China sacks top official over Rabies vaccine scandal, firm may de-list

BEIJING: China has sacked a senior provincial official and is probing a former top drug regulator after a safety scandal at vaccine maker Changsheng Biotechnology Co Ltd, which again warned it could be delisted over the scandal.

The company was accused in July of falsifying data for a rabies vaccine and manufacturing an ineffective vaccine for babies, sparking widespread consumer anger.

While there were no known reports of people being harmed by the vaccines, regulators ordered Changsheng to halt their production and recall the rabies vaccine. Changsheng has apologized and said it is cooperating in the investigation.

A meeting of the ruling Communist Party's Politburo, overseen by President Xi Jinping, ordered the sacking of Jin Yuhui as vice governor of the northeastern province of Jilin, where the company is based, state media said late on Thursday.

Jin had been in charge of supervisory work over food and drug safety.

Wu Zhen, a former deputy head of the food and drug regulator, will be investigated by the party's anti-corruption watchdog, it said in a separate statement.

"The case is a serious offense, in which the vaccine producer violated the law and relevant standards and regulations in pursuit of profits and fabricated false production inspection records," state news agency Xinhua said, citing the meeting.

"A number of local government officials and supervisory departments were found in dereliction of duty. The case resulted in a negative impact and exposed many loopholes, such as inadequate supervision, and reflected institutional defects in the production, circulation, and use of vaccines."

In a statement to the stock exchange late on Thursday, Changsheng said that because it would face huge fines and confiscation of all illegal income it faced the risk of delisting.

Changsheng Biotechnology did not respond to an emailed request for comment.

More than 40 government officials, including seven at the provincial level, have been held accountable for the scandal, some of whom have been sacked, Xinhua said.

Guo Hongzhi, a senior official at the Jilin branch of the China Food and Drug Administration (CFDA), and Bai Xugui, a senior member of the Jilin branch of the Ministry of Industry and Information Technology, were removed from their posts, Xinhua. Bai oversaw drug supervision as deputy mayor of Jilin between 2016 and 2018.

Zeng Xiangdong and Yan Haijiang, both deputy directors at the Jilin branch of the CFDA, were also removed from their posts, according to Xinhua.

Four Changchun city CFDA officials were also removed, Xinhua said, among a number of others.

Changsheng is based in Changchun city in Jilin province. It is China's second-largest producer of rabies and chickenpox vaccines, the company said in its 2017 annual report.

Xinhua said on Wednesday the company had made nearly 500,000 sub-standard vaccines for children, roughly double an earlier estimate by authorities.

China is no stranger to food and drug scandals, despite repeated pledges by the government to get tough and impose harsh punishments.

Sanlu Dairy Group in 2008 was at the centre of a tainted milk powder scandal that affected almost 300,000 Chinese babies and killed six. It filed for bankruptcy soon after it was exposed and several top managers received long jail terms.

In 2007, China's former drug safety chief Zheng Xiaoyu was executed for taking some 6.5 million yuan ($944,000) in bribes to let medicine companies slip past his regulatory net.

($1 = 6.8854 Chinese yuan renminbi)

(Reporting by Philip Wen, Ben Blanchard, and Beijing Monitoring Desk; Editing by Darren Schuettler and Michael Perry)