Replies to post #71808 on Biotech Values

[DewDiligence]

Re: Chinese sourcing of API

When federal drug regulators discovered that Baxter’s product had been contaminated by Chinese suppliers, the F.D.A. banned Baxter’s product and turned almost exclusively to the one from APP. But APP also got its product from China. So for now, like it or not, China has the upper hand. As Mr. Polastro put it, “If China ever got very upset with President Obama, it could be a big problem.”

This is intentionally histrionic, IMO. A cut-off the Chinese API supply would be a big program, but only temporarily. The API business is not based on proprietary knowhow, but rather on rock-bottom labor costs; hence, many API could be transferred to non-Chinese sources during a geopolitical crisis, albeit with some interruption in production.

[DewDiligence]

Figures from the World Health Organization show [the proportion of counterfeits] can reach 35% of all [prescription] drugs in the Middle East, compared to less than 1% in the U.S. and Western Europe. One confiscated shipment by the Syrian ring to Egypt contained counterfeit copies of one brand of a leukemia drug [presumably Gleevec] with a street value of over $4 million -- equivalent to 50% of the annual sales of the brand.

…A great proportion of the fake drugs smuggled by the network to Egypt and Syria came from China…

That figures.

http://online.wsj.com/article/SB10001424052748704533204575047282075703998.html