Pfizer gears up to make Covid drug Paxlovid in China

Pfizer could begin manufacturing Paxlovid in China through a local partner within three to four months following moves by Beijing to provide the clearances required to produce and supply the Covid-19 drug in the country.

Albert Bourla, Pfizer chief executive, said on Monday that a local contract manufacturer was gearing up to begin production as demand skyrockets for the oral antiviral treatment amid a supply crunch in China. Pfizer signed a deal with Zhejiang Huahai last year to produce Paxlovid to meet the needs of Chinese patients.

“We were calculating that this will take us all the way to the end of the year to be able to have local manufacturing, but with the progress that I see and the effort for the Chinese authorities to clear the production, that will happen way earlier ,” Bourla said at the JPMorgan healthcare conference in San Francisco.

“I wouldn’t be surprised if it comes in three, four months,” he added. Shares in Zhejiang Huahai rose 7.7 per cent in Shanghai on Tuesday.

Pfizer is increasing shipments of Paxlovid to China from its own manufacturing sites outside the country to tackle a severe supply crunch of the medication.

Bourla said Pfizer had supplied only a few thousand courses of Paxlovid to China during 2022. That rose to millions of courses during December and the first week of January, he added.

China’s National Healthcare Security Administration said on Sunday that it would not include Paxlovid in a list of medicines covered by basic medical insurance because of the high price quoted by Pfizer.

However, Paxlovid will be covered by medical insurance until March 31 under the terms of an emergency deal.

The sudden reversal of Beijing’s zero-Covid policy last month has caused a surge in infections across the country, and doctors have complained of Paxlovid shortages. Prices of the drug have soared in private markets.

Paxlovid, which is generally prescribed to treat mild to moderate Covid cases, is the only foreign Covid medication approved for use in China. Other local remedies have received approval, but experts said Paxlovid remained the medical community’s preferred drug given the clinical evidence of its efficacy.

Bourla said reports that Beijing was negotiating with Pfizer to allow local manufacturers to produce generic versions of the drug for distribution were not correct. He added negotiations with the state health insurer aimed at agreeing a further price reduction from April 1 had not reached a conclusion.

Bourla said Beijing wanted a further reduction in the price, which is already lower than that paid by many medium-income countries under Pfizer’s three-tier pricing programme.

“They are the second-highest economy in the world,” he said. “And I don’t think that they should pay less than El Salvador, right, which is a poor country.”

Bourla said talks were continuing, but if no agreement was made then Pfizer would continue to sell Paxlovid into the private market in China after April 1.

Bruce Liu, who leads the life sciences division for China at the consultancy Simon-Kucher & Partners, said it was unlikely that Beijing and Pfizer could strike a deal on pricing.

“The two sides are too far apart in the negotiations. From the Chinese government’s point of view, the budget impact will be enormous because of the huge population in need of the drug,” he said.

Liu said Pfizer would not want to “damage their global price integrity” by reducing the price for China. “Pfizer cannot sacrifice the global market for China,” he added.

Additional reporting by Hudson Lockett in Hong Kong

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