Baxter International plans to exit China’s intravenous fluids market, multiple local media outlets report, citing a letter to distributors.
A Baxter spokesperson confirmed the decision to Fierce Pharma Wednesday, citing a fragmented local IV solutions market and the impact from Hurricane Helene on U.S. supplies.
“The fragmented local IV solutions market in China has undergone a transformation over the last years, and, as a result, Baxter has explored every avenue to improve our performance,” the spokesperson said. “Given the changing market conditions and the presence of over 50 IV solutions suppliers in the country, the decision was made to plan to suspend the promotion and commercialization of IV solutions in China.”
The U.S. company’s IV manufacturing facility in Shanghai will stop supplying to the Chinese market, and related commercial operations had already stopped on Oct. 23, Yicai reports, citing the letter to distributors.
Baxter’s commercial operations in other areas will continue and its commitment to core focus areas in China remains intact, the spokesperson said.
The move comes as Baxter works to improve IV fluid supply in the U.S. after its flagship North Cove manufacturing site in North Carolina was hit by Hurricane Helene earlier this month. Baxter is the largest manufacturer of IV fluid in the U.S., so the production disruption triggered a shortage.
To help mitigate the supply shortfall, Baxter has worked with the FDA to allow temporary importation of products from its sites overseas, including 0.9% sodium chloride injection and 5% glucose injection from the Shanghai facility.
Baxter is actually increasing its production at the Shanghai plant and is redirecting all IV volumes from the facility to help minimize disruptions to patient care in the U.S., the Baxter spokesperson said.
Besides Shanghai, Baxter also has plants in Guangzhou, Suzhou and Tianjin in China making other products, according to Yicai. The Guangzhou site is supplying peritoneal dialysis solutions to the U.S. as temporarily authorized by the FDA.
“This unprecedented incident accelerated our decision to suspend the commercialization of Baxter’s IV solutions in China that becomes effective immediately,” the spokesperson said. “We are actively collaborating with our customers and distributors to support a smooth period of transition.”
Baxter has been making progress in restoring normal manufacturing at the North Cove site. In an update Monday, Baxter said it expects to restart the highest-throughput IV solutions manufacturing line this week. The company aims to restore supply to 90% to 100% of prior levels for certain products by the end of 2024.
In China, Baxter faces tough competition from large local IV manufacturers such as Sichuan Kelun Pharmaceutical—parent of Merck & Co.’s antibody-drug conjugate partner Kelun Biotech—and CSPC Pharmaceutical.
Multiple biopharma companies have recently offloaded their mature or low-margin businesses in China. UCB in August unveiled a $680 million deal to divest its mature neurology and allergy business in mainland China to CBC Group and Mubadala. Shortly before that, Kyowa Kirin reached a deal to transfer its entire Chinese mainland operations, including five established brands, to Hong Kong’s WinHealth Pharma for about $104 million.
The larger Baxter group has been undergoing a major strategic overhaul since the beginning of 2023. Under that initiative, Baxter last year said goodbye to its bipharma solutions business. Then, in August, the company agreed to sell its Vantive kidney care unit to the Carlyle Group.
Editor's Note: The story was updated Oct. 31 to include a statement by Baxter on Oct. 30.