EU Should Block Pharma Acquisition Because of China Sanctions Ties, US Group Says
The EU and the Czech Republic should reject India-based Aurobindo Pharma’s proposed $5.5 billion acquisition of Prague-based Zentiva, the Coalition for a Prosperous America said Aug. 20, arguing that the deal would threaten European pharmaceutical security because of Aurobindo’s connection to China.
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Aurobindo has “substantial, alarming ties” to Chinese companies sanctioned by the U.S. or associated with the Chinese military, said CPA, which represents American manufacturers. “Aurobindo uses at least four Chinese suppliers sourcing from organizations under U.S. sanctions for links to China’s military industry -- including Zhejiang Huahai, the company behind the valsartan contamination scandal that caused a major U.S. drug shortage.”
CPA said in a report last year that Zhejiang Huahai partners on pharmaceutical research and development with Xinjiang Baihuacun Pharma Tech Co. Ltd., an entity partially owned by Xinjiang Production and Construction Corps, which is sanctioned by the U.S. Office of Foreign Assets Control and listed on the Commerce Department’s Entity List.
The group noted that Aurobindo is already the largest supplier of generic prescriptions to the U.S., and the company relies heavily on “cheap” Chinese active pharmaceutical ingredients, “leaving both the U.S. and global medicine supply chains dangerously exposed to Beijing. An Aurobindo takeover of Zentiva would significantly increase that exposure.”
Aurobindo Pharma didn't immediately respond to a request for comment.