Towards an additional risk of pharmaceutical shortages due to new elements surrounding China's anti-espionage law?

China's Anti-Espionage Law which came into effect on 1st July 2023 significantly broadens the definition of espionage, including the collection, processing or sharing of information that could be considered to endanger national security, and grants extensive powers to the Chinese authorities.

This vague definition has created an uncertain environment for foreign Life Sciences companies operating in China, as ordinary commercial activities can now be interpreted as a threat to national security.

One of the very concrete consequence of this law is that three German states recently suspended the travel of their inspectors responsible for monitoring pharmaceutical facilities in China, due to the risk of the inspectors being arrested,  prompting the Chinese Ministry of Foreign Affairs to respond on 19th August 2024 that “As long as the companies and personnel concerned act in accordance with the law, there is no cause for concern”.

The pharmaceutical industry relies heavily on strict quality control procedures in China to ensure that products meet international standards, particularly those imposed by the EU, including the EU GMPs. The suspension of these quality inspections therefore poses a major risk to the pharmaceutical supply chain, as China is a major supplier of active pharmaceutical ingredients to Europe. Without the necessary GMP certifications, European companies could face delays in the delivery of essential medicines, which could lead to new shortages, despite all the measures they are taking to combat them. This link between China's anti-espionage law and the risk of drug shortages could now be another argument for the pharmaceutical sector to use against the health authorities, who are increasingly calling for greater security stockpiling.