during surgery.
 
LivaNova responded to the cases by making a disinfectant available and modifying existing devices to stop them from dispersing contaminated aerosols. The changes led TGA to lift a suspension it placed on the LivaNova device.
 
With TGA having already reviewed other devices and either lifted their suspensions or canceled their registration, there is now one heater-cooler still subject to review. TGA suspended the supply of the device, which Paragon sells in Australia on behalf of Cincinnati Sub Zero Products, in April for six months. This month, TGA extended the suspension by six months, likely keeping it off the market until April.
 
TGA Notice
 
TGA Creates Template Forms to Encourage Doctors to Report Adverse Events
 
TGA has created template forms for reporting adverse events. The templates are designed to make it easier for general practitioners (GPs) to submit information to TGA when patients in their care suffer side effects.
 
In theory, GPs are well placed to learn about and report adverse events. These doctors are often the first healthcare professionals patients see when they start suffering from symptoms. In some cases, the GP will treat the patients themselves. For more serious diseases, GPs often refer patients to specialists. These patients return to GPs for other health conditions, though.
 
Yet, while GPs see a large number of patients who take a range of drugs, as monotherapies and in combination, they submit relatively few adverse event reports. In 2017, GPs filed 579 reports, around 3% of all submissions made in the country. Both figures have declined in recent years. In 2013, GPs filed 733 reports, making them responsible for around 4% of all submissions.
 
TGA lacks the power to impose mandatory reporting requirements on GPs, but it can make it easier for doctors to file reports. With that goal in mind, TGA has created adverse event template forms.
 
GPs can install the templates in their desktop software. That done, the system will prepopulate most of the fields when a GP goes to report an adverse event. The GP only needs to add the names of the drugs suspected to have caused the reaction and details of the adverse event itself.
 
TGA Notice

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