Germany Halts Inspections Amid Espionage Law Concerns
Germany’s pharmaceutical sector is on high alert as several states have suspended routine quality-control inspections at Chinese pharmaceutical facilities. The decision comes after China tightened its espionage laws, raising concerns about the safety of German inspectors. Four out of Germany’s 16 states have already canceled these crucial inspections, fearing that inspectors might inadvertently violate the new regulations. The German Pharmaceutical Industry Association (BPI) has warned that this suspension could lead to significant drug shortages, as critical active ingredient certifications are now at risk of expiring.
China’s Role in European Drug Supply Chain
China is a major supplier of active pharmaceutical ingredients (APIs) to Europe, including antibiotics. In Germany, nearly 90% of antibiotics are sourced from China. European regulations require that all drugs imported from China meet strict EU quality standards, which necessitates regular inspections by European auditors. The recent cancellations of these inspections due to espionage concerns could disrupt the supply chain, potentially leading to shortages of essential medications in Germany.
Industry Leaders Voice Concerns
German pharmaceutical leaders are backing the decision to cancel the inspections, citing fears of reprisals or even arrests under China’s new espionage laws. Dorothee Brakmann, CEO of Pharma Germany, expressed concerns over the safety of inspectors who gather data during their factory visits. The BPI has called on the German government to ensure that the new Chinese legislation will not impede the work of German pharmaceutical auditors. However, the German Ministry of Health has downplayed these concerns, stating that risks have always existed, even before the law was tightened.
China’s Reassurance and Legal Ambiguity
China’s government has attempted to alleviate fears by insisting that the espionage law targets only specific activities and does not threaten regular business operations. According to Chinese Foreign Ministry spokesperson Mao Ning, companies that comply with the law have nothing to fear. The anti-espionage law, which was first introduced in 2014, was expanded last year to cover “work secrets,” a term that remains ambiguous and has caused unease among foreign businesses operating in China.
International Business Community Seeks Clarity
The changes to China’s espionage law have left foreign businesses, particularly in the pharmaceutical sector, seeking greater clarity on what data can be safely collected without risking legal repercussions. The arrest of a senior employee from the Japanese pharmaceutical company Astellas Pharma in 2023 has only heightened these concerns. As German pharmaceutical companies navigate this complex landscape, the potential for drug shortages looms large, urging both governments to find a resolution that ensures the continued flow of essential medications.
SOURCE: Ref Image from CSIS
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