China's pollution crackdown creating pharma supply issues, Stada executive says

Stada
An executive with German generics maker Stada says that China's effort to crackdown on air pollution has created some supply issues as Chinese plants close for months at a time to deal with violations. (Stada)

China has closed tens of thousands of manufacturing plants across the country in an effort to reduce serious air pollution, and generics maker Stada says China’s crackdown has created supply problems.

Ronald Seeliger, eastern European regional chief for German generics maker Stada, told Bloomberg that China’s actions have interrupted deliveries, making it more important for the drugmaker to take some production in-house, although it still must rely on Chinese API makers.

“That’s having a big, big impact on us,” Seeliger told the news service last week. “Stada is seeking to insource many more products, to produce them in-house for better availability, better costs, reliable quality and for better logistics.”

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One project that will help that effort, Seeliger said, is the a new packaging plant that Stada’s Hemofarm unit in Serbia will officially open this year. The €22 million ($27 million) plant in Vršac, Serbia, will allow the drugmaker to separate production from packaging. Stada has said the 600 square meter facility can fill 75 million ampoules annually.  

RELATED: Bain, Cinven raise Stada buyout offer again under activist pressure

The supply issues come even as the drugmaker is looking to expand in Eastern Europe following its $6.7 billion takeover by private equity partners Bain Capital and Cinven, who have replaced the board and named drug industry veteran Claudio Albrecht as its new CEO.

According to news reports, Chinese officials last fall closed up to 40% of the country’s manufacturing sites at some point for inspections of environmental standards. NPR earlier reported more than 80,000 factories were issued fines or criminal offenses as a result of their emissions, as safety officials did rolling inspections through dozens of Chinese provinces, causing supply interruptions for companies worldwide.