Jiangsu Yanshen Receives Financial Penalty Notification From Changzhou FDA: Simcere

As per the decision, the Changzhou FDA is expected to impose a fine of RMB25.6m consisting of penalties and confiscated revenues from previous sales of substandard quality human use rabies vaccine. Jiangsu Yanshen is also expected to bear the cost of patient re-vaccinations up to RMB23m.

Members of Jiangsu Yanshen’s management team and employees directly involved in the production of substandard quality human use rabies vaccine are expected to be prohibited from engaging in the production and marketing of pharmaceutical products for a period of ten years.

In addition, a criminal investigation by local law enforcement authorities of Jiangsu Yanshen’s aforementioned management team and employees is currently underway.

Simcere Pharmaceutical Group (Simcere), a pharmaceutical company specialising in the manufacturing, development and marketing of branded generic and proprietary pharmaceuticals in China, has entered into an agreement to obtain a controlling stake in Jiangsu Yanshen on October 24, 2009. Subsequently Simcere discovered quality control problems relating to the production of Jiangsu Yanshen’s human use rabies vaccine.

Earlier, on November 23, 2009, Simcere urged the board of Jiangsu Yanshen to replace its general manager and head of quality assurance and demanded that Jiangsu Yanshen implement a total suspension of production effective on November 30, 2009 to facilitate internal inspection and rectification of its quality control systems.

Jiangsu Yanshen has been actively cooperating with relevant authorities on the investigation. To date there have been no reported adverse events related to the vaccine batches in question.