Pricing System of Class-2 Vaccines is Root Cause Behind China's USD88 Million Vaccine Scandal
Yicai Global
/SOURCE : Yicai
Pricing System of Class-2 Vaccines is Root Cause Behind China's USD88 Million Vaccine Scandal

(CBN Global) March 24 -- A recent scandal involving the illegal sale and distribution of CNY570 million (USD87.5 million) worth of vaccines that were distributed to 18 provinceswithout observing strict cold-chain storage requirementshas been found to be due in part to the free-price system of class-two vaccines, CBN has found.

China's vaccines are classified into class-one vaccines and class-two vaccines. Class-one vaccines are included in the country's immunization plan and are distributed free of charge by the government, while class-two vaccines are not free and qualified vaccine producers may directly supply such vaccines to disease control agencies or units that administer vaccines.

Once a class-two vaccine leaves the manufacturer it is typically distributed down a chain of disease control centers from the provincial to the municipal to the district to the unit where the vaccines are administered.

Prices are marked up substantially as the vaccines pass from one level to another. A supplier in Guangyuan, Sichuan province was found last year to have provided kickbacks, ranging from CNY1 to 10, to officials within the disease control system, payable once his sales revenue was received. The supplier was found to have provided over CNY20 million worth of vaccines over eight years, accounting for one third of the city's total vaccine procurement over that period of time.

"Before the SARS epidemic [in 2003], many disease control centers at the local grassroots level had no government backing and needed to be self-supporting. Many employees had to bring in business themselves, and some even sold briquette stoves," a person inside the health system told CBN reporters.

China does not have strict laws against the illegal handling of vaccines. Maximum penalties for unlawful activities in the vaccine business are five-year prison terms. Vaccine manufacturers who knowingly supply vaccines to unqualified distributors should be found guilty of complicity and charged with criminal responsibility.

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