The EU opened a formal investigation into Amazon on Wednesday centered on how the e-commerce giant uses merchants' data.Technologyread more
Analysts and investors are keen to find out how looming interest rate cuts will impact the second biggest U.S. lender by assets.Financeread more
IAC is set to invest $250 million in Turo, a peer-to-peer car-sharing firm that is often referred to as the "Airbnb for cars."Technologyread more
U.S. officials see the deal as a threat to NATO, for which Turkey provides the second-largest military.World Politicsread more
Google's services have been blocked in China for several years, but the company still has a business there, as the tech giant seeks to sell products to Chinese firms in...Technologyread more
China may have signaled it's going more hard-line on trade, but it could be a good thing, former U.S. negotiator Clete Willems told CNBC.World Economyread more
While the vote served as a show of solidarity for Democrats, it recommended no substantive penalty against Trump.Politicsread more
Barney Frank, former chairman of the House Financial Services Committee, says that significant progress has been made to reduce the amount of imprudent household lending in...Invest in You: Ready. Set. Grow.read more
Facebook's cryptocurrency project has already been met with skepticism from policymakers around the world.Technologyread more
United's Optum is launching a new partnership with John Muir Health aimed at helping the small northern California hospital operator become more competitive with its larger...Health and Scienceread more
A key read on the industry, the Architecture Billings Index, fell into negative territory in June, according to the American Institute for Architects. Inquiries for new...Real Estateread more
The drug safety scandals in recent weeks have underlined the risks to international consumers posed by weak oversight in China, the world's largest supplier of active pharmaceutical ingredients.
Chinese manufacturers account for 40 percent of the global production of such ingredients, according to the UK's medicines regulator. It was an API was behind the first of the scandals in July.
The European Medicines Agency and the US Food and Drug Administration issued alerts over a cancer-causing ingredient used in a blood pressure medication, supplied by Chinese company Zhejiang Huahai, resulting in a recall of affected drugs.
Then Beijing announced that hundreds of thousands of substandard vaccine doses had been sold in China, prompting a public outcry. Senior executives were arrested at the pharma company, Changsheng Biotech, which was also accused by authorities of forging data during the production of rabies vaccines.
China is home to thousands of API producers, with exports worth $29bn last year, according to Beijing, and its producers supply ingredients for generic drugmakers such as Teva Pharmaceutical and multinationals including Johnson & Johnson and Novartis. About 80 percent of APIs used in the US come from China and India, according to industry estimates.
"Many [Chinese] API companies do not strictly follow established [manufacturing] processes, and do not strictly record data," said John Lin, a partner at EY in China. "Regulatory authorities do not conduct enough spot checks on API producers due to insufficient staff," he added.
Domestic regulators are not required to inspect companies that produce solely for export.
Companies importing Chinese APIs are expected to carry out their own tests and report irregularities to regulators such as the FDA and the EMA, who can inspect Chinese producers in China and impose import bans.
The number of FDA warnings to Chinese pharmaceutical manufacturers, a prelude to being placed on an import blacklist, has jumped from five in 2014 to 22 last year. Indian companies have also received regular warnings but Chinese companies have received more than their Indian counterparts for the past two years.
The letters are feared by Chinese manufacturers, whose executives call Peter Baker, a director of the FDA's Beijing office, "the killer", people in the industry said. The FDA has issued 11 warning letters to Chinese manufacturers this year so far, while the EMA has issued six complaints.
But analysts say the oversight of overseas agencies still falls short because of a lack of staff in China. The FDA had just 17 employees in the country overseeing the 700 facilities that supply the US, according to a 2016 report from Raps, an industry body that focuses on regulation in healthcare.
"Concerns over how FDA can adequately track the drug and API supply chain is starting to worry Congress," Raps wrote at the time.
The FDA has confirmed that it now employs 22 staff members in China, including six local hires, suggesting the number of inspectors has barely changed.
FDA inspections in the US are unannounced, whereas in China they are generally known about in advance.
"The FDA has made significant progress in its oversight of drugs manufactured in China," the FDA said. "As in other areas around the world, some Chinese companies meet US product quality standards but some sites do not meet our requirements."
EU national authorities conduct 20-40 inspections of Chinese API manufacturers every year, according to the EMA, with about 10 percent of inspections finding non-compliance.
Warnings to Chinese companies published by the FDA and EMA in recent years show that dozens have violated standards, mainly relating to record-keeping during the manufacturing process. In several cases the exporters shipped large volumes of product before the infractions were discovered.
In a warning sent last year to China's Changzhou Jintan Qianyao Pharmaceutical Raw Materials, for example, the FDA said the company did not have any quality-related procedures in place before 2016, even while it was shipping drugs to the US. Company staff told an FDA inspector that they lacked written records because "warehouse employees accounted for incoming raw material handling, sampling, and testing 'in their heads'".
Rosemary Gibson, an adviser at The Hastings Center, a healthcare think-tank, said cost-cutting by the drug industry was the true culprit for lowered standards. "Globalisation is de facto deregulation," she added.
China is trying to improve matters. Inspections are becoming more regular and professional as China aims to build a world-class biotech sector and export more finished drugs.
In 2015, the China Food and Drug Administration introduced a regulatory framework comparable with developed countries, an achievement recognised last year when China became the eighth member of ICH, the global drug standards body.
The regulations require random inspections of pharmaceutical manufacturers, which resulted in the revocation of manufacturing certification from 32 companies last year.
Recent scandals "can be a major setback for China's pharma industry", said Chen Xi, a professor at the Yale School of Public Health. "On the other hand, this scandal can be a good chance if the Chinese government takes this crisis as an opportunity to reform."
But critics say local officials still protect small producers, while the low salaries of inspectors make them vulnerable to bribes.
"It's all there on paper — now it's the time for enforcement," said David Deere, chief commercial officer at PaizaBio, a US company that helps multinational pharmaceutical companies expand in China. "You've got to get the bad players out of the business. That is going to blow through the local interests. Its going to take them years."
More from the Financial Times: