Though still heavily regulated, China’s vaccine industry has also been through market-based reforms in recent years. In June 2005, China’s “Guidance on Vaccine Distribution and Immunization” came into effect, which permits vaccine makers and distributors to directly sell vaccines not covered by NIP to the CDC, other vaccine distributors, and vaccine-consuming organizations. The new regulation breaks the CDCs monopoly and increased vaccine sales channels from 54 provincial CDC centers to over 5,700 sales terminals. While seen as good news to both domestic and MNC vaccine makers, it also increases competition.
The gradual market-oriented reforms also benefit MNCs that are mostly engaged in secondary vaccines. With better technology, wider sales networks, and brand image, they appeal to more affluent parents seeking comprehensive immunization for their children.
In 2008, sanofi-aventis finished first-stage construction of its flu vaccine production base in Shenzhen—a $94 million project that the firm said would produce 25 million flu shots annually for the domestic market.