U.S. pharmaceutical giant Pfizer (PFE, Financial) has been presently facing certain regulatory challenges in China due to which it has refrained from selling one of its top vaccines meant for children in the Nation. It is to be noted that China is one of the major markets for the American pharmaceutical honcho and such a sudden move can create a shortage of the much wanted Prevnar vaccine in China which is turn spells bad news for Chinese parents with kids under the age of 5. Let’s get into the details of the story which would aid in assessing the current stand being taken by Pfizer in the Nation.
The story so far
A few days back, Pfizer has stopped selling the Prevnar 7 pneumonia vaccine in China after the import license expired, and such a sudden step taken by the management has affected about 200 of Pfizer’s 9,000 employees in China.
In fact, Prevnar 7 protects against seven bacterial strains of pneumococcal disease, the bacteria being the top cause of child deaths worldwide. Also, this sudden sales halt would create a shortage in supply of Prevnar 7 in China which could affect Pfizer’s topline in the coming quarters. It is to be noted that the Prevnar vaccines are the second largest contributor to the company’s total revenue earned on a global basis. Last year, Prevnar vaccines alone generated $4.5 billion in revenue for the pharmaceutical giant.
This setback comes on the wake of several pharmaceutical companies facing similar issues in China struggling to gain their authorities approval for many of their drugs. A spokesperson from the company’s end approved the move of halting the sales of Prevnar 7 in China and commented – “Based on a careful assessment of this situation, we have decided to cease our vaccines commercial operations in China at this time, effective immediately…”
Since China is the third largest market for such vaccines, after the U.S. and Canada, stopping the sales of such revenue generating vaccine would obviously dampen Pfizer’s topline in the coming quarters, unless it’s able to replace it with a new vaccine sooner the better. The company shared on April 1 that it is in talks with the Chinese regulators to speed up the availability of Prevnar 13 to replace Prevnar 7, and to provide better protection against 13 pneumococcal strains.
So, the future of Pfizer in the emerging markets now depends on how soon Prevnar 13 gets launched and approved for sale by the Chinese regulators. Notably, Prevnar 13 is already out for sale in 120 countries across the globe and is the number 2 product for Pfizer on a worldwide basis.
Making way for introducing the new vaccine
Due to the changing government rules in China, international drugmakers are facing frequent delays on drug approvals in the nation. And the same seems to have happened to Prevnar 7, the sole Pfizer’s vaccine available in the Chinese market.
Now, with the new vaccine, Prevnar 13, in the pipeline for commercialization in China; the registration process is already under way as per a recent Bloomberg report. Pfizer has stated further on this pending issue, “We can’t speculate on timelines but are working very closely with the relevant regulatory agencies to expedite the availability of Prevenar 13 in China…”
Chinese consumers are a bit relieved by the indication given by Pfizer to provide this improved vaccine “as soon as possible.”
Last word
Several foreign drugmakers are currently facing challenges in China because of the stringent regulatory phases which are a cause of concern hampering their growth in the emerging markets. Due to the extensive timelines taken by the Chinese regulators for approving new medicines in the nation, some foreign drugmakers are also planning to shut down their operations in the country. However, the scene is still a bit different with Pfizer which is only ceasing its vaccine commercial operations in China, while the other operations which have around 8,800 employees would be working normally. And with the push of promoting Prevnar 13 in the nation, Pfizer might be able to make up for the revenue lost from China after the sales of Prevnar 7 came to a sudden halt.
