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Tainted cancer drug from China

7th February 2008

A contaminated anticancer drug made by one of China's largest pharmaceutical firms points up how quality-control problems plague the Chinese drug industry, write Nicholas Zamiska and Avery Johnson in The Wall Street Journal.

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This case offers a cautionary tale for Western firms, which have begun outsourcing some manufacturing to China.

A number of safety problems involving Chinese-made products has surfaced over the last year, mostly involving small-scale factories operating with little scrutiny. But the tainted leukemia drug was made by a subsidiary of one of China's leading drug companies, Shanghai Pharmaceutical (Group) Co. Other units of the company make medicines in collaboration with a number of multinational drug companies, although there is no sign that the quality-control problems affected other divisions - and no evidence that the tainted drug was exported.

Major international drug companies are moving to conduct research and some manufacturing in China, as costs in the United States rise and hurdles to bringing new drugs to market remain. AstraZeneca plc, GlaxoSmithKline plc, Pfizer Inc, and Bristol-Myers Squibb Co all plan to outsource some of their manufacturing.

While China is a small player in exporting finished pills, it’s the world's largest producer of active pharmaceutical ingredients (APIs), the chemicals needed to produce drugs. In 2005, China had US$4.4 billion, or 14%, of the world's US$31 billion market for APIs. That places it ahead of Italy and India, the world's second- and third-largest players respectively, Credit Suisse said in 2007.

Shanghai Pharma has joined forces with a number of multinational drug companies over the years and says it exports APIs around the world. Signs of problems with the same drug have cropped up elsewhere in the country. In September, the State Food and Drug Administration banned the use of Hualian's injectable methotrexate, along with another drug made by Hualian called cytarabine hydrochloride.

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