China Is Becoming the Biggest Producer of Pharmaceutical Ingredients in the World


GARDINER HARRIS
The New York Times
November 3, 2008

In the belly of an industrial district south of Lyon, France, just past a sulfurous oil refinery and a synthetic vanilla plant, sits a run-down, eight-story factory that makes aspirin, the first pharmaceutical blockbuster. The Lyon factory is the last of its kind. No other major facility in Europe or the United States makes generic aspirin anymore. The market has been taken over by low-cost Chinese producers. Even Bayer, the German company that created aspirin in the 1890s and has fought for more than a century to distinguish its product as the most trustworthy one, now has backup supplies from China.

The Lyon plant is owned by a French chemical giant named Rhodia that has been making aspirin since 1908 and still accounts for more than 25 percent of the world’s aspirin market. But now a century after its entry into the business, the company intends to quit making aspirin altogether. The plant was last renovated in 1992, and it would need an upgrade to continue operating, an investment the company can no longer justify in what has become a cutthroat business. In fact, Rhodia is closing another factory about 40 miles to the south. This one makes the painkiller acetaminophen, which is found in Tylenol. It, too, is the last such facility in Western Europe.

  • A d v e r t i s e m e n t

In some ways, this is a nonevent. European factories close; Chinese ones open. Consumers like their commodities cheap, in the case of aspirin as with everything else. China now produces about two-thirds of all aspirin and is poised to become the world’s sole global supplier in the not-too-distant future. But are the Chinese factories safe? Who knows? The U.S. Food and Drug Administration, the European Medicines Agency and other competent government regulators rarely, if ever, inspect them. (By contrast, Rhodia’s plant was last inspected by the F.D.A. in July and is routinely inspected by one country or another.) Companies that import Chinese pharmaceutical ingredients, including aspirin, are required to test the supplies before using them, and some send private inspectors to China to ensure that suppliers use adequate controls. No pharmaceutical maker wants its name to become synonymous with disaster, and the vast majority of drugs that are consumed in the United States are safe. But some industry executives told me that price sensitivity in the generics industry makes it more difficult to fully vet their low-cost suppliers.

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