One of the world’s top COVID-19 vaccines is ‘stuck’ in customs—Is the delay deliberate?

August 8, 2020, 11:00 AM UTC

On May 16, Canadian Prime Minister Justin Trudeau announced that Canada approved its first vaccine for Phase I clinical trials in a landmark partnership between Canada and CanSino Biologics, a Chinese vaccine manufacturer.

“If these vaccine trials are successful, we can produce and distribute it right here at home,” Trudeau said at a press conference. “Research and development take time and must be done right, but this is encouraging news.”

Nearly three months later, Canada is still waiting for the vaccine to ship.

Health Canada, a government agency that oversees the country’s health policy, told Fortune that the shipment has “not yet been approved by Chinese customs for shipment to Canada.” Dalhousie University in Canada, which is partnering with CanSino Biologics to conduct the trials, told Fortune that its Canadian Center for Vaccinology is “prepared and ready” to begin the trials once the supplies arrive, but doesn’t have a timeline as to when that might be. CanSino did not respond to requests for comment.

The stalled shipment has set Canada back months—and maybe longer—in its effort to carry out testing of one of the world’s leading vaccine candidates and distribute it to its citizens. It also comes amid worsening relations between the two countries, bringing to fruition the looming fear that geopolitics will undermine science’s extraordinary campaign to bring a COVID-19 vaccine to a world population eagerly awaiting it.

The relationship between China and Canada has soured in recent months over the case of Meng Wanzhou, the chief financial officer at Chinese telecom equipment maker Huawei and daughter of company founder and CEO Ren Zhengfei. Canadian authorities detained Meng in Vancouver in December 2018, owing to a U.S. extradition order related to charges that Meng helped Huawei violate U.S. sanctions with Iran. (She and Huawei deny the accusations.)

Justin Trudeau, Canada’s Prime Minister, touted the country’s partnership with Chinese vaccine maker CanSino. But shipments of the vaccine never showed up.
David Kawai—Bloomberg/Getty Images

Days after Meng’s arrest in Canada, Chinese authorities arrested two Canadians living in China, businessman Michael Spavor and former diplomat Michael Kovrig, and accused them of engaging in espionage. China has denied that the arrests were related to Meng’s detention, but a Chinese foreign ministry spokesperson said in June that Kovrig and Spavor, who remain in custody, may be released if Meng were set free.

On May 27, just two weeks after CanSino and Canada announced their Phase I trials, Canadian courts made their first major ruling in Meng’s case, deciding in the U.S.’s favor and clearing a hurdle for her potential extradition to the U.S.

If any company could bridge the divide between Canada and China, Tianjinbased CanSino seemed uniquely positioned to do so.  

The company was founded by Yu Xuefeng, a scientist with decades of experience in Canada’s pharmaceutical industry, along with other Chinese executives well-versed in foreign pharmaceutical markets. After growing up in China, Yu lived in Canada for nearly 20 years. He got a Ph.D. at McGill University in Montreal before working for nine years at French pharmaceutical giant Sanofi Pasteur’s Toronto facility. He left Sanofi in 2009 to return to China and start CanSino, in what he says was an attempt to connect China’s booming vaccine development sector with consumers abroad.

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But Yu’s close ties to Canada didn’t assuage those unsure about Canada’s decision to pair with a Chinese firm. Some public health experts in Canada were especially disturbed by CanSino’s ties to China’s military. In developing its COVID-19 vaccine candidate, CanSino has partnered with the Beijing-based Academy of Military Medical Sciences, which is run by the People’s Liberation Army.

CanSino’s military connection drew skeptics, but it also got results.

In June, CanSino’s vaccine became the first to complete Phase II trials, putting it in the same company as especially promising candidates from Moderna and AstraZeneca. In late June, China approved use of the CanSino vaccine for members of its military.

The CanSino vaccine seemed set for more Phase I trials in Canada—the country requires that Chinese vaccines undergo Phase I, II, and III trials within Canada—until the Canadian press reported last month that the vaccine shipments had never arrived.

Chinese customs is a notoriously opaque agency, and it’s possible that the shipment has been delayed owing to some sort of routine inspection, David Mulroney, a former Canadian ambassador to China, told Canada’s National Post. But he and other prominent observers have raised the possibility that the holdup is politically motivated.

“It’s likely that the shipment is being delayed as part of China’s retaliation against Canada over the Meng [Wanzhou] arrest,” Mulroney said.

Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations, told Fortune he can’t imagine any reason for such a long delay in Chinese customs “other than political reasons.” China has mobilized significant resources to rapidly produce a vaccine, he says, so delaying the shipment makes little sense unless it’s due to political considerations.

For every day the vaccine shipment is delayed, the likelihood of a China-Canada partnership dims.

CanSino may have lost interest in collaborating with Canada on vaccines now that it seems to have locked in alternative venues for more advanced trials, Huang says.

In mid-May, CanSino executive director and cofounder Qiu Dongxu said in a speech that the company was involved in talks with Brazil, Russia, Saudi Arabia, and Chile to conduct Phase III trials, which is the last stage before commercial approval. In recent weeks, CanSino has fallen behind other COVID-19 vaccine developers since it hasn’t yet launched a Phase III trial. Six other vaccine candidates have reached that stage, including three other candidates from China.

Canada’s relative success in battling COVID-19 also puts it at a disadvantage compared with the other venues CanSino is considering, says Jennifer Bouey, an epidemiologist and Tang Chair in China Policy Studies at the Rand Corporation, a U.S.-based research organization. Phase III trials typically involve thousands of healthy volunteers, and they work better in areas with higher levels of community spread of the virus. At least some trial volunteers need to encounter the virus to ensure the vaccine works.

Canada, for its part, now appears to be looking elsewhere for its vaccine supply.

On Wednesday, the Canadian government signed two separate deals with American vaccine manufacturers Pfizer and Moderna to secure millions of doses of their vaccine candidates once the candidates gain regulatory approval. It marked Canada’s first endorsement of international vaccine candidates besides CanSino’s, though the government has also provided support for several domestic projects in preliminary testing phases.

The deals make it appear as though CanSino is “out” in the eyes of Canada’s government, said Aidan Hollis, an economist of pharmaceutical markets at the University of Calgary.

The potential failure of CanSino’s collaboration with Canada reinforces experts’ worry that politics may determine the final stages of vaccine development and distribution.

In China, Huang says, there “are already real signs that [Beijing] is using vaccines as a diplomatic instrument.” Philippines President Rodrigo Duterte, for example, pleaded with China in late July for preferential access to a potential vaccine and, shortly thereafter, announced support for China’s territorial claims in the South China Sea. In response, China vowed to comply with Duterte’s vaccine request and hailed his comments on the South China Sea.

The increasingly frosty relations between China and countries like Canada, the U.S., and Australia may mean that when vaccines are distributed “we may see a divided world,” Huang said.

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